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

The skilled labor shortage is hitting Germany at a time when working time preferences are becoming more individual—and when many companies have long since optimized their duty rosters to the limit. Especially in the Mittelstand, two realities collide: On one side are high part-time rates, which enable labor force participation and work-life balance. On the other side, gaps arise in the actual available working hours—and additional planning pressure due to rules designed for a different labor market.

A recent analysis by the Competence Center for Securing Skilled Labor (KOFA) puts the skilled labor gap between July 2024 and June 2025 at 281,532 missing qualified workers. At the same time, according to KOFA, 72.3 percent of all open positions are in small and medium-sized enterprises (SMEs). This means that the personnel shortage is concentrated precisely where absences and reductions in hours are hardest to compensate for.

Why Part-time Becomes a Planning Issue for SMEs

A look at retail—an industry shaped by SMEs and traditionally operating with high part-time shares—shows what this conflict feels like in everyday life. At the Osnabrück-based retail company Lengermann & Trieschmann (L&T), which operates not only a fashion store but also gastronomy and leisure offerings and has opened a new sports house with an indoor surfing facility, CEO Mark Rauschen describes the dimension as follows: “We employ 487 staff.” Around 65 percent work part-time, nearly 80 percent of employees are women. A good third work full-time.

For L&T, part-time is not just a “problem,” but part of the business model: peak times, weekends, seasonal peaks, and the rhythm of different service areas can hardly be covered without flexible shifts. At the same time, the stability of operations—especially regarding opening hours, leadership tasks, and reliable responsibilities—depends heavily on full-time staff. Rauschen describes full-time employees as the backbone that creates continuity and planning reliability. For companies like L&T, it is less about headcount than about reliably available hours: Those who have many employees but too little contiguous working time often still feel bottlenecks immediately.

There is also an operational limit that is often overlooked in the debate: Part-time can often be organized more easily in sales with clear task packages than in specialized functions. Rauschen points out that it becomes a challenge when specialists—such as in IT or controlling—want to work more or less at short notice. L&T tries to cushion such dependencies with larger teams and to distribute know-how and access rights among several people. But especially in smaller companies, this redundancy is often lacking: If a key person reduces their hours, not only does a gap arise, but an organizational restructuring is required.

Labor market researcher Oliver Stettes from the German Economic Institute (IW) argues in the same direction: Larger companies can distribute work volume over more shoulders; smaller companies have significantly more difficulty maintaining their performance level. The risk is particularly high when experienced staff—who are difficult to replace due to their specific experience—permanently or temporarily reduce their working hours and suitable replacements are hardly available on the market. Part-time positions with very low hours are also often hard to fill, as they appear financially or professionally unattractive to many skilled workers.

A Structural Problem

In industries such as retail, the part-time rate is more than two-thirds; across the economy, it is just under 40 percent. While in other sectors—such as the automotive industry or skilled trades—part-time rates are significantly lower, retail and care combine several characteristics: high part-time, high proportion of women, high personnel needs at off-peak times. According to available data, there are also more than 100,000 open positions in retail. This makes the sector a magnifying glass for the question of how much flexibility a system allows—and how much rigid regulation it can still afford in times of scarce labor.

What Bridge Part-time and Working Time Law Mean in Practice

Legally, the debate did not start with the current shortage. The Part-Time and Fixed-Term Employment Act (TzBfG) has required employers since 2001 to review requests for reduced working hours; a rejection must be justified. Stettes points out that the rules were created at a time of high unemployment: More people were to be brought into employment, especially to increase the labor force participation of women.

Since the 2010s, the situation in the labor market has changed from the perspective of many companies. With increasing scarcity, employees’ bargaining position has strengthened; employers have more often accommodated working time requests. This has a socially desirable side: Part-time makes work-life balance easier—and helps many people to be able to work at all. At the same time, a problem arises that cannot be solved by good personnel management alone: When working hours decrease while large birth cohorts retire and fewer young people follow, every additional reduction in hours becomes more economically significant.

Bridge part-time is particularly controversial. It gives employees the right to temporarily reduce their working hours and then return to their original contractual working hours; according to the Federal Ministry of Labor and Social Affairs, this right applies in principle regardless of the specific reason, i.e., not only for childcare or care. For companies, the difficulty lies less in the temporary reduction itself than in the return guarantee: It forces companies to create an interim solution without being able to permanently adjust the job structure. Stettes therefore calls for bridge part-time to be “abolished quickly,” as the coordination effort increases further due to the return entitlement.

At the same time, the Working Hours Act is at the center of criticism. Currently, a daily limit applies: no more than eight hours on weekdays, plus at least eleven hours of rest between two working days. Rauschen considers this logic—especially in retail with long opening hours, weekend business, and highly fluctuating demand—to be too rigid. He calls for a shift from daily to weekly maximum working hours, as announced in the coalition agreement. Stettes refers to IW studies showing that a switch to a weekly perspective does not have to entail increased occupational safety risks: The total working time would remain the same, it could just be distributed differently over the week.

The core of this argument is practical for businesses: A weekly logic would not automatically allow “more work,” but it could allow work to be bundled when it arises—and compensated for in quieter phases. For employees, this could mean shaping working hours more autonomously. Stettes points out that this very planning reliability could be a lever for part-time employees to increase their hours—not out of compulsion, but because it fits better organizationally and privately.

Where Politics and Companies Demand More Flexibility

The demands from the Mittelstand do not aim to end part-time, but to adapt the rules to scarcity and life realities. Rauschen takes a nuanced position regarding the proposal to restrict the legal entitlement to part-time: He advocates focusing the entitlement more on “important occasions,” such as caring for a relative. At the same time, he emphasizes that more full-time work, in his view, is only achievable if the state provides the infrastructure that makes full-time work feasible in the first place: childcare on weekdays until 8 p.m.—explicitly also on Saturdays.

Stettes takes a broader perspective: Immigration could help, but will not close the gap alone. As the demographic wave further tightens the labor market, the question inevitably comes to the fore of how more work can be made financially and organizationally worthwhile—for example, through noticeably higher net incomes for overtime, lower tax burdens, and conditions that make longer working lives realistic.

In the end, there is no simple opposition between “part-time good” and “part-time bad.” Part-time has enabled employment and strengthened labor force participation—especially in industries and life phases where full-time often does not work. In a labor market with scarce skilled workers, however, what was previously easier to overlook becomes clearer: legal entitlements, return guarantees, and a rigid daily logic of working hours can become a brake for SMEs when they have to organize reliably available hours. The core political question is therefore not whether part-time should be abolished, but whether the regulatory framework still fits an economy that needs both more work-life balance and more working hours.