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Quality of employment

Dimension 4: Security of employment and social protection

Information on Dimension 4

Security of employment and social protection

Besides the level of income, the stability of an employment is of great importance. Only in this way the financing of the living can be guaranteed in a longer term and plans for future, which are often associated with financial liabilities, can be made.
Especially employees with fixed term contracts have little planning security – for example to start a family. Furthermore the loss of the job can be perceived as psychological stress and finding a new job can be difficult and tedious.

With a job loss or the entry into the retirement there is need for a social protection which guarantees the financing of the living in long terms. Here, the access to the unemployment insurance and the statutory pension insurance play an important role. The health care coverage or company pension schemes are considered in dimension 2.

Duration of employment at current employer

How long are employees in Germany employed with their current employer?
The duration of employment with the current employer can be viewed as an important indicator of the stability of employment, which may have an impact on the satisfaction of the employees. Employees feeling comfortable with their job and their employer are probably less likely to change the place of work. In the following, all employees aged 25 years or over are examined.

Nearly half of the employees stay with their current employer for more than ten years

Duration of employment with current employer by occupationsEnlarge picture

In 2017, nearly 45.1% of the employees surveyed were employed with their current employer for at least ten years. 19.1% had had the same job for five to ten years and a good third indicated a job tenure of less than five years. This distribution of duration of employment has not changed markedly during the last 10 years.



Short duration of employment due to fixed-term jobs

Among employees who had been employed for ten years and longer with their employer, 0.7% had a fixed-term employment contract. The proportion of fixed-term jobs is continuously increasing with a decreasing duration of employment: 36.8% of those with a duration of less than one year and 17.7% working between one and three years at the current job, had a fixed-term contract in 2017.

Men more often employed for a longer period

While the shares of men and women who had worked for less than ten years at their current firm differed only marginally, men had slightly more often been employed for ten or more years (46.4%) than women with 43.6%

Employed persons1 by duration of employment with current employer in 2017 in %
EmploymentLess
than
1 year
1 to
less
than
3 years
3 to
less
than
5 years
5 to
less
than
10 years
10
years
and
more

1 Employed persons aged above 25 years.

Source: Labour Force Survey

Person has an open-ended contract62.982.093.397.299.2
Person has a fixed-term contract36.817.76.52.70.7

Career start in part-time?

Part-time jobs are more common among employments with shorter job tenure. 36.9% of men and women who had been in employment for less than a year worked part time. This proportion is decreasing with an increasing duration of employment. Only 25.3% of persons employed for ten years and more with their current employer were part-time employed.

Unskilled workers are least likely to be employed for a long time with one employer. For just a third of them, the job tenure is longer than ten years. Among service occupations, the duration of employment with one employer is rather short, too.


Information on the Indicator

Description or definition
Percentage of employees (over 25 years) being employed less than one, one to less than three, three to less than five, five to less than ten or ten years and longer with the current employer in all employees (over 25 years).

Source
Labour Force Survey

Information for interpretation
In the last few years, the methodology of the labour force survey has been continuously improved in terms of employment status coverage. Therefore comparisons over time are partly limited. Methodological changes affecting the results were performed especially in 2005 and, more currently, for the years from 2011. Consequently, the results for those years can be compared with the results for previous years to a limited extent only.

In the context of the current changes , the extrapolation of microcensus data uses the population figures from the 2011 Census, which was conducted as at 9 May 2011. The results have been revised from 2010 onwards. With effect from the year 2016, the sample is based on the 2011 census data. This transition affects the comparability of the results with previous years.

For more information please refer to the quality reports and information on methods:
www.destatis.de -> Quality reports and Methods (only in German).

Fixed-term employment

What is the proportion of fixed-term employment contracts among employees? When calculating the rate of fixed-term jobs, all persons in dependent employment from the age of 25 years are included.
Younger employees who are in transition from the educational to the employment system and often have fixed-term contracts are not included in the calculation. So the group of apprentices, where fixed-term employment is widespread, is largely excluded, too. The indicator thus does not cover the whole extent of fixed-term employment.

