socialnet - Das Netz für die Sozialwirtschaft

Country profile Austria: Social Policy, Social Economy and Social Work

Ass.Prof. Dr. Astrid Pennerstorfer, Brigitta Zierer

Publication date 2018-10-12

English version, translated from German version by Claudia Mehlmann


  1. 1 Principles of the Austrian Welfare State
  2. 2 Overview of the Austrian Social Economy
  3. 3 Social work in Austria
  4. 4 Current developments and challenges for employees and managers in social economy organizations
  5. 5 Effects of demographic and technological change
  6. 6 Results
  7. 7 Literature

This article provides an overview of current framework conditions, developments and challenges in social policy, social economy and social work in Austria.

1 Principles of the Austrian Welfare State

Austria generated a gross domestic product of almost € 370 billion in 2017 [1]. With a population of 8.7 million in 2017, GDP per capita amounted to € 42.000 (2017) [2]. Compared to the EU Austria ranks sixth behind Luxembourg, Ireland, Denmark, Sweden and the Netherlands.

By international standards, Austria has a very generous welfare state. In 2015, Austria recorded social expenditure of nearly €11.900 per inhabitant [3] and thus had the sixth-highest spending compared with other EU countries behind Luxembourg, Denmark, Sweden, the Netherlands and Finland. Measured in purchasing power parities, Austria recorded even the third highest value on social spending per capita. The social rate amounted to 29.8 % of Austrian GDP in 2014 and 2015. This puts Austria above the EU-28 average of 28.6 % (2014 value). The sum of Austrian social expenditure in 2015 amounted to nearly € 103 billion, the highest since 1995.

The majority of social expenditure is spent on old age and survivors (49 % of total social expenditure), followed by health care/sickness and disability (32 %), and children and families (9 %). The areas of unemployment (5 %) and housing and social exclusion (3 %) are thus among the financially less significant areas of expenditure in the Austrian social system (BMASK, 2016). In the EU comparison, the expenditure ratios show a comparatively higher weighting in the areas of old age and survivors, children and families as well as unemployment. Comparatively low expenditure is provided for the areas of housing and social exclusion as well as health care/illness and disability.

Cash benefits predominate in the Austrian social system, with nearly 69 % of all benefits paid in 2015, which is above the EU-28 average of 65 % (2014 value). However, the ratio between cash and in-kind benefits varies considerably between the single functional areas. In the areas of sickness/​health care (86 % of all benefits), as well as housing and social exclusion (52 % of all benefits), benefits in kind predominate, while the share of cash benefits occupies a dominant position in the remaining areas (BMASK, 2016). Since entering the EU in 1995, there has been a slight trend towards strengthening the component of benefits in kind. The proportion of non-cash benefits increased from 26 % in 1995 to 31 % in 2015. This increase can be observed in all functional areas, with the exception of the area of 'Housing and Social Exclusion'. Particularly noteworthy in this respect are the extensive development of institutional childcare, the prioritization of rehabilitation measures on invalidity or occupational disability pensions and the extension of active labour market policies. (Heitzmann, Österle, & Pennerstorfer, 2015).

The Austrian welfare state is described in comparative literature as a conservative or corporatist welfare state. (see Esping-Andersen 1990). Central elements being essential for the Austrian system are the close connection between social protection and gainful employment, a high value of the status preservation and a central meaning of families as providers of social benefits. The insurance principle dominates the areas of aging, health, unemployment and accidents at work. These areas are largely financed by insurance contributions by employers and employees in the pay-as-you-go system, with a not inconsiderable share of tax financing playing a role, especially in the areas of old age and health. In the areas of family and care, on the other hand, a universal tax-financed system predominates; demand-oriented services dominate housing and social exclusion. (BMASK, 2016; Heitzmann & Österle, 2008). Furthermore, a high consensus orientation, strong role of the social partnership, and high continuity are characteristic of the Austrian welfare state. (Österle & Heitzmann, in publishing). For example, in spite of accession to the European Union (1995) and the economic crisis, no major changes in social policy direction have been identified over the past two decades (Österle & Heitzmann, in publishing). Nonetheless, since 2010, cost containment measures have been implemented in some welfare state areas. For the population of working age, for example, there have been below-average increases in social expenditure due to the more restrictive practice of disability pensions and early old-age pensions; on the other hand, there was a contrary development as a result of the strong expansion of mobile and inpatient care facilities. (Steiner 2017, p. 172).

