Employment Relations in SMEs

In Germany, 99.7% of all firms are SMEs. They employ more than 70% of the total workforce, provide roughly 82% of all vocational training places and account for 41% of total turnover. The distribution of SMEs between different sectors varies distinctly. Furthermore, wages rise as firm size increases; working hours, however, decline as firm size increases. Nonetheless, it would be misleading to conclude that working conditions in small and medium-sized enterprises are, in general, worse than they are in large firms. The coverage of collective bargaining and workers’ representation by works council rise with increasing firm size. In many firms, however, the social dialogue is effectively conducted via individual contracts, informal agreements or alternative forms of workers’ representation.