Institutional Structures of the Flexible Assignment of Personnel Between Enterprises. An Economic Comparison of Temporary Agency Work, Interim Management and Consulting**

Zusammenfassung

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Temporary Agency Work, Interim Management and Consulting are three versions of the flexible assignment of personnel between enterprises, which are - with regard to their basic economic structure - more or less similar, but which are organised under thoroughly different contractual and legal regulations in Germany and in three more or less differentiated segments of the market. The paper aims at comparing these forms of flexible personnel assignment under empirical and institutional aspects from an economic perspective.

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Institutional Structures of the Flexible Assignment of Personnel Between Enterprises. An Economic Comparison of Temporary Agency Work, Interim Management and Consulting**

1. Temporary agency work, interim management and consulting as related forms of the flexible assignment of personnel between enterprises

Temporary agency work, interim management and consulting are instruments with which it is possible to cover short-term manpower requirements and to outsource parts of the classical employer function simultaneously.1 These three instruments, used for outsourcing and improving flexibility2, are very similar with regard to their basic economic structure, but differ significantly in terms of their institutional design under German labour and social security law. These differences can be roughly described as follows for the prototypical use3 of these instruments:

For temporary agency work, clients act as borrowers and demand temporary rights of directive authority to the work capacity of people who are contractually employed by the temporary employment agency which acts as a lender. Thus there is a three-way relationship between the borrower (or client), the lender (temporary work agency) and the temporary agency worker (Purcell/Purcell/Tailby 2004). This relationship is comprehensively regulated by the German Law on Labour Leasing. Lender and borrower enter a labour leasing contract, which is a special of a contract of personnel service ("Dienstvertrag") which - according to German law - stipulates that the supplier owes the customer a specified service (but no guaranteed output or success). Between the temporary employment agency and the temporary agency worker an employment contract according to German Labour and Social security Law is placed. Although there is no contractual agreement between the temporary agency employees and the client firm where they are deployed, the client acquires the temporary right of directive authority over the temporary agency workers through the labour leasing contract.

Interim management has a basic structure that is a very similar to temporary agency work. The company's demand for management services is short-term and planned as being temporary right from the start, too. In contrast to consulting the assignment includes implementation of instruments, directive authority within the client's hierarchy and budget responsibility. In contrast to temporary agency work the interim manager does not sign an employment contract with th...

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