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How the tight lockdown in Germany effects temporary employment

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Like many other countries, Germany has been partly shutting down the economy as a means to contain Covid-19. As a result, many companies have been reducing their employees’ working hours or hired temporary workers to remain flexible in uncertain times.

Although new labour market data from the German Federal Employment Agency showed a continuing recovery in temporary employment in October 2020, recent indicators for December 2020, points to the first negative effects of the hard lockdown that has been in place since mid-December. In contrast, the results of the economic surveys conducted by the IFO Institute – Leibniz Institute for Economic Research at the University of Munich for December still signal a positive mood in the staffing services industry.

Risk of temporary workers becoming unemployed significantly below pre-crisis level

40,363 new job vacancies for the temporary employment sector were reported to the Federal Employment Agency in December. However, this positive trend was interrupted, as 21,071 persons who were previously employed as temporary workers became unemployed.

The tightening of the lockdown implemented in December seems to be having an impact here. In November 2020, demand had still increased, despite the partial lockdown introduced in the same month.

Short-time work allowances as successful means to keep temporary workers

Thanks to short-time work and support measures, many companies try their best to keep their employees. Additionally, company owners now know where they stand with a lockdown and with hope that Germany can get the pandemic under control with the mass roll out of vaccinations, the labour market still remains robust.

Slight improvement in business situation for staffing service providers

The economic surveys conducted by the IFO Institute in December show a further improvement in the current business situation among staffing service providers.

This means that at the time of the survey, the companies surveyed mainly expected employment to increase further in the coming months. However, it should be noted here that the IFO business surveys begin at the beginning of each month and therefore a large proportion of the companies probably already participate at this time. It can therefore be assumed that the Covid infection figures, which rose sharply again in the course of December, and the associated decisions on the so-called hard lockdown are not completely visible in this sentiment picture.

 

Where TCP could help

TCP is a European Professional Employer Organisation and compliance specialist with over 25 years’ experience. Our expertise lies in the employment of skilled temporary/contract workers on behalf of clients. TCP operate in 8 countries across Europe, with partners worldwide. Take a look at the countries we operate in here. We have registered entities in all the countries were operate and can support work visa applications as well as act as the employer of record and manage the payroll according to local legislation, allowing TCP to manage the risks involved and indemnify our clients.

Would you like to know more? Call our UK office on 0044 (0)208 580 0800 or call our German office on 0049 (0)30 700 101 500. You can also fill in our contact us form here and a member of our sales team will get back to you as soon as possible

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