One in twelve employment contracts has an expiry date

Fixed-term employees in selected EU-countriesEnlarge picture

In 2016, 8.5% of the employees aged 25 years or over in Germany had a fixed-term employment contract. The differences in the rate of fixed-term jobs between women (8.9%) and men (8.2%) almost vanished in comparison to the past. Over twenty years earlier, the difference had been somewhat larger. In 1991, 6.9% of the female and 5.2% of the male employees had a fixed-term job. In 2016 the majority (56.8%) of the employees with fixed-term jobs had a contract with a period of less than a year. For 21.2% of the respondents a duration between one and less than two years were recorded, further 11.2% had a contract duration between two and less than three years. 10.8% indicated having a contract ending after more than three years.

Fixed-term contracts have increased slightly since 2015

Since 1991, the rate of fixed-term jobs has been up from 5.9% to 8.5%. It should be taken into account that the increase shown is somewhat larger than reality, which is due to methodological changes. The share generally grew more strongly in phases of weak economic activity, while it was slightly down in upturn phases. In 2009, in consequence of the financial crisis, the share of persons having a fixed-term employment decreased slightly before it increased again moderately in the year 2010 to 2012. After declining in 2012 and 2013 the rate of fixed-term jobs increased again and reached a value of 8.5% in 2016.

Employees1 with fixed-term employment contracts in %
YearAge from … to … years
Total25 to 3435 to 4445 to 5455 to 6465+

1 Employees aged above 25 years.

Source: Labour Force Survey.

19915.98.45.04.44.412.8
19935.78.44.94.13.39.6
19956.29.35.34.24.05.4
19976.510.15.54.04.45.3
19997.411.96.64.74.34.6
20016.811.35.94.44.47.0
20036.512.15.43.94.27.2
20058.015.96.74.64.57.7
20078.517.07.25.14.57.1
20098.617.77.05.34.57.9
20118.918.77.45.54.46.5
20128.617.87.35.24.26.6
20138.317.77.14.93.87.0
20148.217.37.44.63.67.1
20158.417.97.64.63.67.3
20168.518.17.84.73.87.5

Germany among middle-ranking EU countries

Germany, with a fix-term rate of 8.5% is among middle-ranking EU countries. In an European comparison, Germany was below the EU average of just under 11.3% regarding the rate of fixed-term jobs and hence was among the middle-ranking EU member states. Rates of fixed-term jobs were particularly high in Poland about 23.8% and Spain with 23.6%. The six countries with rates of fixed-term jobs of less than 5% included United Kingdom, Bulgaria, Latvia, Estonia, Lithuania and Romania which ranks last with a rate of fixed-term jobs of 1.2%. In an international comparison, however, a lower rate of fixed-term jobs does not always mean higher job security because the national legislations on protection against dismissal differ.

In most countries, the rates of fixed-term jobs were higher for women. Germany was among the countries with the smallest differences between men and women.

In Germany, the rate of fixed-term jobs was the highest for members of academic occupations and unskilled workers with about 11.9% and about 9.9% for persons in the services sector.


Information on the Indicator

Description or definition
Percentage of persons in fixed-term employment (over 25 years) in all persons in dependent employment

Source
Labour Force Survey

Information for interpretation
The increase of persons in fixed-term employment in 2005 in comparison to 2004 is overestimated by the modified weighting and calibration methods. 

In the last few years, the methodology of the labour force survey has been continuously improved in terms of employment status coverage. Therefore comparisons over time are partly limited. Methodological changes affecting the results were performed especially in 2005 and, more currently, for the years from 2011. Consequently, the results for those years can be compared with the results for previous years to a limited extent only.

