Spiegel Wirtschaft1 hour agoBusiness1 min readGermanyView original

Economic pressure and flexibility in German companies

Companies are increasingly relying on temporary employment contracts and working time accounts in the face of economic uncertainty.

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Quick Look

In view of economic uncertainty and weak growth, German companies are increasingly using fixed-term employment contracts and flexibility instruments such as working time accounts.
Economic pressure shapes the relationship between management and employees.

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Why It Matters

Fixed-term contracts without objective reasons are legally limited to two years, although an extension to four years is being discussed.

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Limitations without objective reasons are restricted by the legislature; in principle they are only possible for two years; the government is planning an extension to four years. If companies now make greater use of the existing scope, this can be interpreted as a signal of growing uncertainty. In view of long periods of weak growth, a shaky economy and frequent geopolitical shocks such as the Iran war and its consequences, companies are ensuring maximum flexibility. The downside: The uncertainty is passed on to many employees who worry about their professional future and may develop fears of downward mobility.

Other options for flexibility

Companies also use other means. In the coming months, 33 percent of those surveyed want to make greater use of working time accounts, 21 percent of overtime and 15 percent of outsourcing.

Economic pressure dominates the relationship between employees and managers in everyday work, as the survey shows. 44 percent of companies name it as a defining theme of the past twelve months - well above all other factors such as new working models, innovations, leadership changes or restructuring.

The pressure is particularly reflected in harsher cuts in industry: here, 17 percent of companies report that restructuring and job cuts determine how they work together - more than twice as many as in retail. Service providers, on the other hand, mention the introduction of new working models more than average, which are often seen as a reaction to cost pressure and the use of AI.