Work-Life Balance

A Startup Revolution of a Different Kind

  • Why it matters

    Why it matters

    In Berlin, Germany’s startup capital, young firms are being forced to adapt to employees’ demands for a better work-life-balance.

  • Facts

    Facts

    • The average German startup founder is 36 years old, while most employees are aged between 25 and 34 years, according to a recent study.
    • A PwC study found that 75 percent of founders rely on their contacts’ recommendations for new hires.
    • A 2015 study by the Fraunhofer Institute showed that German students are looking for secure jobs, low competition and stable projects in terms of their future employment.
  • Audio

    Audio

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albrecht
Daycare during the day job: . Albrecht von Sonntag, founder and managing director of the comparison portal idealo, in the company's day care center. Source: Werner Schuering for Wirtschaftswoche

In an attempt to bring about innovation and more creativity, traditional firms like German industrial conglomerate Siemens or engineering giant ThyssenKrupp used to look to Silicon Valley. German firms tried to imitate the innovation powerhouse, creating digital labs and having brainstorming days to bring in new talent and foster fresh ideas.

But now it seems that the reverse is happening: Startups are longing for some of big businesses’ hallmarks.

Startup employees are more than ever looking for flexible and shorter working hours and security, while founders want better recruiting.

In more traditional companies, part-time work, sabbaticals and company kindergartens are much more common now while trade unions watch over the 40-hour work week and managers’ bonuses are tied to their teams taking all their vacation days.

But does this cocktail of work-life-balance-friendly ideas suit startups? Do part-time work and parental leave foster innovation, or does too much comfort hamper the drive toward new ideas?

More and more new companies are losing employees because creative chaos didn’t result in genius, just headaches. And it is starting to feel as though that 24/7 digital drive has ebbed.

Albrecht von Sonntag, founder of the German website, idealo, understands these concerns. With two co-founders and €150,000 in seed money, he built one of Germany’s largest price comparison websites, with about 10 million monthly users today. In 2006, the founders sold 75 percent of the company to media company Axel Springer.

“Everyone working with a startup during its growth phase has to know that there will be times when they can’t go home on time.”

Franziska von Hardenberg, Founder, Bloomy Days

Even though Mr. von Sonntag has stayed on as managing partner, he now works part-time. As a father of three, he values family time.

And Mr. von Sonntag isn’t alone in this concern.

The Startup Monitor 2016 survey showed that the average German founder is 36 years of age and that most of their employees are aged between 25 and 34 years old. That’s the age most people are not only worrying about their career, but also have their first child – the median age of first-time mothers in Germany is around 30.

A 2015 study by the Fraunhofer Institute revealed that German students are looking for secure jobs, low competition and stable project partners in terms of their future employment.

Georg Räth, founder of German start-up news portal, Gründerszene – Startup Scene in English – recently put it like this in an article on his site: Work hard, play hard. That just isn’t attractive anymore. If employees sit in the office for 40 hours or more, they haven’t necessarily spent the time working effectively, he argued.

Other startups are catching on.

After his staff suggested it, Mr. von Sonntag decided to fund an in-house kindergarten. He says the kindergarten will make the company function more like a “traditional extended family.” Of course, it is not just to the advantage of staff with children. It also makes idealo a more attractive place to work.

“Everyone working with a startup during its growth phase has to know that there will be times when they can’t go home on time,” said Franziska von Hardenberg, founder of Bloomy Days, an online flower retailer in Berlin.

She describes Bloomy Days as her baby, now five years old. But when Ms. von Hardenberg had a real baby 17 months ago, she realized how hard it was to spend long nights at her desk, while her toddler was at home. She has also had staff with new babies. One announced the intention to take two years of parental leave. Ms. von Hardenberg says she is happy for her colleagues and she will keep the position open until they are ready to return. But, as she also says: “Two years! We’re not Siemens. For us, two years may as well be 100.”

She is well aware new parents can’t really stay at their desks until the early evening. On the other hand she knows that a relatively new business such as her own can be unpredictable. To try and resolve the differences, Ms. von Hardenberg wanted to open a kindergarten at the office too. But just a little research indicated the day care center would need a lot of work – a new kitchen, new flooring, new toilets and a budget of up to €1 million. All of which was unfeasible for a company that’s only five years old and has 280 employees.

According to a study by consultancy firm PwC, around three-quarters of startup founders use private channels for recruitment.

Kai Matthiesen won’t believe the hype; the chief executive of management consultancy Metaplan said many new startups are trying to become more attractive to employees by simply copying the companies that came before them.

“What we need is flexibility instead of imitation,” Mr. Matthiesen said. “Startups need to forge their own paths, to find the things that fit the needs of their staff and the demands of their businesses.”

Where startups could learn from old school companies though, is in the field of human resources.

Startups may end up with employees who’ve been there from the beginning and who get set in their ways. A lot of their employees are likely to be friends of friends, possibly even those without the right qualifications. On the other side of the equation, international corporations bank on diversity in age, nationality and gender when hiring, not to mention merit.

According to a study by consultancy firm PwC, around three-quarters of startup founders use private channels for recruitment, and often select new workers themselves. As a result, their teams are often very homogenous.

That’s not good for innovation, Spanish researchers Xavier Molina-Morales and Teresa Martinez- Fernández discovered. In their 2009 article in a journal of management  – Too Much Love in the Neighborhood Can Hurt: How an Excess of Intensity and Trust in Relationships May Produce Negative Effects on Firms – they showed that teams that get along too well, lost the ability to find new members with the ability to think outside the box.

That’s why some founders have changed the ways they recruit. Take Felix Anthonj for example. his Berlin-based startup, Flexperto, specializes in helping the sales and service industry digitize. So Mr. Anthonj decided to focus on recruiting staff from big corporations or out of the IT world, right from the beginning.

“They know how company politics work,” he said, which is a plus for a startup cooperating with big business.

 

A version of this article originally appeared in Handelsblatt’s sister publication, WirtschaftsWoche. To contact the author: christine.weissenborn@wiwo.de

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