Competencies in social legislation are shared by the federal government, nine states and the municipalities, with social security and general benefits being allocated to the federal government, while the regional and local authorities are largely responsible for health care, housing, social services, child and youth welfare, provision of childcare facilities and the needs-based minimum income assurance (see e.g. Heitzmann & Österle 2008). The federalist structures in Austria require different service offerings for similar target groups in some fields of work. For example, school’s social services are offered in different federal states with different emphases in terms of content and under various structural conditions in cooperation with teachers and school psychologists. The offers of homeless assistance are also very different in the individual federal states, since housing policy is a matter of the state. Particularly with regard to the needs-based minimum income protection, there have been increased discussions and efforts in recent years to standardize benefits, which has hitherto not been successful. Other important players in Austrian social policy are the main Association of Austrian social security institutions, as well as the social partners, which consist of employee and employer representations. Considering comparatively low unemployment, low poverty risk rates, as well as a relatively equal distribution of household income, the Austrian Welfare State can be described as relatively effective. However, Austria has an extreme concentration of wealth, also due to the fact that there is no inheritance tax. Furthermore, Austria records a persistently high inequality between women and men, which is reflected in an uneven distribution of gainful employment and reproductive labour and one of the highest hourly gender pay gap in Europe. Besides a persistently low social mobility appears in Austria. Educational opportunities strongly depend on the household income of the parents. The economic crisis has also increased long-term unemployment: the number of long-term unemployed has tripled since 2008. Another current problem is the sharp increase in rents in recent years, which is disproportionately burdening people with low incomes (BMASK, 2017). About 500.000 of the total 1.9 million people in council housing live in the capital city of Vienna. Although municipal housing plays an essential role, with an urban evisceration prevention programme and a 'housing first' principle, a large number of homeless assistance agencies are needed to avoid housing and homelessness. A growing group of homeless people comes from EU countries such as Hungary, Germany, Slovakia, Poland or Romania. Many of the EU internal migrants try to escape poverty in their own countries, but find only limited or precarious jobs in Austria, which make a corresponding housing supply impossible. According to data from the EU-SILC survey, 14 % of the Austrian population in 2017 were considered at risk of poverty [4], i.e. their income was below 60 % of the median income, another 4 % as manifest poor. Some 116.000 children and young people are affected by overt poverty (Statistik Austria, 2018). In 2016, a total of 307.533 people (+ 23.159 persons compared to 2015) received demand-oriented minimum income support (BMS), with 56 % of recipients living in Vienna. (Pratscher 2017). The increasing number of BMS recipients promoted the political discourse towards nationwide standardization of the level of BMS coverage and stricter access conditions for asylum seekers.

2 Overview of the Austrian Social Economy

There is a long tradition of cooperation between the public sector and nonprofit organizations in Austria’s social economy (see Pennerstorfer, Schneider, & Badelt, 2013). Very often, social services are publicly funded but created by private nonprofit organizations. Profit-oriented organizations can still be considered to have a subordinate role in this division of labour, although here in recent years – especially in individual areas such as the nursing sector (see e.g. Heitzmann et al., 2015 for a more detailed description of changes in the care sector, especially the 24-hour care) or the refugee aid (see e.g. Frühwirth & Lachmayer 2015; Schenk 2015) – significant changes were observed, some of which were also discussed very controversially.

The size and economic importance of the Austrian social economy are not easy to determine. This is partly due to the fact that there is no single definition of what makes up the Austrian social economy and, secondly, to the fact that many social economy enterprises are not or only very superficially statistically recorded. Regarding the first point mentioned, it can be stated that the term social economy is not very widespread in Austria and instead different terminology is used. It remains unclear whether socio-economic organizations also include companies in the healthcare sector, whether, for example, exclusively nonprofit organizations are considered to be social economy enterprises or the sector broadly includes public or profit oriented companies.