In the context of the current change, extrapolation has been based on the key population figures rolled forward from the 2011 Census conducted with reference day 9th May 2011, and the results for the period 2011-2013 have been revised.

For more information please refer to: Quality reports and Methods (only in German).

Fixed-term employees wanting a permanent job

What is the proportion of involuntary fixed-term employees? The indicator shows the share of employees who have a fixed-term job because they did not find a permanent job. Employees from the age of 25 years are included.
There may be various reasons for employees to have a fixed-term contract. Apprenticeship contracts and contracts for a trial period automatically involve a fixed term. The Labour Force Survey also includes a question on whether the employee sought a permanent job but did not find any.

Respondents who indicated to have sought a permanent job but did not find any are considered as 'involuntary' fixed-term employees. Long-term occupational and personal life planning is made difficult by fixed-term employment contracts.

More than a third involuntarily on a fixed-term basis

Fixed-term employees wanting a permanent jobEnlarge picture

36.5% of the fixed-term employees questioned in 2016 indicated to have accepted a fixed-term job because they had not found a permanent job. 31.6% indicated a contract for a trial period to be the reason for the fixed term and 25.7% had an apprenticeship. About 6.2% had deliberately chosen a fixed-term job.

Women (37.8%) indicated slightly more often than men (35.2%) to work involuntarily on a fixed-term basis.

The share of involuntary temporary employees was the highest among unskilled workers. At 40.5%, employees of company service providers also reported quite frequently to be employed on a temporary basis, since they had not found a permanent position.



Fixed-term employees1 in involuntary fixed-term employment in 2016
in %
Age from … to … yearsTotalFemaleMale

1 Fixed-term employees aged above 25 years.

/ = No response, because numerical value is not reliable enough.

Source: Labour Force Survey.

25 - 3428.429.927.1
35 - 4441.240.741.7
45 - 5447.347.846.7
55 - 6457.756.559.1
65 and older///
Total36.537.835.2

Unwanted fixed-term contracts on decrease since 2011

While the proportion of employees who are involuntarily employed in fixed-term employment has risen from 2002 to 2007, it decreased in 2008 and 2009. After a re-growth in 2010, the proportion of unwanted time contracts has fallen again since 2011. In 2016, its share rose slightly to 36.5% but still was 16 percentage points lower than the previous high in 2007 with 51.8%.


Information on the Indicator

Description or definition
Percentage of involuntary fixed-term employees over 25 years in all persons in dependent employment over 25 years with valid information on reasons for fixed-term employment

Involuntary fixed-term employment is given if the employed person did not find a permanent job.

Source
Labour Force Survey

Information for interpretation
The increase of persons in fixed-term employment in 2005 in comparison to 2004 is overestimated by the modified weighting and calibration methods. 

In the last few years, the methodology of the labour force survey (microcensus) has been continuously improved in terms of employment status coverage. Therefore comparisons over time are partly limited. Methodological changes affecting the results were performed especially in 2005 and, more currently, for the years from 2011. Consequently, the results for those years can be compared with the results for previous years to a limited extent only.

In the context of the current change, extrapolation has been based on the key population figures rolled forward from the 2011 Census conducted with reference day 9th May 2011, and the results for the period 2011-2013 have been revised.

For more information please refer to: Quality reports and Methods (only in German).

Temporary employment

Temporary employment refers to an employment relationship in which a company places or 'lends' an employee to a third party (temporary agency worker).

Such a tri-partite relationship can have both advantages and disadvantages for employees: On the one hand, it may provide a way out of unemployment. Additionally, temporary employment often allows people to get to know several different companies within a short period. On the other hand, the duration of employment is markedly shorter, indicating a lower stability of employment and a related higher uncertainty in terms of salaries.

The indicator examines the share of temporary workers in all employees over 25 years.

