When asked directly about the impact of the 2021 measures on labor stability in Spain, Fedea associate researcher \u00a0Florentino Felgueroso\u00a0 concludes that the reform is “still very young,” and the observed effects “are still minimal.” He emphasizes that a more thorough evaluation of the new hiring framework is necessary, especially during crisis situations. In the short term, he claims, “we aren’t seeing that people are working longer than before.” He argues that only “temporary jobs have been replaced by permanent ones to a limited extent, the periods of inactivity for those with discontinuous permanent contracts have increased, and we have redefined how employment termination occurs, with a significant rise in voluntary resignations and terminations during trial periods.” Felgueroso believes that the Spanish labor market has reached a floor in the stability of contractual relationships. “The temporary employment rate has stabilized and will remain so for the coming years,” he predicts. Whether it will converge with the European average remains uncertain, as does whether the decline is solely attributable to labor reform or also stems from a post-pandemic change in human resource management.<\/p>\n
According to \u00a0Raymond Torres\u00a0, Director of Economic Outlook at \u00a0Funcas\u00a0, there indeed has been a noteworthy change coinciding with the reform, but it is also influenced by factors like economic growth post-pandemic and demographic shifts. “Companies aren’t downsizing employment as they used to and are now inclined to stabilize labor relations,\u201d he states. Torres even speaks of a change in the mindset of employers, translating into what he considers “actual job creation” rather than mere statistical adjustments. Nevertheless, he concurs that there exists “a residual level of temporary employment tied to the structure of the productive fabric and the public sector, where reductions have been minimal compared to the private sector.” His outlook for the upcoming years suggests that the temporary employment rate will stagnate in a context of moderate economic growth, declaring, “A cruising speed has been attained concerning employment quality.”<\/p>\n
From the government\u2019s perspective, the \u00a0Ministries of Labor and Social Security\u00a0 explain in their monthly evaluations that temporary employment rates are stabilizing following the significant initial reduction caused by the transition from temporary to categorically indefinite contracts in statistics. Nevertheless, the government has yet to conduct a thorough analysis on the impact of the \u00a02021 reform\u00a0. At the end of April, Deputy Prime Minister and Minister of Labor \u00a0Yolanda D\u00edaz\u00a0 announced the formation of a committee of experts to assess how the changes in hiring have affected temporary employment, a condition imposed by \u00a0Brussels\u00a0 in exchange for the substantial recovery funds. Although the government committed to present the evaluation outcomes in January 2025, D\u00edaz unilaterally extended the deadline by another year.<\/p>\n
In the meantime, the \u00a0Independent Authority for Fiscal Responsibility (AIReF)\u00a0 recently concluded that the latest labor market reforms have had “positive effects,” albeit of “moderate magnitude.” In one of the technical documents supporting the Opinion on the Long-Term Sustainability of Public Administrations, the watchdog points out that the policies “have improved overall placement and stability and have partially contributed to reduced segmentation, aligning with the fall in temporary employment and the increased presence of indefinite contracts.” Nonetheless, it warns that “the results should be interpreted cautiously, as they are average effects measured over a limited timeframe, conditioned by simultaneous shocks.” It asserts that “a reevaluation of these conclusions will be necessary as new data comes in to verify whether the observed effects consolidate or moderate over time.”<\/p>\n
PUBLIC BURDEN<\/h2>\n
Pending more comprehensive analyses on the consequences of the labor reform for job quality, analysts unanimously point to the public sector as the major burden of temporary employment. In fact, if it weren’t for the outdated temporary employment rates within various public administration domains, Spain’s standing in European comparisons would be considerably improved, presenting a rate closer to \u00a012%\u00a0, near the EU average if calculated solely for the private sector. Meanwhile, the public sector remains stagnant above \u00a028%\u00a0, a figure that embarrasses the country in Brussels but which the government continues to neglect despite repeated admonitions from community authorities.<\/p>\n This summer, the \u00a0European Commission\u00a0 froze over \u00a0620 million euros\u00a0 of the \u00a0Recovery Plan\u00a0 funds allocated to Spain, primarily due to excessive labor temporariness in the public sector. To release that money, the government committed to adopting measures before the end of the year. The \u00a0Ministry of Public Function\u00a0 is currently drafting a plan to limit temporary hiring practices, especially in \u00a0Education, Health, and Justice\u00a0, sectors where temporariness is exceedingly high, establish a new early warning system, and introduce a punitive framework to penalize non-compliant administrations. However, this plan has yet to be implemented. Meanwhile, the General Advocate of the \u00a0Court of Justice of the European Union (CJEU)\u00a0, \u00a0Rimvydas Norkus\u00a0, has issued an opinion stating that Spain lacks effective measures to adequately penalize the abuse of successive temporary contracts in the public sector.<\/p>\n Given the public administration\u2019s resistance to decisively tackle temporariness, Spain seems destined to lead labor instability rates in the European context. The pathway towards convergence is long and may be obstructed if various governments continue to procrastinate on substantial contractual reform in the public sector, despite the private sector’s efforts. Recently, \u00a0Andreu Crua\u00f1as\u00a0, president of the \u00a0Temporary Employment and Recruitment Agencies\u00a0 employers’ association, expressed this sentiment in an interview, underscoring the \u00a0ETT’s\u00a0 role as a “safe haven for legal security” for companies recruiting workers amidst the new labor framework\u2019s restrictions.<\/p>\n The reform initiated by the government at the end of \u00a02021\u00a0 appeared to directly challenge the core of temporary employment agencies’ operations by severely restricting temporary hiring options. Nevertheless, the sector adapted to the new landscape, as evidenced by positive growth figures from leading recruitment agencies in Spain. Top executives from firms like \u00a0Adecco, Randstad, and Manpower\u00a0 have confirmed that although the labor reform posed significant challenges at implementation and stirred legal uncertainties, it has ultimately driven a comprehensive model shift in talent management, enabling these companies to leverage it effectively.<\/p>\n \u201cThe reform limited temporary hiring but allowed ETTs to contract under discontinuous permanent terms,\u201d Crua\u00f1as recalls, asserting that these changes have boosted their operations, as “companies seek legal security and flexibility in the face of talent shortages.” As the sector’s leading representative, he asserts, “permanent roles should have indefinite contracts while temporary positions need flexible arrangements,” underscoring the need for such distinctions to enhance market stability.<\/p>\n This focus on transformation is also one of the main pursuits of the \u00a0Labor and Social Security Inspection\u00a0, which last year transitioned about \u00a0170,000\u00a0 temporary and discontinuous permanent contracts into indefinite ones, a \u00a023%\u00a0 increase from 2023. Initiated in \u00a02018\u00a0, the Ministry’s control strategy has intensified over the years, yielding substantial results annually, according to official reports. The new \u00a0Strategic Plan 2025-2027\u00a0 continues to pursue the eradication of fraud in temporary hiring as a core priority. As reported by \u00a0Yolanda D\u00edaz\u00a0 during the September presentation, by summer, \u00a0ITSS\u00a0 had converted \u00a026,000\u00a0 temporary contracts and \u00a033,000\u00a0 discontinuous permanent contracts into indefinite ones.<\/p>\n![\"\"](\"https:\/\/teknomers.com\/en\/wp-content\/uploads\/2025\/10\/1760914866_920_Job-stability-myth-or-reality-Temporary-employment-has-hit-rock.jpg\"\/)
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