We use a broader definition in this article, and my organizations providing social services, regardless of their institutional form. Social services in this definition are needs-oriented and person-oriented advisory, mentoring and supportive activities, which are provided by (mostly professional) assistants – e.g. Social workers – co-produced with clients or clients to bring about change or the maintenance of existing conditions for the common good. In the ÖNACE classification, the Austrian version of the classification of economic branches, these are mainly the categories 'Homes' (Q87) and 'Social welfare' (Q88) (see: Statistik Austria, without date). In the section 'Health Care' 'ambulance and emergency services' was well as 'home nursing' are also relevant areas for the Austrian social economy. A closer look at this economic classification also shows that this is not sufficiently differentiated in the section on social welfare, so that many important, but in part very heterogeneous structured organizations fall into a kind of 'residual collection category' 'Other Social Welfare, not mentioned elsewhere', making it difficult to give specific statements for sections of the industry. According to Statistik Austria data, in 2016 there were 44.962 organizations (including small and micro enterprises) in the economic sectors 87 (nursing) and 88 (social services), which accounts for about 8 % of all Austrian companies (Statistik Austria, without date). Thus, however, the mentioned subsections in the area of 'health care' or other sections which could also affect the social economy, such as the 'kindergartens and preschools' or 'other associations' are not covered, whereby the mentioned figures on the social economy tend to represent a lower limit. Dimmel and Schmid (2013) on the other hand, estimated that the Austrian social economy consisted of around 6.300 associations, 300 private limited companies and 20 cooperatives. Thus, no public providers were included in this estimation. The two very different statements underline once again the sparse data and the low level of information for Austria. Nonprofit organizations in the economic sectors Q87 (Care) and Q88 (Welfare) achieved gross value added of approximately € 3 billion in 2013 (Leisch, Pennerstorfer & Schneider 2016).

As mentioned, providers of different institutional nature are active in the Austrian social economy. For the most part the public and nonprofit organizations, as well as profit oriented companies play a significant role in each sub-sector. In the ÖNACE category Q88 (Social Welfare) nonprofit organizations generated 89 % of gross value added, i.e. nonprofit organizations are by far the most important institutional providers of social services. In the field of residential homes, the provider landscape is a lot more diverse: Here, nonprofit organizations generated about 45 % of total gross value added (see Leisch et al. 2016).

The social economy Austria (SWÖ) was founded in 1997 as a representation of the employers. It is a professional association of employers for health and social professions with voluntary membership. The aim was, inter alia, to prepare a nationwide collective agreement for health and social services, work for the handicapped, child and youth welfare and labour market services, which has been implemented in the meantime. The SWÖ collective agreement applies to more than 100.000 employees (Sozialwirtschaft Österreich, 2018), but individual organizations such as Caritas or the association ‘Neustart’ use their own collective agreements. The SWÖ, with its 430 member organizations in 2016, also plays an important role in the Austrian social economy discourse, for example by commenting on planned laws and regulations (e.g. on the amendment to the Health and Nursing Act, on the Register of Health Professionals, on the Adult Protection Act or on the reduction of the minimum income). With regard to the amendment of the Public Procurement Law (2016), a guideline with quality criteria for project initiators was developed together with other associations. Likewise in 2016, a cross-sectoral nonprofit alliance for a charitable status with umbrella organizations in the fields of social, environmental, cultural and development cooperation was set up to improve framework conditions for charitable work in Austria and strengthen the role of the Third Sector in the legislative process (Sozialwirtschaft Österreich 2017).

In social work, there are five major providers to be mentioned as leading organizations, that are either close to a political party or to a church: Caritas, Diakonie, Volkshilfe, Hilfswerk and Rotes Kreuz. These organizations often consist of several sub-organizations and umbrella organizations in their structural set-up, and they usually offer a variety of services in different sub-areas. Besides, there are medium-sized providers on the market who specialize increasingly in a service area (see Dimmel & Schmid 2013). Finally a variety of smaller providers can be found in segments of the social economy, varying however according to the service sector. In Austria too, public discourse around social entrepreneurship has been booming for about 10 to 15 years. In recent years, social entrepreneurship has been deliberately promoted through various institutions and promotional channels. Such grants are funds of the AWS (Austria Economic Service of the Federal Chamber of Commerce) or microcredits of the Federal Ministry of Labour, Social Affairs, Health and Consumer Protection. The university founder forum INiTS (Innovation into Business) supports start-up companies as an incubator by consulting services and start-up capital. The Impact Hub Vienna is a community for social enterprises, social investors, consultants, etc. Ashoka Austria provides social entrepreneurs with potential supporters in the start-up phase.

