Due to recent changes in labor laws, more and more German companies are hiring employees through temporary employment agencies, a key reason German unemployment has dropped dramatically in the last two years. However, the rise in temporary workers has created friction with labor unions, who claim their ability to negotiate for better wages and working conditions has been undermined. The increasing demand for flexible employees is in part due to the companies' need to compete with Eastern European businesses, where the labor supply is cheaper than Germany's more highly skilled workers.
See "Agency Workers Transform German Labor", Adam Cohen, The Wall Street Journal, June 12, 2007