23/10/2017

Mittelstand

Fact 1: German SMEs prize their employees

One good indication that a company takes care of its people and takes a long term view of human resources is a high rate of interns: SMEs provide virtually 85 percent of all trainee posts in Germany, which means that they make a substantial contribution to ensuring the low level of unemployment among young people in Germany. But these companies also score points with employees thanks to their strong results in terms of employer certification and rankings, and in employee surveys. A comprehensive study by the Institute for Leadership and Human Resource Management of the University of St. Gallen on human resource management in German SMEs produced the following, positive findings:

Fact 2: German SMEs are family-minded

A healthy corporate culture also means taking employees’ commitments outside their jobs into account – especially challenging family situations. The SMEs realised this long ago and are continually extending their family-friendly policies. These include flexible working hours – as well as the possibility of working from home, or even taking sabbatical leave. Surprisingly enough, even during the severe economic crisis of 2009, these small and medium-sized businesses remained as family-friendly as ever and even stepped up this policy in many domains.

Fact 3: German SMEs are modern and cosmopolitan

It is also thanks to its successful SMEs that Germany enjoys a leading position among the world’s exporting nations. Even seemingly small companies with 50 to 100 employees often have customers, and receive orders from, all over the world. Many of the larger companies have production facilities and sales units abroad, but most of them keep their corporate production and functions, such as research, development and design, in Germany. On average, the exporting SMEs export 20 percent of what they produce. In terms of everyday work, this means that exciting and challenging tasks and all kinds of career opportunities await the employees – and, in many cases, business contacts all over the world.

Fact 4: German SMEs offer enticing career opportunities

In many companies, even the larger ones, the work atmosphere is very informal: the paths to managers are short and the employees are involved in decision-making and assume responsibilities. Very few have the feeling of being just a "small cog in a large wheel". German SMEs have flat hierarchies, a fact which is confirmed by surveys. And directly involving the employees has another positive effect – dedicated employees are able to prove what they’re worth quickly and soon get the chance of taking advantage of continuing education offers, or climbing up a rung on the career ladder.

Fact 5: German SMEs invest to create more jobs

Corporate investment fuels growth and innovation – and consequently employment in terms of the national economy. Investing billions of euros, German SMEs are the motor of the German economy. The timeline below shows that after the financial and economic crisis of 2009, recovery set in the very next year.

 Fact 6: The strongholds of German SMEs

Southern Germany boasts an exceptional number of "hidden champions". This means companies which rank among the top three on the global market or are European leaders. The "hidden" epithet stems from the fact that these companies are little known to the public, because instead of producing well-known everyday goods, they supply mainly specialised products and services to industry. It is estimated that Germany has some 1,300 hidden champions. Most of the global market leaders can be found in Germany’s south-west. Surprisingly, many of these companies are based outside major conurbations, as the regional world market leadership rankings show.

Fact 7: German SMEs do business for the long term

When turnover and profits are on the rise, SMEs traditionally place great value on building up financial "buffers" for leaner times. That enables them to budget for the long term and offer relatively secure jobs. Having a commonsense financial reserve helps them to withstand losses due to economic fluctuation, for example, or even to invest using their own capital. The good news is that among German SMEs, the proportion of equity in relation to total share capital has been rising for years. They even carried on doing sound business during the financial and economic crisis. The bottom line: these companies often show great business stability.

Fact 8: SMEs have a strong sense of social responsibility

It is estimated that German companies voluntarily put €11.2 billion into society every year. Here again, the great sense of responsibility and special mindset of the SMEs is evident: more than 63 percent of the companies with fewer than 50 employees and over 71 percent of the companies with 50-499 employees invest in projects for children and young people, cultural and social projects, or other projects of social interest. The percentage of socially responsible companies is admittedly much higher among the large-scale companies, but in proportion to their turnover, the SMEs put more money into social projects.
 
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