German companies are planning a significant expansion of their use of fixed-term contracts. This finding, reported by Spiegel based on a survey conducted by the HR firm Randstad and the economic research institute ifo, involved 469 HR managers representing businesses ranging from small craft shops to large corporations.
The survey, which references the third quarter of 2026, revealed that 26 percent of surveyed firms plan to increase their reliance on fixed-term employment in the future, a notable rise from the 12 percent recorded a year prior. Businesses are evidently becoming more cautious about permanently binding their personnel. According to the Randstad and ifo data, 30 percent of companies already employ this instrument, which allows contracts to expire without the need for formal termination.
The intensity of this trend varies significantly by sector. Industry showed the highest proportion, at 42 percent, compared to trade at 22 percent and the service sector at 24 percent. Furthermore, large organizations are making heavy use of these contracts, with 59 percent utilizing them, compared to only about one in five small businesses. While legal guidelines limit baseless fixed-term contracts to a maximum of two years, the increased utilization of this flexibility can be interpreted as a sign of growing uncertainty. Amid sustained weak growth, shaky economic conditions, and frequent geopolitical shocks-such as the Iran war and its fallout-companies are securing maximum operational maneuverability.
However, this shift carries a social cost: increased insecurity for many employees who worry about their professional futures and may develop job-related anxiety. Businesses are also implementing other measures. According to the Randstad and ifo survey, 33 percent of respondents plan to make greater use of working time accounts in the coming months, 21 percent are utilizing overtime, and 15 percent are engaging in outsourcing. The survey suggests that economic pressure currently dominates the relationship between employees and management, being cited as a defining theme by 44 percent of the companies over the last twelve months-significantly ahead of any other factor.
The pressure manifests differently across industries. In the industrial sector, the strain is more pronounced, with 17 percent of companies stating that restructuring and job cuts dictate the work environment-more than double the rate reported in trade. In the service sector, businesses more frequently cite the implementation of new work models, which often serve as a response to cost pressures and the adoption of artificial intelligence.
