External personnel are workers who, rather than being directly employed by the company for whom they currently work, are temporary workers, freelancers or some other kind of third-party employee. In essence, they are individuals who perform activities on the basis of service or work contracts. In contrast to a company’s regular employees, external personnel generally are not entitled to the benefits granted by German labor law, such as statutory protection against dismissal, continued payment of wages in event of illness or paid leave.

Partly due to the current labor market’s very limited supply of highly-qualified specialists willing to work as employees in some areas, and partly due to the increasing demand for flexibility, there is currently considerable need for external personnel. The engagement of external personnel is also a very popular choice for companies because it keeps them unfettered from certain parts of labor law, reduces the costs associated with hiring and terminating directly employed personnel and decreases the need for personnel management. Companies can instead concentrate on their own core competencies and thus work more efficiently. The engagement of external personnel also provides easier access to external know-how.

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