Temporary Employment as a huge part of the German labour market

Working for a company as a temporary worker is meanwhile a big part of the German labour market. This means that there is a company, a so called “Leiharbeitsfima” which has a pool of unemployed people from every branch to send them to firms which needs partially workers. For example: The “Leiharbeitsfirma” has 20 plumbers in their pool. Then a company which has a contract to build up a new house needs 18 plumbers until the project is finished. So the “Leiharbeitsfirma” contracts 18 of their 20 plumbers to the firm which needs them, but to a way lower wage that is normal in the branch. Moreover the 18 plumbers will be unemployed when the project is finished. The sense of such employment is a time employment so that on the one hand people have work and on the other hand do not rely on the social system when capacity is needed. During the last upwards trend of the economy the work on a time limit had a strong influence to the increased employment rate in Germany. Now in the financial crisis with lowered demand and therefore lowered production the “Leiharbeitsfirmen” are also in a crisis. The employees cannot be contracted to other firms because of the fact, that they do not need employees either. Additionally, companies release their working-on-time employees because of the fact, that they are much easier to fire than long time worker. While long time employees enjoy a protection against being fired, working on time employees can be released whenever the company has no need for them. For sure, on the one hand working-on-time has its advantages: Unemployed workers are able to work for a short period, maybe earn more money than they would get using from the social system and moreover increase their self-esteem. According to a study people who have worked for almost its whole life then get unemployed and have to be at home for some years, mostly start feeling useless especially when they have to provide a family. But there is also a negative side one has to recognize as well. Employers are able to fire the working-on-at-time-limit employees whenever they want to. So the employees always suffer a pressure to do everything more than perfect, behave always in a good matter and do whatever one wants from them to not get unemployed. Furthermore these employees get way lower wages than “normal” employed workers. For example: An employee in the metal industry earns normally about 20 Euros an hour while a temporary worker earns 8 Euros per hour. So one can ask itself how a man with a wife and two children, working 40 hours a week with an average salary of 1300 Euro can provide their family properly. Therefore some of the unemployed people rather stay at home, because they get slightly more money from the social system under this circumstances, than if they would accept their working contract. Additionally it is not that good for the company itself. In general temporary employees are contracted for a maximum of 2 years. Taking the example of the metal industry, the short-time employee comes to his new company. They learn them how everything works, what he should recognize and what he should do. He gets better and better in his job, makes a good performance and is a real gain for the company. Then the 2 years are over and he is fired. So the company loses a good worker, who knows everything and can bring in his experience. But because of the fact, that after 2 years the company has to employ the temporary worker as a long-term employee they rather get rid of him than employing him because they want to stay flexible in their amount of employees. But this flexibility is accompanied by a high failure quote when the next new working-on-time-limit employee from a “Leiharbeitsfirma”, who got the place of the already well trained one, comes.

In conclusion the temporary work is a strong part of the labour market. Because of the flexibility which is given to the employers the German labour market felt a strong increase in their employment rate. This even stopped the downward trend in the years 2003 till 2005. Since some month, however, there is a backwards trend observable because of the allover financial crisis. Additionally temporary works has its good and bad sides, which everyone should consider.

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2 thoughts on “Temporary Employment as a huge part of the German labour market

  1. I think especially during the financial crisis of the last months this alternative of temporary employment was very important for both, the enterprises on the one hand to stay flexible and able to reduce personal costs immideatly if it get’s necessary and on the other hand also for the employees because otherwise many of them would have been unemployed especially during the crisis. Of course this alternative of employment has also a lot of disadvantages for the employees, as mentioned in the text. But I think that some of the temporary workers will not have to leave the enterprise when their contract expires. Many enterprises use this alternative only for the worst-case and to have a hedge for the crisis. But now, as the situation is already getting better in all european countries, many of the temporary workers will be invited to stay at the company as an long-term-employee.

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  2. I would like to add that in crisis situation this is very common that eployers are more likely to hire temporary employees, because very often there is such thing as check-up period while employer doesn’t have to pay as many as for long-term employee or have a right to not pay at all, and that is the way how to reduce costs. This is very common sitation in my country where, after the check-up period has expired, you are free to go.

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