- Fostering innovation
- Support of SMEs
Target beneficiaries are SMEs (in line with the EU SME definition) based in Germany. Larger enterprises are excluded. In practice, many participating firms are micro enterprises with fewer than 10 employees.
The measure has no specific sectoral focus, but it focuses on four areas of action:
- Strategic human resource (HR) management: leadership, communication, participation, motivation, work organisation, working hours;
- Equal opportunities and diversity: work-life balance, demographics, inclusion, support of women;
- Health: organisational and individual resilience, physical and mental health; and
- Knowledge and competence: employee development, lifelong learning, and knowledge transfer.
The measure covers all regions of Germany, but with some differences in target groups. Generally, the advice agency for the first consultation must be based in the same Land as the beneficiary firm. In Leipzig, Lüneburg and the metropolitan region Rhein-Neckar, advice agencies can only support firms from these places. In the Länder of Brandenburg, Baden-Württemberg, North Rhine-Westphalia and Saxony-Anhalt, only firms with up to 10 employees can be supported. For larger firms, regional programmes are available.
The measure began as a pilot project, with ESF support, in the period between October 2012 and December 2014. It was then scaled up to the national level from the summer of 2015 until August 2020, again with ESF support. A special version with a focus on IT, known as UnternehmensWert: Mensch Plus, was introduced in 2017.
It is part of a package of measures subsumed under the term Qualified Professionals Initiative (Fachkräfte-Offensive), including a wider set of measures ranging from labour market analysis and communication of labour market issues, to practical assistance for enterprises in developing skills and recruiting.
The aims of the measure are:
- To support the inclusion of employees in sustainable learning and change processes within enterprises, in order to address the impacts of changes in the economy and identify needs for action in HR policy;
- To improve working conditions; and
- To promote growth and well-being.
These aims are translated into more operational objectives:
- To enable enterprises through initial and process consultations to identify objectives and measures and develop tailored solutions to ensure their implementation and sustainability;
- To make management familiar with sustainable HR policy approaches that truly focus on the needs of employees; and
- To enable firms to adequately react to future challenges related to changes in the world of work and production and demographic changes.
Ultimately, the measure should help SMEs retain skilled personnel and thus reinforce the position of SMEs within Germany’s economic system.
The support comes in three phases.
In the first phase, a firm visits an approved advice agency for a free review of the firm’s personnel needs and a check of its current situation with regard to the need for change in the four fields of action (see below), together with an assessment of eligibility for the second stage. This first consultation is free of charge and available for all SMEs interested.
To identify the companies eligible for the support provided in the second phase, the agency also checks that the following criteria are met:
- Enterprises established and with employees in Germany;
- With at least two years in existence;
- SMEs, according to the strict EU definition;
- With at least one full-time employee or equivalent; and
- With turnover of less than €50 million or an annual balance sheet total of less than €43 million.
In the second phase, the firm’s management and staff work in-house with an adviser chosen from an approved list. Together, the management and the adviser work out and then implement a strategy for personnel development in four different areas: leadership, equality and diversity, health and well-being, and knowledge and competences. These are the core areas of intervention of this programme. This should take up to six months.
In the final phase, three to six months after the completion of the second phase, the results of the process are reviewed and, if necessary, further advice inputs arranged.
In total, the process takes around nine to 12 months.
The initial session is provided free of charge. For the second phase, advice lasts for a maximum of 10 days and with a maximum of €1,000 per day cost. Firms with fewer than 10 people employed can have 80% of the cost covered by the measure. Those with 10 to 249 persons employed receive a refund of up to 50% of the advice costs.
- Regional funds
- National funds
- European funds
- European Funds (ESF)
The German Federal Ministry for Labour and Social Affairs coordinates the programme, in conjunction with ministries of the Länder and approved business advice organisations. The measure is administered by the Bundesverwaltungsamt (Federal Office of Administration).
Ministries of the Länder are involved in coordinating the programme, with the German Federal Ministry for Labour and Social Affairs and approved business advice organisations.
Approved business advice organisations delivering the support to companies.
An evaluation of the measure (Kowalczyk et al, 2015a; not publicly available) analyses the pilot phase of the programme (between 2012 and 2014).
The study found that between October 2012 und December 2014, 30 pilots were implemented in 36 regional advice agencies. 3,000 enterprises received the initial advice and around 95% of these proceeded to the next stage. Participants in the scheme included SMEs from all sectors and all the Länder of Germany. Half of the firms had between 10 and 49 employees and it was estimated that 100,000 employees were involved. Micro enterprises were underrepresented compared to their economic importance, possibly due to capacity constraints. In terms of sectors, the largest number of beneficiary firms in the pilot phase operated in services, health and social care, processing industries and trade.
About 2,000 professional advisers were trained in order to deliver the measure.
Around 95% of the companies who presented themselves for a first consultation free of charge also went on to phase two and three and received an in-depth process consultation as described further above.
The majority of firms consulted for the evaluation stated that they made use of the services in order to deal with challenges in the areas of work organisation, knowledge and competence management and acquisition and retention of skilled personnel. In comparison, firms showed a far lower expectation of their participation in consultation to make it easier for them to hire new skilled personnel. This is problematic since seven out of 10 enterprises participating had had difficulties finding qualified personnel. It also suggests that any effects of the measure in terms of job creation may only occur in the longer term, once modern procedures and organisational structures have fully been internalised by firms.
In terms of the areas of action offered by the measure, ‘HR management’ and ‘knowledge and competence’ were used more often than ‘health’ and ‘equal opportunities and diversity’. This may have been the case because ‘HR management’ can be regarded as essential and instrumental to delivering results in the other areas.
Overall, beneficiary firms approached for the evaluation were satisfied with the consulting services received (94% stated that they had fully met their expectations).
Another key finding of the study was that the expert consultations provided triggered further changes in participating firms and thus led to sustainable developments in procedures.
In terms of cost effectiveness, the study found little ‘windfall effect’ in that very few firms would have made use of the consulting services without the public subsidy.
Employment enhancement is an explicit goal of the measure. One of the key success factors of the measure is that it takes a holistic approach covering job security and retention, attractive working conditions, health and safety, diversity and inclusion. While job creation is also relevant, the measure reflects the situation in Germany where unemployment is low, and the acquisition and retention of talent by firms is a more important policy issue than the creation of new jobs (Eurofound, 2018).
The structuring of support around four areas of intervention among which beneficiaries could choose is a key success factor in ensuring maximum effectiveness through a tailored approach.
Another success factor is that the extensive support triggered long-term changes in participating firms that oftentimes went on to take up further consultation at their own cost, suggesting the change initiated by the measure is sustainable.
One weakness is some degree of windfall effect (firms using the money to carry out consultations they had planned anyway), which could derive from a rather generous co-funding rate (Kowalczyk et al, 2015b).
Also, the measure is well-advertised but relies on SMEs proactively approaching business advice agencies and asking for a first consultation.
According to the programme manager, a challenge relating to this type of measures is that it is difficult to reach all SMEs, in particular in rural and remote regions where the business density is low (Eurofound, 2018).