A well conceived staff profit-sharing scheme can have some very positive effects at various levels. Staff profit-sharing schemes contribute very considerably to the strengthening of competitiveness, since they not only bring with them advantages from the standpoint of the staffing economy but also represent an excellent tool for medium and long-term corporate finance.

General entrepreneurial advantages

• Cost benefits as against the participation of institutional investors or a private placement
• State support for staff profit-sharing schemes
• Reinforcement of equity capital and increase in the equity capital quota in comparison with the liabilities and the balance-sheet total
• No provision of collateral; saving of credit security resources and avoiding of the need for suretyship
• Rise in financial standing of the company and improvement in creditworthiness and the rating under Basel II
• Optimal use of competition from the banks in terms of interest, and attainment of interest conditions that are significantly more favourable in instances of future object financing, through the increased deployment of equity capital
• Achievement of a lever effect (mostly tripling) for the potential total financial resources of the company
• Increase in independence from banks and VC companies
• Increase in financial strength and liquidity, and thus very considerable improvement in the competition position and market situation in comparison with the competition
• Achievement of very considerable cost advantages as against classic bank loans
• Safeguarding of entrepreneurial independence and flexibility
  
  

Staffing economy benefits

• More positive commitment and greater identification by the staff with their own company
• Enhancement of staff motivation
• Less time lost due to sickness
• Rise in productivity
• Rise in the staff’s innovation capabilities
• Loyalty of qualified staff
• Smaller volume of staff turnover
• It becomes easier to acquire highly qualified staff