Firms with Innovative Work Organisation Are More Successful
ResearchZEW Analysis on Employee Inclusion
By adopting innovative work organisation models, firms can combine social participation and economic success. Businesses which for the first time introduced innovative measures between 2020 and 2022 to create a more inclusive work environment achieved, on average, around 6.2% higher turnover and employed around 4.7% more staff than comparable firms. Such innovative measures include, for example, flexible working-life models for older employees, inclusive workplaces for people with disabilities, mentoring programmes promoting gender equality and internships for refugees as pathways to work. These are the recent findings of the Innovations in the Digital Working Environment (InDigAr) project, which ZEW has conducted in cooperation with the Technical University of Munich.
“Our findings show that an inclusive work organisation is not only socially significant, but that it is also linked to the economic success of firms. This relationship is particularly evident in firms that are introducing such measures for the first time,” says Linus Strecke, researcher at ZEW’s “Innovation and Industrial Dynamics” Research Unit.
“By actively involving different groups of employees, firms can tap into previously unused skills. It is crucial, though, to specifically integrate the diversity dimension into operational workflows and innovation processes,” adds Dr. Bastian Krieger, head of the junior research group “Co-Creation” in ZEW’s “Innovation and Industrial Dynamics” Unit.
Focus on older employees and migrants
Between 2020 and 2022, 19% of the firms surveyed introduced at least one inclusive measure into their work organisation. The most frequent measures, implemented by 9.3% of firms, were aimed at older workers. In second place were initiatives to integrate migrants and refugees (8.5% of companies). Measures for people with disabilities were introduced by 4.3% of firms, and those promoting gender equality by 3.1%. Firms that pursue their own research and development activities were more active in this regard: 22.9% introduced inclusive workplace innovations, compared with 16.8% of companies that do not engage in research and development.
Firm size is a decisive factor in the implementation of inclusive measures
During the period under study, the number of small and medium-sized enterprises that introduced inclusive measures for the first time was relatively high, i.e. they were catching up with large enterprises, many of which had already established such inclusion initiatives before 2020. When looking at ongoing implementation, however, a clear size effect is evident: Only 2.8% of small enterprises were continuously implementing new inclusion measures, whereas the proportion among large enterprises was as high as 14.4%. The findings suggest that limited financial and human resources are an obstacle preventing very small enterprises in particular from implementing these measures.
About the methodology
The analysis is based on data from the Mannheim Innovation Panel, a representative survey of German firms with at least five employees. It covers 1.692 companies, 89.7% of which were small and medium-sized enterprises. The data on newly introduced measures relate to the years 2020 to 2022, while data on earlier activities were collected retrospectively. To investigate the correlations with turnover and employment, the researchers used fixed-effects models and, with the aid of a statistical weighting procedure, created groups of enterprises that were as comparable as possible. Factors taken into account included innovation activities, available resources, corporate structure, sector and economic development prior to the study period.
