Small and medium-sized staffing firms in Germany have noted a decline in freelance contract labour (Werkvertrag), according to new research by the German Association of Temporary Employment Agencies (iGZ).

Unions have argued that higher pay rates for agency workers have led to an increase in independent contracting although the iGZ now provides conflicting evidence. A survey of local staffing firms found that the use of contract labour has fallen to 11.5% in the second half of 2012 from 17.7% in the first half of the year.

The research also shows that the number of temporary agency employees with an assignment length of over seven weeks in sectors that have recently introduced pay rises has risen in the last quarter of 2012 compared to the previous quarter. Increases were noted both among skilled and unskilled workers.

Staffing firms also look positively into the future. 60% of companies hiring between 50 and 100 employees expect positive business performances in the coming six months, compared to a third of those employing over 250 staff.