CONTRACTING & LABOUR LEASING IN GERMANY

Labour Leasing has become a management trend in the labour market in the U.S. and many European countries giving firms the advantage of economies of scale in lowering the cost of employee acquisition.

The first so called "Temporary Workers Agency" was established in the United States of America. In Germany the management of temporary workers for remuneration was started in 1922.

When looking at the traditional labour regulations in Germany, the German Labor Leasing License (AÜG) can add significant value to companies operating here. The AÜG allows its holding companies to react according to the changing requirements of their businesses.

The AÜG allows a company to meet the short-term demand in human resources, e.g. to cover production bottle-necks. This demand occurs due to various reasons, e.g. a lack of specialized professionals. As soon as this demand is met, the added human resources can be easily downsized again without following any regulations pertaining to dismissal.

Another major benefit of the AÜG is that it drives low cost of employing additional human resources, since the company is not bound to the obligation to enter into a long-term employment relationship with the temporary staff.

Allowing temporary work provides companies with greater flexibility with regard to personnel reserves for spontaneous and project-related applications. The AÜG adds value in times of high-demand markets at very short notice. The majority of temporary workers are highly professional, bringing valuable core competencies or specialized knowledge to a company.

With the AÜG license, companies can leverage the new skill set of the interim staff, without all the obligations that are usually related to the traditional way of employing staff.