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Germany – Staffing industry expects deterioration

02 November 2012

The German chambers of commerce and industry (DIHK) has warned that staffing firms are facing major challenges with many recruiters expecting a deterioration of their business activities.

“Temporary staffing firms are pessimistic about the future,” said Achim Dercks, managing director at the DIHK. This follows a new survey carried out by the institute which asked staffing companies about their expectation on how the industry might develop in the future.

“Over 40% [of staffing companies] are expecting business activities to decline – in the early summer, this figure stood at only 13%,” said Mr Dercks. According to him, this is not only due to the weaker economic climate and European debt crisis, but moreover because of new surcharges in the staffing market.

Six in 10 staffing firms are worried about rising labour costs and the economy, as Randstad and ManpowerGroup confirmed in separate announcements this week. The new pay rates for agency workers in the chemical, metal and electrical industry came into force on Thursday, raising salaries between 15% and 50%.

Political pressure has led to these equal pay agreements and although they give the staffing industry a better brand reputation, experts believe that flexible labour could suffer and jobs could be moved abroad. 58% of staffing firms believe this to be a risk to their business.

But the survey found that staffing companies deem the country’s acute skills shortage still to be the biggest risk. At the same time, it also warned that unskilled and low-skilled workers will be harshly affected by worsening market conditions.

The DIHK said that temporary employment remains a “significant” part of Germany’s labour market and should not be demonised as “precarious”. The business organisation does not support further regulations which “restrict” the industry further, as demanded by some major unions. 

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