In the last years, many new social business ideas have been realized that pursue a social mission both entrepreneurially and innovatively. Examples are:

  • The coffee house ‚Full board‘ promotes the dialogue between the generations; Senior citizens bake and sell cakes, thus making a contribution against loneliness and poverty. The Sindbad mentoring programme provides students and young professionals with personal mentors to plan the future of their education together.
  • Groove & Feather offers refugees in Vienna a perspective on the Austrian labour market by producing high quality indoor and outdoor furniture. Magda's Hotel is a social business of Caritas Vienna, which has converted a former senior's house into a modern hotel by re-cycling and up-cycling and offers job opportunities to people with a refugee background.

The above-mentioned division of labour between the public sector as a financier and nonprofit organizations as providers in the social economy also allows a look at the financing of these services. Thus about 80 % of all income in social welfare comes from the public sector (see Pennerstorfer, Schneider, & Reitzinger 2015, p. 19 f.). On the one hand state transfers are made in the form of subsidies. However, the vast majority consists of payments based on service contracts. This type of financing is of increasing importance for social economy enterprises. An investigation of Austrian NPOs showed that the already high share of revenues from public service contracts continued to increase between 2007 and 2014, while the share of subsidies fell to approximately the same extent (see Pennerstorfer et al. 2015, p. 41).

Likewise, since the 1990s, social economy organizations have been using various funding options from the European Union as an (additional) financing option in order to test new services for specific target groups through innovative projects. The European Social Fund (ESF) in Austria, for example, supports projects in the field of work, education and poverty reduction. However, the use of EU funds also requires appropriate human and financial resources as well as specific know-how from the project applicants. This usually favours larger and more experienced social economy organizations (see Zierer, 2018).

3 Social work in Austria

The social work in Austria looks back on a history of more than a hundred years. In 1912, Ilse Arlt founded the united professional courses for people’s care – the first female nursery school in Vienna. Then post-secondary education was offered – most recently at social work academies. Since 2001, social workers have been trained at colleges. Since 2008, the three-year bachelor programme and two-year masters programmes have been offered with different thematic priorities (such as child and family-centered social work, social economy and social work). Doctoral options are only occasionally used at universities. The university location of the training supported the academic development from practice oriented social work of the profession in the direction of scientific discipline. Numerous research projects at the universities of applied sciences in the individual federal states are evid3nce of the enhanced scientific orientation of the teachers. To promote the scientific discourse of social work in Austria and to establish a social work science, the online journal Soziales Kapital (social capital) was founded in 2008.

The individual universities of applied sciences pursue a generalistic educational goal in the bachelor programmes for social work in order to enable graduates to work in different occupations or occupational fields: children/​youth/​family; elderly people; material security; health; profession and education; migration; women/​girls, men/guys; in forced and standardization contexts; in the social space; social pedagogy with children/​young people/​adults and international social work.

With the introduction of Bachelor's and Master's degree programmes at Austrian universities of applied sciences, the designation of study programmes has changed from 'social work' to 'societal work'. This was associated with a new qualification claim for social work and social education (Sting, 2015). However, the discussion about social work and social education under the common phrase 'social work' seems to be continuing. The diverse educational landscape for social education also has an influence on this: some locations (for example Baden, Vienna) offer colleges (at the post-secondary level), the University of Graz offers both a Bachelor's and a Master's degree in Social Education. Other universities offer only socio-pedagogical specializations in the field of educational sciences (e.g. Innsbruck, Salzburg); at colleges, a master's programme in social education (e.g. St. Pölten) is offered.

In 2012, the Österreichische Gesellschaft für Soziale Arbeit (OGSA, Austrian Society for Social Work) was founded as an Austrian-wide association of experts for the promotion of the discipline and profession of social work and networking platform for research, theory and teaching. The purpose is to carry out joint conferences and symposia, to promote publications, to form expert committees and to give opinions on university, scientific and socio-political issues.

