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The CEO of the world’s second-largest recruitment firm Randstad has expressed his concerns about how economic developments will impact the German staffing industry as the country has shown recent signs of a slowdown.
Unemployment has been on the rise for months and although the economy is still growing, experts have warned of lower growth rates next year. The German government recently slashed its 2013 growth forecast to 1% from 1.6%, and is now expecting growth of 0.8% for this year.
Head of Randstad, Ben Noteboom, said in an interview with Wirtschaftswoche that he is more worried about the economy than the increased pay rates for agency workers that are coming into force today.
According to these equal pay agreements in the metal/electrical and chemical industry, agency workers are entitled to a +15% surcharge after working in one company for six weeks. This will continuously rise and eventually reach 50% after a nine-month period of employment.
ManpowerGroup Germany said this week that revenue could fall by -20% because of the higher costs faced by recruiters. But Mr Noteboom did not want to give away details by how much Randstad’s German staffing business could suffer from the collective settlement.
Instead he spoke positively of the agreements and said it would help improve the image of temporary staffing in Germany, where the industry is regularly facing criticism from unions and politicians.