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Capital or ballast? Personnel policies in phases of economic weakness

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  • Meinhard Knoche

Abstract

In the spring of this year the Ifo Institute conducted a survey of 1,100 businesses of all industries and sizes to determine what strategies German enterprises employed in recent years in a weak economic phase, what experience they had with their strategies and how they assess the suitability of these strategies for the future. The results of the survey show that the positive appraisals of growth-oriented measures clearly increased. The reduction of personnel costs was a secondary key strategy for improving competitiveness. With regard to the question of how personnel costs can be reduced, the survey results indicate a change in strategy. In the past dismissing employees for reasons of redundancy had a dominant position; in future staff reductions via attrition and non-replacement will be preferred. Also lowering personnel costs without staff reduction will gain in importance, with the lengthening of the work weak with no extra compensation considered to be the most suitable measure. About 90% of the surveyed businesses criticised the legal general conditions that limit the scope for such measures.

Suggested Citation

  • Meinhard Knoche, 2004. "Capital or ballast? Personnel policies in phases of economic weakness," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 57(16), pages 12-20, August.
    • Handle: RePEc:ces:ifosdt:v:57:y:2004:i:16:p:12-20
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    File URL: https://www.ifo.de/DocDL/ifosd_2004_16_2.pdf
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    Cited by:

    1. Meinhard Knoche, 2007. "German enterprises in the globalisation process - personnel as the success factor," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 60(06), pages 17-28, March.
    2. Meinhard Knoche, 2005. "Personnel policies as creator and forerunner of innovation processes," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 58(01), pages 14-22, January.

    More about this item

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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