Family Firms Employing More and More People in Germany and Abroad

The 500 biggest family firms in Germany have a substantial stake in the German economy. The number of people employed by these companies both in Germany and worldwide has increased in the years between 2006 and 2015. These are the findings of a recent study entitled "The Economic Importance of Family Enterprises" which is carried out regularly by the Centre for European Economic Research (ZEW), Mannheim, and the University of Mannheim's Institute for SME Research (Institut für Mittelstandsforschung, ifm) on behalf of the Foundation for Family Businesses in Germany and Europe.

The role of family firms in the economy has been a recurring topic of economic and political debate. Investigations carried out as part of the series of studies by ZEW and ifm offer an overview of corporate structure in Germany and of the features particular to family firms. The private sector for instance is defined by family firms, with more than 90 per cent of businesses run by families. The average family firm is a small company with less than ten employees. These companies nonetheless account for more than half of all private sector employees and revenue.

Between 2006 and 2014, the domestic employment figures for the 500 largest family firms in Germany increased from 2.67 million to 3.17 million employees. This corresponds to around ten per cent of total domestic employment in 2014 and an increase of 19 per cent. By comparison, the total number of employees liable to social security contributions in Germany only rose by 13 per cent over the same period. The 27 DAX-listed companies – the 30 DAX-listed companies minus the three family firms listed on the DAX – recorded a mere 1.5 per cent growth in employment between 2006 and 2014. The 500 largest family firms are also creating even more new jobs abroad than they are domestically. The study shows that the worldwide employment for the Top 500 family firms grew by 28 per cent between 2006 and 2015 – much higher than domestic employment alone.