Part-time Slows Down the Mittelstand: Why Germany Needs More Flexibility

Germany's labor market is struggling over hours—not just heads. Especially in the Mittelstand, three developments are colliding at once: a high share of part-time work, ongoing skilled labor shortages, and labor laws that leave companies little room for maneuver in daily workforce planning. As a result, the bottleneck for many companies is not only visible in job postings, but in the shift schedule: opening hours, peak times, and special tasks must be covered with increasingly fragmented working time models.

Background: High Part-Time Share and Skilled Labor Shortage

Across industries, around 40 percent of employees now work part-time; the Institute for Employment Research (IAB) classifies this as surpassing the 40 percent mark (iab.de).

In retail, more than 100,000 positions remain unfilled, according to the figures cited in the article. The situation is therefore not just a recruitment problem, but a coordination problem in day-to-day operations.

Why High Part-Time Rates Hit the Mittelstand Particularly Hard

The impact of part-time work on planning is illustrated by the example of Osnabrück retailer Lengermann & Trieschmann (L&T), which deliberately positions itself against online competition with in-store shopping experiences and additional services that require more staff. The company employs 487 people. The part-time rate is about 65 percent, nearly 80 percent of employees are women; just over a third work full-time. For management, a balanced ratio between full-time and part-time is crucial to reliably cover tasks, opening hours, and peak times.

Part-time is by no means just a "disruptive factor," but in retail is often a prerequisite for remaining operational at all: those who want to cover peak times in the afternoon, on weekends, or during seasonal peaks need working hours that are compatible with real life. At the same time, each additional part-time contract increases system complexity. When many employees can only offer limited time windows, managers must organize more handovers, set up broader teams, and plan redundancies—which quickly becomes expensive, especially in smaller businesses.

It becomes particularly tricky when key competencies cannot be "overlapped" at will. L&T describes how short-term changes in working hours for specialists—such as from IT or controlling—are cushioned by larger teams and the distribution of know-how and access rights to several colleagues from adjacent areas. This is a typical Mittelstand strategy: not every position can be refilled immediately, so dependency on individuals is reduced. But this very safeguarding ties up time, requires training, and shifts capacity away from core business.

Labor market researcher Oliver Stettes, head of the Work Environment and Collective Bargaining Policy cluster at the German Economic Institute (IW), describes the structural asymmetry: small businesses have greater difficulty keeping work volume stable as part-time increases, while larger companies can more easily absorb absences and hour shifts internally. This is relevant for the overall economy, because according to a KOFA study cited in the article, 72.3 percent of all open positions were advertised by SMEs; between July 2024 and June 2025, 281,532 skilled workers were missing as a result.

Part-Time and Working Time Law: When Entitlements Displace Planning Reliability

Legally, the debate is based on two pillars: the Part-Time and Fixed-Term Employment Act (TzBfG) and the Working Hours Act (ArbZG). Since the TzBfG came into force in 2001, companies must review requests for reduced working hours and justify any rejection. Stettes points out that these rules were created in a different labor market environment: at that time, the aim was to expand employment and especially to strengthen women's participation in the workforce. The article classifies this as a success—even in a European comparison—and thus points to the core of the goal conflict: more compatibility has enabled employment, but today, in a tight labor market, it increases the pressure on operational stability.

Additional momentum comes from "bridge part-time." It gives employees the right to temporarily reduce their working hours and then return to their previous contractual hours. According to the Federal Ministry of Labor, the typical period is between one and five years (bmas.de). From a business perspective, not only the reduction is crucial, but also the uncertainty in personnel planning: if the return must be firmly planned, a replacement cannot simply be established permanently, but solutions must be built "for a time." Stettes therefore calls for the abolition of bridge part-time.

At the same time, working time law is in focus. The article names as central guidelines the daily maximum working time of usually eight hours and a rest period of eleven hours. In practice, the ArbZG is more nuanced: an extension to up to ten hours is possible if, within a compensation period, an average of eight hours per working day is achieved; the upper limit is an average weekly working time of 48 hours (arbeitszeit-klug-gestalten.de). The political debate is less about "more hours," but about their distribution: away from a strongly day-based view towards a weekly one—with the total volume unchanged. Stettes refers to IW studies, according to which this does not increase occupational safety risks.

What Companies Demand—and Where the Real Levers Lie

• First: Tie part-time entitlements more closely to specific occasions. Mark Rauschen, who leads L&T and is also honorary president of the leading association for the textile, shoe, and leather goods retail trade in Germany (BTE), advocates focusing the legal right to part-time on "important occasions," such as caring for relatives. The business logic behind this is to increase planning reliability without fundamentally questioning compatibility.
• Second: Full-time must become realistically feasible—especially for parents. Rauschen sees the expansion of childcare infrastructure as the central lever: childcare on weekdays until 8 p.m. and explicitly also on Saturdays. Sectors with long opening hours and a high proportion of women—such as retail and care—are particularly dependent in practice on whether childcare and shift systems match.
• Third: More flexibility within clear protection boundaries. Switching from a daily to a weekly maximum working time is intended to smooth out shift schedules and better reflect work peaks. The article links this to the expectation that part-time employees could manage their working hours more autonomously and—if life circumstances allow—more easily increase their hours.

Classification: Not a Culture War, but a Goal Conflict with Numbers

The debate is less a dispute of "part-time versus full-time" than a weighing of social reality and operational reliability. The industry comparison shows why retail is particularly under pressure: while part-time rates in the automotive industry or skilled trades are well below the overall economic average of just under 40 percent, the part-time rate in retail is more than two-thirds; a similarly high rate is described in care professions.

There is also the demographic component, which Stettes highlights: as large birth cohorts retire and smaller ones follow, the economy loses working hours. Qualified immigration remains important, but will not close the gap alone. This shifts the focus to domestic working volume—and with it the question of whether the framework conditions are set so that additional hours are even possible and attractive.

For the Mittelstand, it boils down to a pragmatic core question: how can compatibility be ensured without companies suffocating from coordination, handovers, and legal rigidity? Anyone looking for answers will inevitably end up not only at labor law, but also at childcare, tax incentives, and the design of working time within reliable protection standards.