Development

In Germany, as a rule, a temp worker is usually engaged for an indeterminate period of time by an employing temp agency which then assigns the worker to a third party employer. As a result, the temp worker has a right to a steady salary even when he/she has not been loaned out to the third party. For temp workers, all statutory provisions such as continued salary payments in case of illness, maternity, job and lay-off protection apply. Temp workers are socially insured and enjoy the same legal protection as do employees in permanent job positions. This differentiates considerably between the German market and international general conditions.
Moreover, an actual tariff requirement exists for temp agencies in Germany. For companies that have not concluded a collective wage agreement and have also not joined an employer association with a valid wage agreement for temporary employment, there is an obligation to ensure equal pay and equal treatment towards project workers. Organizationally, this leads not only to considerable additional expenditure, but also to the drastic price increase of temp workers by up to 25 per cent.

Since the employment of workers in Germany from other European countries has led to cheaper rates in the service segment, the larger temp agencies therefore seek a minimum wage in the industry. In order to avoid damaging their image, the large industry associations (BZA, IGZ and the German Trade Union Federation) which Runtime applies to have submitted a commensurate petition to the Federal Ministry of Labor.

Over the past years the temporary employment market has been steadily deregulated. The frequent extension of assignment periods up to the annulment of limitations has led to growth in the industry. Since then, Runtime has had the opportunity to deploy its qualified workers to its clients for a longer period so that they can complete their projects. Based on the growing acceptance of temp employment with works committees and unions, and thanks to the increasing appreciation of the industry by society, the entire industry looks forward to a strong growth in sales.

Business activity

As a cyclical industry, temp employment is closely tied to the business activity of the economy. At economic growth rates of less than 1.5 per cent, staffing tends to decline. At rates lying well above 3 per cent, the employment market is so tight that a large number of positions cannot be filled. Ideal conditions for industrial growth lie between 1.5 and 2.5 per cent. In the course of positive business activity development,  market trade rose to 15 per cent. A further reason could be the increased demand by the German economy for flexibility. Companies have had to learn after some difficult years to configurate their structures in a more flexible fashion in order to survive in domestic and global competition. At the present rate of economical growth, Runtime has sometimes had supply shortages in meeting customer demands, the more so as companies have hired on more workers on a permanent basis. Thus, it is getting tougher in all business areas to recruit trained workers. The shortage of workers in the IT branch and among engineers is based on the marginal number of college graduates.

German Labor Market

An organic consolidation of the market is still prevailing - particularly through the increasing trend of clients to reduce the number of their providers. The five largest competitors raised their holdings in comparison to the previous year. All the same the German temp employment market remains fragmented. A multitude of loaning agencies divides up the remaining market shares. Runtime has established itself among the leading service providers in Germany and will do everything in its power to maintain this rank.
Last but not least, due to the significantly shorter customer suppliers lists, the German market will have to consolidate further in the coming years.