Changes in Staffing Levels (1st Quarter 2021)

At the time of the survey, a significant proportion of personnel managers surveyed were unable to say to what extent new jobs would be created in 2021 or whether there would be job cuts. By contrast, over one-third revealed plans to increase their headcount in 2021. Approximately one-fifth of the personnel managers surveyed expected job cuts this year, preferably employees due for regular retirement. However, several companies also intend to announce operational redundancies.

Personal Planing is still ongoing

Personnel managers’ responses to the question of whether companies aim to create new jobs in 2021 were fairly evenly balanced. Across all three economic sectors, 36 percent intend to create new jobs, 30 percent stated that no new positions were to be advertised, and the remaining 34 percent of personnel managers were unable to give any indication at this stage. A look at the size categories reveals that, first and foremost, large companies with at least 500 employees have greater planning security, with 65 percent reporting newly created positions.

According to the personnel managers surveyed, the most popular method of announcing vacancies was external job advertisements (79 percent), followed by placements from the German Federal Employment Agency (53 percent). In-house job advertisements are deployed by 46 percent, closely followed by recommendations at 41 percent. Just one-quarter of the personnel managers surveyed use the services of recruitment agencies. Other channels include social media and offering trainees or temporary staff permanent contracts.

Of the personnel managers surveyed, 44 percent did not anticipate any redundancies in their companies in 2021. While 17 percent confirmed that jobs were to be cut, 40 percent were unable to say at this stage. One-quarter of the personnel managers surveyed in manufacturing announced a reduction in staff levels. In terms of size, more jobs are to be cut in medium-sized to large companies, with approximately 38 percent of respondents indicating plans to this effect. Where job cuts were planned, more than half of the personnel managers surveyed endeavored to achieve their targets through employees entering regular retirement; 43 percent intend to implement operational redundancies, 32 percent encourage voluntary redundancy, 27 percent offer early retirement, and 20 percent flexible retirement. In particular, the last two options figure prominently in manufacturing and in large companies with at least 500 employees.

Little change in companies’ fixed-term employment policies

Against the backdrop of the Covid-19 pandemic, information on the development in the number of fixed-term contracts is of particular interest. To this end, personnel managers were asked to indicate the share of fixed-term contracts for staff hired in 2020, and whether this was higher or lower than in 2019. In 12 percent of cases, there were no new hires at all in 2020, while a good quarter stated that their companies did not offer fixed-term contracts on principle. There were striking variations within the economic sectors, however. In the service sector, just under 30 percent reported that they issued permanent contracts, with this applying to just 22 and 16 percent of the companies surveyed in trade and manufacturing respectively. The distribution of the share of fixed-term contracts for new hires across the economic sectors and size categories reveals some interesting discrepancies. While the median rate of fixed-term contracts for new staff is 10 percent for all companies, it is significantly higher for manufacturing companies, namely 50 percent. On average, the lowest share of fixed-term contracts – 26 percent – is found among service providers. A comparison by size category shows that companies with at least 250 employees are more likely than small companies to hire new staff on fixed-term contracts.

The following figure compares the share of fixed-term contracts for new hires in 2020 and 2019. Generally speaking, there is no change in the fixed-term employment policy across all economic sectors. At roughly 16 percent, the proportion of personnel managers in manufacturing who indicated a higher or lower share of fixed-term contracts in 2019 is more or less equal. With a barely fluctuating 12 percent on both sides, the situation is similar in trade. Among the service providers, 21 percent of the personnel managers surveyed stated that the share of fixed-term contracts for new hires in 2020 was lower than in 2019, while 36 percent reported a higher share than the previous year.