Burdened by huge public debt, governments across Europe continue to pull back from welfare provision. With real wages being squeezed, that’s a problem for many employees across the continent. But could family businesses help to fill the gap left by governments?
In Italy, I know of many examples of family businesses that offer their workers more than just a salary and a pension.
Efforts to provide additional support have increased in the last few years, as the Italian state pulls back from funding education, health care and culture. I wonder whether this trend is more than just a coincidence.
A good example of this is Luxottica, the family-controlled eyewear company. The world’s biggest maker of sunglasses launched an innovative “welfare program” for its 8,000-plus Italian employees in 2009. Luxottica said the program was to “support the buying power” of its employees and families in difficult times. The company provides a host of extra benefits beyond the traditional incentives. These include medical services, transport, social services and education benefits.
But there are other examples as well:
- Brunello Cucinelli, the Umbrian luxury clothing company, split half of its profits with its workers in 2012. The company also invests in the restoration and preservation of Solomeo, the town in which it is located. And its eponymous owner makes various statements about the bigger role he wants his business to play in society. One of his stated aims is to “give business a meaning that goes beyond profit” and he speaks of “reinvesting to improve the lives of workers”.
- Coesia, the Bologna industrial holding company, created a code of ethics with a strong emphasis on the welfare of its employees. The various companies of Coesia play an active role in their local communities. They support groups that help those with disabilities, and provide local support in culture and education.
- Tod’s, the luxury shoe company, gave all its employees in Italy a bonus in 2012. This was to help them pay for medical and educational costs for their families, given the tough economic climate in Italy. Tod’s is also involved in the restoration of the Coliseum in Rome.
Of course, family businesses have not set out to replace government provision in these areas. But in difficult times, some of them are prepared to dig a bit deeper into their pockets to help their employees. They see it as part of their stakeholder role. What benefits their employees will benefit them as well. They grow successfully together.
Guido Corbetta, Professor of Strategic Management and Family Business, Bocconi University