2.6% of the employees are temporary agency workers

Share of temporary agency workers in selected occupational groupsEnlarge picture

In 2016, 2.6% of the employees were employed by temporary employment agencies. After a dynamic increase of temporary employment during the years till 2010 from 2.1% to 2.7%, the share of temporary workers decreased in 2011 and has since stagnated by the 2.6%.



Temporary work as full-time job

This activity was a full-time job for most of the temporary workers surveyed in 2016: 85.0% of them reported to do temporary work as a full-time job. Only 15.0% worked part time. In comparison to this the part time rate of all employed is at 28.4%.

Share of temporary agency workers1 in all persons in dependent employment in 2016
in %
Age from … to … yearsTotalFemaleMale

1 temporary agency workers aged above 25 years.

/ = No response, because numerical value is not reliable enough.

Source: Labour Force Survey.

25 to 343.52.24.7
35 to 442.91.83.8
45 to 542.21.72.8
55 to 642.11.52.7
65 and older///
Total2.61.83.4

Temporary workers are often middle-aged men

Considering men and women separately, it is striking that men are almost twice as likely to be temporarily employed as women: two thirds of the persons employed in a temporary employment agency are men, a third are women.

This could be due to the occupations in which temporary workers are mainly employed: The majority of the temporary workers surveyed were craft workers and in related occupations with 24.3%, where usually more men are found, or are employed as unskilled workers (19.8%). At some distance, they were followed by plant and machine operators and assemblers, with 14.5%, office workers and commercial clerks with 13.6%. The largest share of temporary workers is among the 25 to 34-year-olds: 4.7% of men employed and 2.2% of women are employed as temporary workers in this age group.

Information on the Indicator

Description or definition
Percentage of temporary agency workers (over 25 years) in all employees (over 25 years).

Source
Labour Force Survey.

Information for interpretation
Temporary agency workers are captured in the Labour Force Survey by a separate question (self-assessment of respondents).

In the last few years, the methodology of the labour force survey has been continuously improved in terms of employment status coverage. Therefore comparisons over time are partly limited. Methodological changes affecting the results were performed especially in 2005 and, more currently, for the years from 2011. Consequently, the results for those years can be compared with the results for previous years to a limited extent only.

In the context of the current change, extrapolation has been based on the key population figures rolled forward from the 2011 Census conducted with reference day 9th May 2011, and the results for the period 2011-2013 have been revised.

For more information please refer to the quality reports and information on methods: Quality reports and Methods (only in German).

Self-employed without staff

The indicator shows the proportion of 'solo self-employed' in all persons in employment aged 15 to 64 years. Solo self-employed are self-employed persons without staff, also referred to as own-account workers.

Solo self-employed must not only pay themselves the contributions to health and pension insurance but also take a usually higher business risk than self-employed with employees.

Self-employed who are on their own are often in the start-up phase. That kind of self-employment is frequently characterised by instability and insecurity as time not worked cannot be compensated for.

5.0% of persons in employment are self-employed and have no staff

Self-employed without staffEnlarge picture

In 2017, 5.0% of all persons in employment aged between 15 and 64 years were self-employed without any staff. Among women the share was smaller (4.3%), while it was 5.6% for men.



Self-employed without staff in 2017
in %
Age from … to … yearsProportion in all persons in employment
TotalFemaleMale
Source: Labour Force Survey.
15 to 241.21.01.4
25 to 343.22.83.6
35 to 445.24.95.6
45 to 546.05.26.7
55 to 647.05.78.1
Total5.04.35.6

Government subsidies affect development

Compared with 1992, the share of self-employed who are on their own rose by just under two percentage points. At the time it had been 3.6%.

The share of solo self-employed rose rather continuously between 1991 and 2005. The growth period from 2003 onwards was probably closely related to the business start-up grants – also referred to as 'Me PLC' ("Ich-AG") – that had been introduced by the Hartz laws.

In mid-2006, the business start-up grant was modified and restricted to a smaller number of eligible people. Consequently, the proportion of solo self-employed slightly decreased in the subsequent period. After a period of stagnation from 2009 to 2012 the share of self-employed without any staff decreases.

