According to the yet-to-be-published “Handwerkskompass 2026,” which was compiled by IW Consult on behalf of renovation specialist Isotec and reported on by “Welt am Sonntag,” craft businesses that pay higher salaries tend to be more productive, more appealing to specialized talent, and economically more successful.
The study surveyed over 600 tradespeople. The researchers describe a “productivity spiral”: paying higher wages facilitates the recruitment of qualified employees, increases the employer’s attractiveness, and accompanies higher productivity. Furthermore, especially successful companies frequently rely on bonus payments, digital tools, and standardized processes.
However, economists urge caution against drawing immediate conclusions from these results. Christian Dustmann, a labor market researcher at University College London, told the newspaper that he would not say that paying higher wages automatically increases productivity, asserting that causality “certainly doesn’t flow in that direction.” Instead, the findings of the “Handwerkskompass 2026” demonstrate that successful firms often combine high salaries with strong organizational structures, qualified employees, and efficient processes. They were typically able to afford these higher wages because they were already performing well.
Despite this nuance regarding causation, experts do not dismiss the positive effects of good compensation entirely. Productivity researcher Steffen Müller from the Leibniz Institute for Economic Research Halle (IWH) indicated that higher salaries can motivate workers. Those who are paid better than their counterparts elsewhere have more to lose and tend to identify more strongly with their employer. Crucially, well-paying companies can draw from a larger applicant pool, making it easier to acquire skilled specialists.
