German companies plan to increase use of fixed-term contracts

A survey conducted by Randstad and the Ifo Institute among 469 German personnel managers indicates that companies intend to significantly increase the use of fixed-term employment contracts. For the third quarter of 2026, 26 percent of surveyed firms plan to expand the use of temporary contracts, a substantial increase from 12 percent a year prior.

Currently, 30 percent of businesses utilize fixed-term contracts. The usage varies by sector, with the industrial sector at 42 percent, compared to 22 percent in retail and 24 percent in the service sector. Large corporations show a much higher reliance on these contracts at 59 percent, while only about one in five small businesses uses them.

Analysts suggest this trend signals growing economic uncertainty driven by weak growth, unstable economic conditions, and geopolitical shocks. To maintain flexibility, companies are also looking toward other measures: 33 percent plan to use working time accounts more heavily, 21 percent intend to utilize overtime, and 15 percent are considering outsourcing.