The largest share of solo self-employed was to be found in agriculture and forestry (20.0%). There were many self-employed without any staff also in the real estate sector (15.5%) as well as in business services (10.3%) and in communication and information industries (10.2%).


Information on the Indicator

Description or definition
Percentage of solo self-employed (15-64 years) in all persons in employment (15-64 years).

Solo self-employed are self-employed without staff.

Source
Labour Force Survey

Information for interpretation
Changes in labour market policy supporting the establishment of self-employment should be taken into account for comparisons over time.

In the last few years, the methodology of the labour force survey has been continuously improved in terms of employment status coverage. Therefore comparisons over time are partly limited. Methodological changes affecting the results were performed especially in 2005 and, more currently, for the years from 2011. Consequently, the results for those years can be compared with the results for previous years to a limited extent only.

In the context of the current changes , the extrapolation of microcensus data uses the population figures from the 2011 Census, which was conducted as at 9 May 2011. The results have been revised from 2010 onwards. With effect from the year 2016, the sample is based on the 2011 census data. This transition affects the comparability of the results with previous years.

For more information please refer to the quality reports and information on methods: Quality reports and Methods (only in German).

Persons employed entitled to unemployment benefits

What is the proportion of employees who are entitled to wage replacement benefits in case of unemployment?
Persons in dependent employment are entitled to benefits if they paid contributions to unemployment insurance for at least a year in the last two years. The reference variable is persons in paid employment aged between 15 and 64 years. Not included are public officials as, due to their status, they cannot be dismissed.

The contribution to unemployment insurance currently is 3% of gross remuneration and employers and employees each pay half of it. Unemployment benefit I paid in case of need amounts to 60% of previous year’s gross salary and to 67% if there are children. Generally it is paid for a year.
After that period, all people capable of earning get unemployment benefit II which, however, is not an insurance benefit and is based on the persons’ need of assistance.

The minimum contributory period required to be entitled to unemployment benefit has not been taken into account in the calculation. Consequently, the share of persons insured and entitled to wage replacement benefits is somewhat smaller in reality.

88.3% of employees are insured against unemployment

Employees entitled to unemployment benefitsEnlarge picture

In 2016, 88.3% of the employees were entitled to unemployment benefit I should they lose their job.

The proportion of employees insured against unemployment was slightly down since 2000. In 2000 it had been 88.7%, then it decreased until 2006 to 85.5% and has increased by 2.5 percentage points until 2007. A factor contributing to that development was the extension of marginal jobs which do not involve such insurance.

The number of employees fully subject to social insurance contributions decreased between 2000 and 2005, whereas the number of persons in marginal part-time employment was up in that period as a result of legal changes introduced in 2003. Since 2006, the number of persons fully subject to social insurance contributions has again increased slightly. As the increase in the number of persons in marginal employment was smaller, the share of employees insured against unemployment has increased slightly from 86.5% in 2009 to 88.3%.

Proportion of employees entitled to unemployment benefits in 2006 and 2016
in %
SexTotalViz
GermanForeigner
Source: Federal Employment Agency.
30. June 2016
Female84.485.175.0
Male92.392.689.7
Total88.388.983.5
30. June 2006
Female79.580.269.2
Male91.391.687.2
Total85.586.079.5

Foreign employees are less often insured against unemployment

The rate of insured persons among foreigners was lower than among German citizens: in 2016, 83.5% of the foreign employees, compared to 88.9% of the German employees, were insured against unemployment. Since 2006 the difference has increased: at that time, the difference between German and foreign employees took seven percentage points.


Information on the Indicator

Description or definition
Percentage of persons in employment with full social insurance contributions in all persons with social insurance contributions.

Source
Employment Statistics of the Federal Employment Agency.

