Of the 203 Bitkom Of the tech startups surveyed, 38 percent said they allow employees to participate in the company's success. A full 48 percent could imagine such a model for the future. Just six percent of startups reject employee participation altogether.
Currently, startups primarily offer employee participation in the form of virtual shares (33 percent). Only six percent use share options, and three percent use real shares. In startups with employee participation, this primarily benefits executives (37 percent) or selected other employees (36 percent). In approximately one in four startups (27 percent), all employees receive a share of the pie.
The most important motivation for employee profit sharing is the desire to further motivate the workforce (87 percent). Three-quarters (77 percent) of respondents want to retain employees long-term, and around two-thirds (63 percent) can use it to attract staff whose salary expectations would otherwise be unattainable. Half of the startups (49 percent) also see it as a moral and social duty to allow employees to participate in the company's success. Around one-third (35 percent) recognize the advantage that this can keep ongoing personnel costs lower. One in five startups (20 percent) is thus fulfilling a wish of their investors. And nine percent consider it necessary to be able to recruit foreign specialists.
Hurdles to employee participation: too bureaucratic and complicated
Startups that have so far refrained from employee participation have a variety of reasons. Thirty percent complain about the bureaucratic burden, 27 percent about the complicated legal situation, and 26 percent about the low tax attractiveness in Germany. 22 percent say that employees prefer traditional salary payments, and 18 percent do not want to dilute the founders' shares. Another eight percent are afraid that employee participation will slow down decision-making processes. Five percent state that their investors oppose this. A quarter (25 percent) have not yet addressed the topic at all.
Bitkom President Ralf Wintergerst says:
"Employees participating in the startup's financial success is crucial, especially for young and smaller companies, to attract and retain good people. Employee participation is important for the success of the German startup ecosystem."
