Press Release No. 71/2015 IG Metall Calls for More Collective Bargaining Agreements at Software Development Service Providers

Munich – IG Metall has spoken out against the increasing outsourcing of IT and development services (EDL) for cost reasons. “We say yes to digitalization when it means democratization. But we say a resounding ‘no’ if Work 4.0 means exploitation,” said Christiane Benner, Second Chair of IG Metall, at the 7th Engineering and IT Conference organized by the Hans Böckler Foundation and IG Metall on Friday in Munich. The union leader accused employers’ associations of seeking to revive the dinosaurs of the working world through unrestricted flexibilization and the abolition of the eight-hour workday. A modern working world, she argued, requires strong worker participation to shape working conditions in the context of the digitalization of industrial work in both direct and indirect sectors.

According to this year’s IG Metall works council survey, one in five companies outsources tasks in the areas of research, development, and engineering. As company size increases, so does the outsourcing of work to cut costs. In 73 percent of outsourcing cases, working conditions and pay for employees at contract firms have predominantly worsened. IG Metall has therefore established a network in the EDL sector to support employees in forming works councils. “High quality and low cost—they don’t go together. We need more collective bargaining agreements with IT and development service providers to put an end to wage dumping within the industry,” said Benner.

IG Metall cites a study by the Hans Böckler Foundation on the prevalence of development service providers. According to the study, the importance of these companies in participating in industrial innovation processes is growing rapidly. Between 2010 and 2014 alone, the number of employees at the 15 largest engineering service providers doubled, and the other companies surveyed also showed enormous growth in employment. Currently, 94,000 people in Germany work at 76 engineering service providers, which are increasingly expanding internationally. According to the study, the portfolio of engineering services is being significantly expanded to include IT services and staffing services due to the digitalization of products and processes. By far the main customers of IT and development service providers are end manufacturers and suppliers in the automotive industry. However, these service providers have also gained importance in the aerospace and rail industries.

Note to editors:
Further information on the 7th Engineering and IT Conference organized by the Hans Böckler Foundation and IG Metall can be found at /vorstand/en/presse and at https://www.igmetall.de/7enginit