Information for interpretation
Since only persons with full social insurance contributions pay contributions to the unemployment insurance, these two groups are examined here. All employed with social insurance contributions include persons with full social insurance contributions as well as low-paid workers and short-term employees with reduced social insurance contributions.

Self-employed paying contributions to unemployment insurance on a voluntary basis are not taken into account.

For methodological information on the Employment Statistics please refer to: Federal employment Agency.

Statutory pension insurance

What is the proportion of the labour force insured under statutory pension insurance schemes? The labour force comprises all people working or looking for a job, that is persons in employment and unemployed. Pension entitlements of people not looking for work are not included.

In Germany, in 2017 all employees below the contribution assessment ceiling pay 18.6% of their gross income as a contribution to the statutory pension insurance scheme. Half of that amount is paid by the employer. In 2017 the assessment ceiling was a monthly income of Euro 6,350 in the old Länder and of Euro 5,700 in the new Länder. For registered unemployed, too, the employment agency pays a pension contribution leading to pension entitlements. Self-employed may voluntarily insure themselves under a statutory pension insurance scheme. The amount of the contributions and the period over which they are paid will later determine the old-age pension.

Until the end of 2011, people were entitled to a pension without any deductions after the age of 65. Since 2012, the retirement age has started to be gradually raised to 67 years.
All people aged between 15 and 64 who do not receive pension payments yet were asked if they are insured on a voluntary or compulsory basis.

A large percentage of the labour force have a pension insurance

Economically active population insured under statutory pension schemesEnlarge picture

In 2017, 83.3% of the labour force in Germany were insured under a statutory pension insurance scheme. In 2017, the majority of people insured were insured under a statutory pension insurance scheme on a compulsory basis (79.9%), while 3.4% were insured on a voluntary basis.

However, those rates underestimate the extent of social security after retirement because pension entitlements of public officials are not included here. People making old-age provisions only on a private basis were not included either.

The indicator does not provide any information on the level of the pensions the people insured are entitled to or on whether those entitlements are sufficient for the needs at old age.

Low contributions or many interruptions in paying the contributions may later result in relatively low statutory pensions. Therefore company and private old-age pension schemes are getting more and more important for old age.

Economically active population who are insured under statutory pension insurance schemes and do not receive pension payments
in %
SexInsured under statutory pension insurance schemes on
compulsory basis voluntary basiscompulsory
or on
voluntary basis
Source: Microcensus.
2017
Female81.22.884.0
Male78.83.982.7
Total79.93.483.3
2013
Female78.52.881.3
Male76.34.080.2
Total77.33.480.7

One in six is not insured under statutory pension insurance schemes

Persons who are not insured under statutory pension insurance schemes are either officials or other persons in employment being uninsured or insured on a private basis.

Actually, 38.5% of those not insured are self-employed persons and another 29.5% are officials. However, almost 30.1% of the employees are also not insured under statutory pension insurance schemes. Presumably, these are mainly persons in marginal employment.


Information on the Indicator

Description or definition
Percentage of labour force (between 15 and 64 years) who are members in statutory pension insurance and do not receive pension payments yet in total labour force (between 15 and 64 years).

Source
Microcensus

Information for interpretation
Comparability over time is partially limited due to changes in questions concerning the statutory pension insurance.
In the last few years, the methodology of the Microcensus has been continuously improved in terms of employment status coverage. Therefore comparisons over time are partly limited. Methodological changes affecting the results were performed especially in 2005 and, more currently, for the years from 2011. Consequently, the results for those years can be compared with the results for previous years to a limited extent only.

In the context of the current changes , the extrapolation of microcensus data uses the population figures from the 2011 Census, which was conducted as at 9 May 2011. The results have been revised from 2010 onwards. With effect from the year 2016, the sample is based on the 2011 census data. This transition affects the comparability of the results with previous years.

For more information please refer to the quality reports and information on methods: Quality reports and Methods (only in German).

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