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Germany – Temp shortage and its impact on the industry

27 March 2012

Germany has been hailed as Europe’s powerhouse when it comes to job growth – and a recent survey by Randstad and the Munich Centre of Economic Research seems to confirm this. Every third company plans to increase their headcount in the first half of 2012 and, even in the second half of the year, a quarter of companies intend to boost their staffing levels.

But what does this signify for the German labour market and what will the future look like for the staffing industry? In an interview with Staffing Industry Analyst, Dr Alexander Spermann, Director of Talent management Flexworker & Public Affairs at Randstad Germany talks about the index, hiring trends and the shortage of temps on the labour market.

“According to the Randstad ifo-Flexindex which questioned over 1,000 HR-managers, companies need more personnel flexibility:  Compared to last year, the Flexindicator that measures current and expected relevance of personnel flexibility has gone up slightly – driven by a sharp rise in expectations,” he said.

Mr Spermann also emphasised that this was a “very important development on the German labour market” as “more and more companies want to hire both permanent and temporary staff.”

This can only keep the economy in good stead and he confirmed that “a very good performance of the labour market can be expected if you take into consideration the latest figures of the Institute for Employment Research (IAB), which predict an upward trend in employment and a downward trend in unemployment. The current unemployment rate in Germany is extremely low so this definitely signals a positive development.”

While things may be looking good for the labour market in general, what can be expected for the temporary staffing industry?

Mr Spermann said that “Temporary agency work is usually dependent on the economic cycle and tends to fluctuate even more. In the early phase of the business cycle, temporary agency employment plays an important role for job creation because uncertainty pushes demand for temporary agency work. The share of overall job creation typically decreases afterwards. On the other hand, structural skills shortages will increase the demand for temporary agency work.”

The skills shortage in Germany may benefit temporary agency workers but Mr Spermann was “cautiously optimistic” about the future, saying it was difficult to make exact predictions about how the labour market will develop for temps.

“The staffing industry is still very small and other flexibility instruments do play a more important role,” he said. “Randstad observes a mismatch on the labour market. Thousands of vacancies for temporary agency employees coincide with a lack of adequately qualified agency workers in Germany. These days it takes longer to find the right candidate because it is more difficult to find temporary agency workers who have got the skills that are needed on the labour market – not only with respect to high-qualified jobs but also to low-qualified ones.”

He highlighted that Randstad had tackled the shortage of temps in Germany by looking at alternative solutions to this widespread problem. The firm, he said, had “introduced various training initiatives such as e-learning, workshops, and also short-term qualifications. Last year alone we have successfully organised over 10,000 of these initiatives.”

Randstad is the largest recruitment firm in Germany according to Staffing Industry Analysts’ research.  The company operates in around 40 countries and has a headcount of 63,000. 

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