Empowering Digital Transformation: The Vital Role of Contract Workers in German Companies

Findings suggest contractors are essential in driving digital transformation within German businesses. A 2023 report by Institut der deutschen Wirtschaft K?ln e.V. (IW) suggests that external contract workers in German companies are crucial in introducing new technology to organisations. The report highlights findings from the 2022 IW personal panel surveys and discusses the role of contract workers in driving digital transformation in German companies. Throughout this piece, we will examine the key insights from this report and what it means for the future of contracting in Germany.

Key insights:

The report's findings are based on an IW-Personal panel 2022 survey involving responses from 909 companies. The survey provides insights into the use and impact of external personnel in various sectors. From the data collected in the surveys, the report concluded the following insights:

• Increased prevalence of contractors: The report highlights that in 2021, 25% of German companies employed contractors or self-employed workers.
• Benefits of hiring contractors: The report surmises that companies use the services of external contract workers to access their specific expertise at short notice or temporarily. Contractors can bring with them knowledge that can foster innovation in organisations. Contract workers are seen as strategically important in this area, especially in IT services, where they help improve processes and support innovation by introducing their external expertise.
• The role contractors play in digital transformation: In their report, IW highlights that contract workers and freelance professionals play a crucial role in the digital transformation of German organisations. Contractors can help introduce digital technologies and practices to organisations through their external expertise. This is particularly true with cutting-edge technologies such as Artificial Intelligence (AI) and Virtual Reality (VR). Similarly, contract workers who have worked with other firms may have invaluable experience working with existing technologies such as big data, data analytics, and cloud computing and bring new about their implementation in an organisation and insights and ways of working with them. The report also highlights that German companies depend on external contractors when they require additional resources in a limited time and need to hire external staff quickly. These external staff members act as catalysts for digital transformation.

• How hiring freelancers/contractors can help organisations mitigate risk: The report found that hiring external talent in the form of contractors aids organisations in mitigating risk and managing uncertainty. Organisations can employ the services of highly skilled contractors on a fixed-term basis as issues arise, granting an organisation a more flexible hiring option. Availing of the services of contract workers can be particularly beneficial if an organisation is experiencing a temporary personnel shortage.

Future outlook:

The increasing prevalence of contract workers within German organisations is unsurprising given the growing skills gap many countries, such as Germany, are experiencing. Check out our article on the ever-increasing demand for contractors, where we explore the most in-demand skills, roles, and opportunities.

In conclusion:

The need for temporary staff and access to specialised knowledge drives contractors' increased use and prevalence in German companies. With emerging technologies, a growing skills gap, and the benefits and opportunities that arise from hiring contract talent, the adoption of organisations in Germany of contract workers will likely grow in the coming years. For more information on hiring contractors in Germany, check out our article here.

If you want to engage contractors, contact us today! At 3C Global, we ensure our clients comply with German law by following the country's fundamental contractor compliance principles. Our knowledgeable team is on hand to ensure your business can benefit from contracting while being compliant.

You can find the full report on the Institut der Deutschen Wirtschaft's website.