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

Part-time work is the key for many employees to balance family, caregiving, and career—and for companies, a way to adjust staffing to peak times. At the same time, in a labor market with a persistent skills shortage, it is becoming a bottleneck for many medium-sized businesses: Not because part-time is "bad," but because scarce qualifications, changing availabilities, and legal requirements hit small teams especially hard.

The extent of the pressure is now shown by labor market data: The Competence Center for Securing Skilled Labor (KOFA) puts the gap between July 2024 and June 2025 at 281,532 missing skilled workers; 72.3 percent of all open positions are in small and medium-sized enterprises (SMEs). Especially where part-time is already widespread—such as in retail—staff shortages meet planning with ever fewer buffers. In retail, according to the figures cited in the text, more than 100,000 positions are currently unfilled.

Why Part-time Is Both Necessary and Problematic for Many Companies

At the Osnabrück retailer Lengermann & Trieschmann (L&T), the tension between operational needs and individual working hours becomes real. Managing Director Mark Rauschen puts the workforce at 487 employees. Around 65 percent work part-time, nearly 80 percent are women; about a third work full-time. For the company, this mix is not a "nice-to-have" but part of the business model: Full-time staff ensure continuity and responsibility, part-time helps cover opening hours, seasonal peaks, and fluctuations in demand.

L&T is exemplary of an industry shaped by medium-sized businesses, employing many women, and competing strongly through service and experience offerings—even against online providers. Where sales, consulting, merchandise management, gastronomy, or leisure offerings intertwine, staff must not only "be there" but be present at the right time with the right qualifications. Part-time can achieve this—as long as tasks can be divided into small units and sufficient cover is available.

This is exactly where the problem begins, according to Rauschen: In specialized functions—such as IT or controlling—short-term changes in work scope are harder to absorb. When key people reduce their hours or change availabilities, the need for handovers, coordination effort, and dependencies increase. L&T tries to counteract this by distributing know-how, access, and authorizations among several people—through larger teams and interfaces in adjacent departments. However, this kind of "redundancy" is expensive and often hardly feasible for smaller companies.

The fact that part-time has now become a mass phenomenon in Germany makes the debate political: Across all industries, according to the figures mentioned in the text, around 40 percent of employees currently work part-time—a figure described as a historic high with an upward trend. The IAB provides context, also highlighting in a press release that the part-time rate has exceeded the 40 percent mark for the first time (IAB). In retail, the part-time share is over two-thirds according to the text; it is similarly high in care professions. At the same time, there are sectors—such as the automotive industry or skilled trades—that are well below the national average. The labor market is therefore not "uniform"—and this makes blanket solutions more difficult.

Where Labor Law Complicates Workforce Planning

For many companies, part-time is determined not only by the market and demographics but also by legal frameworks. Since 2001, the Part-Time and Fixed-Term Employment Act (TzBfG) requires employers to review part-time requests and justify any rejections. Oliver Stettes from the German Economic Institute (IW) places the origin in a different era: When the law was created, the aim was to increase employment, especially the labor force participation of women. In this logic, part-time was a door-opener to the labor market.

Today, the situation has reversed, argues Stettes: The skills shortage strengthens employees' bargaining power, while companies have less and less leeway to compensate for absences or reduced hours. Part-time is therefore no longer just a social policy instrument but a central factor in whether companies can even maintain their work volume.

Bridge part-time—i.e., the legally anchored right to temporarily reduce working hours and then return to the previous working hours—is particularly contentious from Stettes' perspective. This right of return is regulated in the TzBfG and explained by the Federal Ministry of Labor and Social Affairs (BMAS) in its information on bridge part-time. In practice, this means for companies: They must not only organize a reduction but also "plan for" the later return—including deployment planning, cover solutions, and budget. Stettes therefore calls for the abolition of bridge part-time.

Rauschen supports a restriction of the statutory part-time entitlement in principle but emphasizes a different point: He advocates focusing the entitlement more on "important occasions"—such as caring for relatives. At the same time, he links the debate to an infrastructural reality that speaks against full-time in many regions: If care is only available until the afternoon, longer working hours become an organizational risk. Rauschen therefore calls for childcare on weekdays until 8 p.m. and explicitly also on Saturdays.

In addition to part-time entitlements, working time law is coming into focus. The framework in Germany is strongly oriented toward daily limits: In principle, eight hours of work per working day are permitted; up to ten hours are possible under compensation rules. There is also a statutory minimum rest period of eleven hours between two working days. Details on the system of the Working Hours Act and the compensation periods are regularly summarized in labor law explanations—such as at Haufe. Critics see this as a model that ensures occupational safety but only partially reflects modern shift and life realities and is associated with documentation requirements.

Rauschen therefore calls for—according to the political announcement in the coalition agreement—a switch from a daily to a weekly maximum working time. The idea behind this is not "more work," but a different distribution: The total working time would remain the same but could be distributed more flexibly within the week—for example, longer days during peak times and shorter ones on other days. Stettes refers to IW evaluations, according to which such a change need not entail increased occupational safety risks. In addition, many part-time employees—according to the IW assessment cited in the text—would like to organize their working hours more independently; more flexibility could make it easier to increase hours without immediately colliding with everyday life and care responsibilities.

Why the Mittelstand Is Under Greater Pressure

For large companies, working time flexibility is often a matter of system: more personnel reserves, larger teams, specialized HR structures. For the Mittelstand, it quickly becomes a question of survival. Stettes describes that smaller companies have greater difficulty maintaining the necessary work volume. The reason is simple and at the same time crucial: When an experienced, hard-to-replace person reduces hours—permanently or temporarily—it is rarely possible to "redistribute" this in small units. Replacements are hard to find, and mini-hour models are unattractive as side jobs for many skilled workers.

This structural vulnerability meets a labor market that is further narrowing due to demographics. With the first baby boomers retiring, the number of new workers is falling; as a result, total working hours are lost to the economy, argues Stettes. Qualified immigration remains an important lever—the BMAS describes it as part of modern skills security—but according to Stettes, it alone is not enough to close the gap. When fewer people are available, the total number of hours worked becomes more decisive for companies' performance.

The consequence is not a simplistic "part-time versus full-time" dichotomy, but a sharper goal conflict: Germany benefits from the fact that part-time has increased labor force participation—especially among women. At the same time, in times of scarce skilled workers, the question shifts from "How do we enable employment?" to "How do we keep work volume and qualifications stable without losing compatibility?"

Three levers are emerging:

• a more precise design of part-time entitlements (especially where return rights greatly complicate planning)
• a significant expansion of care infrastructure as a prerequisite for voluntary increase in hours
• working time law that maintains protection standards but creates flexibility in distribution

For the Mittelstand, the question is whether flexibility becomes an opportunity—or the next hurdle in the skills shortage.