Vienna, Austria - Family businesses often feel a special obligation towards their long-time employees in particular. In large corporations, head office's demands for a reduction in headcount must be unconditionally met, whereas owner-managed companies tend to have more of a personal relationship between the top management and the staff.
"I have just had the most difficult conversation of my life," confides "Stefan", a CEO who has led his parents' business for many years. "I have to reduce the working hours of a longtime, loyal employee, because his department is getting less and less business. This was very hard for me, because he always worked well, has done no wrong and is very loyal to our company."
Many people feel that the owners of companies earn very high salaries, work only to optimize short-term profits, drive the biggest company cars and in general see their employees as an unwelcome but necessary expense.
"For the first few years, the total opposite was true," Stefan says. "There was a lot to do and I had to delegate a lot to my employees from the very beginning so as not to work myself to death. To tell the truth, during the first years I had the lowest income of anyone, because the company simply did not make enough profit."
A young assistant costs the company at least 30,000 euros per year, including ancillary wage costs, while a good salesperson can easily cost up to 100,000 euros. These salaries must be disbursed before management can be paid.
"Employee expectations are high – they expect a salary raise every year. But if we are not gaining customers and we are under pressure to cut prices, it is just not possible to pay more money. At the same time, as the owner of the company I bear the full risk, and try to take the burden off my employees by making strategic decisions."
Family businesses often feel a special obligation towards their long-time employees in particular. In large corporations, head office's demands for a reduction in headcount must be unconditionally met, whereas owner-managed companies tend to have more of a personal relationship between the top management and the staff.
Many people dream of starting and building their own business, before selling it to a global group for a large sum of money. However, for most entrepreneurs the reality is different. Hardly anybody talks about the teething troubles, the constant economic pressure and the envy from friends and associates when you finally make it big.
"I wish things could have been different," Stefan concludes. "But it was important for me to accept responsibility myself and work with the employee to find a mutually-acceptable solution. The company's economic situation left me with no other choice – after all, I have to think of the other employees too. If I can't implement changes in response to the lower turnover, we will have to close the company sooner or later. And nobody wants that."
Conrad Pramböck is the Head of Compensation Consulting at Pedersen & Partners. Based in Vienna, Austria, he is responsible for consulting companies on all aspects of compensation, including providing companies with up-to-date market information on salary ranges and design of bonus systems across all industries and geographies. Prior to joining the firm, Mr. Pramböck held several senior positions in international consultancy firms. He started his career with a German Consultancy firm working in management consulting and later in the Compensation Consulting business unit based in Austria. For the following seven years he worked with one of the top Austrian Executive Search firms as the Head of Compensation Consulting. He was responsible for all international compensation consulting activities and developed and maintained an international compensation database in 40 countries.
Mr. Pramböck holds a PhD in Law from the University of Vienna. In addition to his native German, he speaks fluent English and has basic knowledge of French and Spanish.