Start-ups in Germany are robust despite inflation and interest rate hikes

Et is an unusual situation for the German start-up scene. For years things only went uphill for the founders. Money was cheap because of the low interest rates, and investors willingly pumped billions into the market. With interest rates rising, that’s over. Added to this is the subdued consumer mood due to the high inflation rates. Many startups have problems getting fresh capital, some have already had to lay off employees on a large scale. Not particularly easy times for young companies. How well can the German start-up sector navigate through the crisis?

The tenth German start-up monitor comes to the conclusion that German start-ups are robust despite the uncertainties. According to the study, the nearly 2,000 start-ups surveyed planned an average of nine new hires. The Federal Association of German Startups and the management consultants from PwC create the report once a year in cooperation with the University of Duisburg-Essen to analyze the situation in the industry. The planned new hires made it clear that “young companies also want to grow under the current conditions,” according to the authors of the study.

At the same time he does it skills shortage It is difficult for the start-ups to actually fill the vacancies. Finding suitable staff is described by 35 percent of the founders as a key challenge. In the previous year it was just under 27 percent. The lack of staff hits larger start-ups even harder: in companies with more than 50 employees, almost two-thirds complain about problems recruiting staff. Incidentally, the high need for personnel should not be due to the fact that the bosses work too little. On average, the founders work 55 hours a week, seven of which are at the weekend.

Issue of employee participation

As a measure against the shortage of skilled workers, the start-up association calls for more attractive regulations for employee participation. Employees receive shares in the company and share in the profits. “Employee participation is crucial for startups to attract top talent,” says Franziska Teubert, Managing Director of the startup association. The German regulations are not internationally competitive and need to be simplified.

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