Newly founded firms and changes in employment relationships - how start-ups contribute to transformations in types of employment, organization of work and working schedules

Employment experiences fundamental changes. The most prominent example is the erosion of standard employment towards different work forms, which are summarized under the heading of “non-standard” employment relationships (e.g. part-time work, marginal and limited employment and temporary work). Beside changes in the structure of employment, one can also observe a rising individual responsibility for the organization of one’s own tasks as well as for the changes of the internal structures of the firm. These changes, however, do not affect all groups of employees comparably and little is known yet about their basic mechanisms, especially at the interface firm – employees.

Thus, the transformation in employment challenges employers and employees likewise. In this project, special attention is paid to newly-founded firms. They are supposed to be innovative, their entry into the market challenges incumbent firms. They are an essential part of the renovation of an economy, their long-term contribution to economic and technological progress is far from negligible. At the same time young establishments demand rather different types of employees (e.g. high-qualified and more flexible workers) than well established firms. So what is their particular contribution to the changes in the structure of employment? The present research project therefore asks,

• whether and how employment relationships differ between start-ups and incumbents
• which contribution start-ups make to the changes in employment and how important new types of labor relationships are in newly-founded firms and
• which possibilities and limitations occur in this field for the relevant policy makers.

Besides an analysis of the quality of work (e.g. volume and flexibility of employment relationships) on the establishment level, we also raise the question which distinguishing characteristics go along with an employment in a newly-founded establishment from the employees´ point of view. The project combines thereby existing results from labor market, entrepreneurship and socio-scientific research. On the one hand, the project is based on the analysis of representative data at the establishment- and individual-level coming from the Institute for Employment Research (IAB), amongst others a linked employer-employee data set, that combines employee data at the person-level from the Federal Employment Agency with establishment-level information from the IAB Establishment Panel. Thus, it allows for sophisticated analyses of different aspects of the changes in employment relationships.

On the other hand, important questions that cannot be answered with the available data, are investigated in sectoral and firm-level case studies. To this aim start-ups and incumbents in selected industries are examined with quantitative and qualitative methods, whereby both employers and employees are surveyed. The selected branches should stretch a preferably large variety regarding the relevance of the change in employment structures and the intensity of founding activity.

Scientific Workshop at the IAW, February 20-21, 2014:

New Firms and the Quality of Work – Working Conditions in the New Economy.
Employee and Employer Perspectives