CWS 3.0: April 19, 2011 - Vol. 3.10

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Behind the News: How Many Temps are Too Many

At the beginning of April, the Business Minister of the Federal State of Thuringia (Thüringen) in Germany, Mathias Machnig (Social Democrat), announced his intention to reduce investments subsidies or cut them altogether for companies that hire "too many agency temporary employees".

Under Machnig's proposals, employers with agency temporary employment ratios of between 10 percent and 30 percent of their workforce would only receive basic levels of investment subsidies, while employers with more than 30 percent of agency temporary employees as a percentage of all employees would receive nothing.

Machnig's decision followed a recent poll by research firm Infratest. According to the poll of Thuringia citizens, 39 percent said that their main concern is that the federal government should put a limit to the expansion of agency temporary employment.

Until 1997, it was illegal to provide temporary staff via intermediaries in Germany. Thuringia is an agricultural region in the centre of Germany that formerly was part of East Germany, so opinions about western employment practices are likely to be less sympathetic there than in the rest of the country.

Machnig's critics accuse him of being politically motivated. Among those not happy with this move is Gerald Grusser, manager of the Erfurt Chamber for Industry and Commerce (Erfurt is the state capital of Thuringia). "The new guidelines were a shot from the hip and they were not thought through. None of this was agreed with the Chambers of Commerce and professional associations. Industry can now pick up the pieces," Grusser says.

With politicians taking it upon themselves to place limits on temporary workers, it does raise the question of what constitutes a healthy workforce mix. The answer will vary by industry and by company, but it's fair to say that there is little objective insight into this question within the staffing industry itself, among academics, or even among the most sophisticated employers.

Each company has its own ideal ratio of temporary workers that will provide the business the right level of flexibility without compromising the core skills and knowledge the business needs to secure the delivery of quality services or products and long-term business growth. Machnig has decided that the range of too much starts at 10 percent and becomes completely untenable and unjustifiable at more than 30 percent. Given that the staffing penetration rate (temporary agency workers as a proportion of the total workforce) in Germany is less than 2 percent, it seems that his threshold will not actually affect too many companies.

Nevertheless, and perhaps not surprising, the proposal has been sharply criticized by the largest staffing association in Germany, The Association of Temporary Employment Agencies (BZA), which says the plans are "discriminating and legally not tenable."

"These plans contravene the European Union [Agency Workers] Directive, which regards temporary employment as a desirable form of flexible employment and demands that national governments remove any unjustified restrictions for the temporary employment sector," said BZA President Volker Enkerts. "Temporary employees are legally employed and pay their taxes and social contributions. They are paid on the basis of collective bargaining agreements. It is bizarre that the minister wants to fight what is effectively an engine for growth."

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