hkp/// group Workforce Insights Snippets
Part 2: Top executive and non-tariff employee quotas in Germany
New year, new collective bargaining rounds and salary negotiations: The new year in particular always sees the media reporting extensively on collective bargaining and salary adjustments for employees covered by collective agreements (tariff), who, in terms of manufacturing at least, make up the largest group of employees within German companies. Non-tariff employees i.e. those who are neither covered by the scope of a collective agreement and are not top executives/management board members, are far less often the center of attention, even though they can represent a relatively sizable proportion of a workforce, depending on the company’s business model and sector.
As part of the hkp// group Strategic Compensation Management Survey 2021, the hkp// group has analyzed the non-tariff quotas of large and medium-sized companies with headquarters in Germany. According to the survey, an average of approx. 18% of employees in manufacturing companies are outside of the collective agreement pay scale. This figure can vary significantly depending on the organizational or functional area concerned.
While the median non-tariff quota in manufacturing stands at around 5%, areas with a high proportion of academic expert roles, such as legal & compliance or corporate development, have non-tariff quotas of around 50 to 60%. “Corporate headquarters typically have the highest non-tariff quotas, whereas more operational areas, such as shared service centers, tend to have much lower ones. Reason for this is the qualification structure, i.e. the ratio of expert tasks to standard administrative and operational processes,” explains Verena Vandervelt, Senior Director at hkp// group.
The type of industry concerned also has a significant influence. If only manufacturing companies are taken into account, for example if we take a look at the automotive & engineering industry compared to the chemicals & pharmaceuticals industry, the non-tariff quotas are pretty similar; in this case between 10 and 20%. If, on the other hand, the focus is on retail and service sectors, the non-tariff quotas are significantly lower than the averages found in manufacturing. The opposite trend can be seen with banks and financial service providers, according to Sabrina Müsel, Senior Manager of the hkp/// group, “Among financial institutions and service providers in Germany, we see non-tariff quotas that range between 40 and 70%,” explains the compensation expert.
If only the levels directly below the management board are considered here, i.e. executives in top and middle management positions, this group makes up less than one percent of the total German workforce, across all organizational and functional areas.
The hkp/// group Strategic Compensation Management Survey not only sheds light on the quotas and absolute FTE figures for the employee groups discussed here, but, for the first time, also combines this structural information with the corresponding compensation data regarding non-tariff employees and company performance. If you are interested in finding out more about these topics, please don’t hesitate to contact us.
The hkp/// group Workforce & Compensation Insights are based on evaluations within the framework of the hkp/// group Strategic Compensation Management Survey. This provides unique insights into compensation, workforce and organizational structures and the associated costs. The survey covers three areas that are essential for operational and strategic positioning and planning: Compensation, Performance and Organization. Learn more here.
Workforce Insights published to date:
- Part 1: Large and medium-sized German businesses: Internationalization and location of top executives
- Part 2: Top executive and non-tariff employee quotas in Germany