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Temporary employment for the flexible use of human resources

Term Paper 2015 20 Pages

Business economics - General

Excerpt

TABLE OF CONTENTS

TABLE OF FIGURES

A. INTRODUCTION
1. PROBLEM AREA
2. THE AIM OF THIS PAPER
3. THE STRUCTURE OF THIS PAPER

B. THEORETICAL PART
1. RELEVANT TERMS
1.1 Definition
1.2 From the atypical to precarious gainful employment
1.3 Function of the temporary employment

C. DEVELOPMENT OF THE TEMPORARY EMPLOYMENT IN GERMANY

D. ASSOCIATED ADVANTAGES AND DISADVANTAGES
1. ADVANTAGES
2. DISADVANTAGES

E. CONCLUSION

F. REFERENCE LIST

TABLE OF FIGURES

Figure 1: Triangular relationship in the area of temporary employment

Figure 2: Selection of suitable employees for a job position

Figure 3: Pros of direct and indirect labour costs based on temporary work

A. INTRODUCTION

1. PROBLEM AREA

No other form of employment has gained in importance in such a short period. Since 1990, temporary employment has grown enormously and has gained a larger value than before (Luo, Mann, Holden, 2010). In many companies, temporary work has be- come an alternative form of employment to cover additional work or personnel short- falls. Due to this, the social image of temporary employment has increased slightly. Nowadays, companies use temporary employees as an alternative to reduce their cost and remain profitable and competitive in the market (Eisenberg, 1999). This means that many companies use temporary employees to supplement their person- nel needs and as a strategy to reduce their personnel cost. Depending on the situa- tion, temporary employment agreements can be both beneficial and harmful to com- panies (Kirk, Belovics, 2008).

On the other hand, temporary work has struggled against quite a negative image. Headlines, such as modern slavery, have been consolidated in connection with tem- porary work. This assumption highlights that temporary employment is used by com- panies to reduce labour costs and shift employment risks away from companies to- wards the employees. Therefore, it could be argued why temporary employees offer their manpower at the lowest possible wages without job security or career pro- spects.

In recent years, the policy has also recognized the benefits of temporary work for formerly unemployed employees and the situation for unemployed employees has developed significantly with new laws as well. This proves to be a significant growth market for temporary work. According to the authors Kirk and Belovics (2008), the flexibility of this concept is an important advantage for companies within a highly competitive and dynamic corporate environment. Companies are capable of adapting their labour force to meet changing labour demands. Depending on requirements, temporary employees can be available at any time and after a production completion or completed assignment, the company is entitled to terminate the contract without further notice. Even temporary peaks or sudden personnel deficits can be covered through the use of temporary labour force. Hence, companies have a lower risk to employ employees with less work. In practice, therefore, it seems that temporary employees can be deployed for short, medium or long-term projects.

In 2009, Manfred and Jahn suggested that many companies employ temporary workers on a trial basis in order to check their abilities in a job. They also pointed out that companies can reduce their costs and improve their financial situation. Mostly, temporary employee remuneration is less than permanent employee remuneration. At the same time, companies thereby avoid additional hiring fees or redundancy costs.

2. THE AIM OF THIS PAPER

A fundamental question that arises here is how temporary employment can be inte- grated into existing labour and social structures of the company in the event of dura- ble and intensive use and what measures should be considered by companies.

According to this, the purpose of this paper is to analyse whether temporary work is a viable alternative to traditional employment. In particular, the advantages of temporary work will be discussed in association with the risks. Looking at the processes of recruitment and the integration of additional decision-making structures, such as the works council, makes it clear that the use of temporary employment requires particular requirements within the internal communication.

3. THE STRUCTURE OF THIS PAPER

The purpose of this paper, based on the flexible use of human resources in case of temporary employment, is divided into four parts. The first part, B. Theoretical Part, of this paper discusses possibilities and measures regarding the subject matter. This approach also includes clarifying concepts based on basic theoretical approaches. Based on this knowledge, the fundamental functionality of temporary work as well as its central problems are presented and discussed.

Moreover, the focus on the second part, C. Development of Temporary Employment in Germany, will highlight whether and to what extent the current jurisdiction and the permanent changes of recent years influence the temporary employment sector in Germany.

In the next heading, D. Associated Advantages and Disadvantages, the most im- portant advantages and disadvantages of temporary employment will be described.

The last chapter of this thesis, E. Conclusion, will present all gathered findings from previous chapters and finally this thesis will be completed.

B. THEORETICAL PART

1. RELEVANT TERMS

Alongside the collective term temporary employment, there are other designations, such as temporary work and personnel leasing. The rental companies thereby prefer the term personnel leasing, whereby trade unions use the term temporary work very frequently. At the international level, the term temporary work occurs very often.

Therefore, in order to understand the following approaches in this essay better, it needs to define and explain some theoretical terms reasonably.

1.1 Definition

In specialized literature, there are numerous definitions of temporary employment. The legal basis is based on the Arbeitnehmerüberlassungsgesetz (AÜG). The AÜG is the law which regulates the business of one company transferring its employees to work temporarily with another company within Germany (Niebler, Biebl, Ross, 2003). According to the §1 Abs.1 AÜG, temporary work is seen to occur when the employer acts as a lender and temporarily provides an employee to a third party, or to be more precise, to the borrower for the work required. In that respect a distinction must be drawn between commercial and special temporary employment.

Commercial temporary employment assumes that on the lender’s side the selfemployed activity is oriented on a permanent basis and aims to achieve economic benefits (Wienland et al., 2001). This means that temporary employees normally carry out their work performance outside their temporary employment agency.

On the other hand, special temporary employment requires that the hire of labour takes place to third parties only in exceptional cases, for instance if employees nor- mally carry out their work within the business that employed them. In this point, it is also important to mention that according to §1 Abs.3 AÜG, the work performance must be of a limited duration and the reemployment needs to be ensured by the hir- ing company. A distinction between legal and illegal temporary work should not be taken at this point as it is assumed that commercial lenders shall hold a valid license from the Federal Labour Office and comply with the related regulations of AÜG.

1.2 From the atypical to precarious gainful employment

In the terminology, there are different dimensions concerning atypical gainful employment. The most common definition of atypical gainful employment is defined as a deviation from the structural characteristics of normal employment arrangements (Rudolph, Schröder, 1997). This primarily relates to income, such as monthly remuneration depending on the qualification of the employee as well as performance and seniority principle. Among the most well known atypical forms of employment are part-time, marginal and temporary employments.

Additionally, temporary employment is also designated as precarious gainful employment as it has tertiary social and legal standards in relation to the form of normal employment arrangements (Kraemer, Speidel, 2004). Furthermore, temporary employment commonly includes the attribute precarious, which expresses the instability of labour relations. In this approach, it becomes apparent that poorer working conditions, such as less remuneration as well as the occupational prospects of the employees, are considered negative.

1.3 Function of the temporary employment

The function of temporary work describes the respective obligations of the actors in- volved in compliance with a clear division of responsibilities, which is indicated by the figure Figure 1: Triangular relationship in the area of temporary employment below.

In temporary employment, companies temporarily ask for an employees’ availability who is employed in other temporary employment agencies as an employee (Alewell, 2005). This approach exactly reflects a triangular relationship between user companies, temporary employment agencies and temporary employees.

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Details

Pages
20
Year
2015
ISBN (eBook)
9783668169241
ISBN (Book)
9783668169258
File size
683 KB
Language
English
Catalog Number
v317602
Institution / College
University of Applied Sciences Braunschweig / Wolfenbüttel; Salzgitter
Grade
1,3
Tags
temporary

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Title: Temporary employment for the flexible use of human resources