As already mentioned, the Collective Agreement of the Social Economy Austria of the Association of Austrian Social and Health Companies (SWÖ KV 2018) regulates the collective agreement for four specialist groups: health and social services, childcare/​services for children and youth, labour market services and work with disabled people/​psychosocial work. Social workers can usually be found in the 8th out of a total of 9 groups; group 7 applies to caregivers in the open youth work. Civil service organizations (federal, state, local) have their own salary schemes.

A professional law or register that provides the framework for training, employees, users and organizations to regulate access to the profession and to describe the areas of responsibility does not (yet) exist in Austria. Since the 1990s, however, there has been a discussion around the draft of a professional law, which was presented by the Austrian Professional Association of Social Work (OBDS) in numerous political bodies. With the first graduates of the master's programmes for social work (especially for those without an undergraduate degree in social work), the question of the professional right and the professional access changed in a new way. A look at the 'Career Compass' of the Austria-wide labour market service shows that social workers engage with life and social counselors, social workers, youth workers or supervisors, case managers, social managers and others in similar work fields. There is a clear distinction only to mediators and psychotherapists who have protected their activities through appropriate laws. For social workers, a postgraduate (master) degree in mediation, psychotherapy or supervision offers an additional option in terms of freelance work.

4 Current developments and challenges for employees and managers in social economy organizations

As in many other Western countries, there has been a trend in Austria since the 1990s for marketization and economization in the social economy (see e.g. Diebäcker, Ranftler, Strahner, & Wolfgruber 2009a; Simsa 2013). This is reflected by a stronger focus on market principles and an increased use of management techniques in social economy organizations. The prevailing paradigm of New Public Management in administration has also been passed on to social economy organizations. This can mainly be explained by the already mentioned change in the contractual relationship with the public sector. While in the second half of the 20th century subsidies had the highest priority, from the beginning of the 1990s these were increasingly replaced by service contracts (Meyer & Simsa 2013). These often specify the nature and design (including quality criteria) of the services to be provided, as well as the target groups. With the performance contracts, the accountability obligations to the donor and the general public increased, which also increased the key figure orientation within the organizations (Neumayr & Pennerstorfer, in publishing). Along with this development a professionalization of the management could be observed. Performance contracts are often awarded in competitive tendering procedures, so competition for public funds has increased for many organizations. As part of these procedures, the market was often opened to profit-oriented companies.

Within the past 10 years, a change in the contractual relationship with the public sector has been observed again: It shows that social economy organizations are increasingly under pressure not only to report on their services but also to prove the impact of the services (see here Neumayr & Pennerstorfer, in publishing). For example, calculating a social return on investment (SROI) or producing impact reports can serve as indicators of that change (Simsa, 2017). Numerous organizations have carried out SROI analyzes, others have worked with concrete impact indicators and chains to make output, outcome and impact transparent, and to make a comprehensible contribution both to the client and society (see e.g. Dialog 2018; Neustart 2017). The public sector controls results by focusing performance contracts on specific impact goals (see Astleithner 2012; Greiling & Stötzer 2015). The current pilot project in Upper Austria – 'Economic and social empowerment of women affected by violence' – in the form of a social impact bond shows that new ways of financing have also 'arrived' in Austria (see BMASK 2017, p. 139 ff.). However, this is currently rather experimental in nature and it remains to be seen how and if this type of project funding will continue to evolve in the future.

Austria has a great deal of research into the implications of the developments described above available (in particular the nature of funding and the relationship between contracting authorities and executing organizations) on the Austrian social economy, the practices of organizations and working conditions in organizations:

For Austria, for example, competition in the allocation of funds in Austria mainly led to price competition (see Schneider & Trukeschitz 2007). Dimmel (2012) states that public procurement procedures are particularly favourable to large providers. This picture could also be confirmed in an empirical study for Austria. A current project at the Institute for Social Policy at WU Vienna analyzes the growth rates of Austrian social organizations in 2003 – 2014. It showed that large providers indeed have higher growth rates, and especially smaller organizations were hit harder by the economic crisis and public austerity than bigger ones (Reitzinger, Pennerstorfer, & Schneider, in publishing). Here it remains to be seen how and if a change in the market structure in favour of a few large providers (at least in some areas of the social economy) will also lead to changes in the power relations between public authorities and institutions (see here Greiling & Stötzer 2015). A survey of Austrian nonprofit organizations on the development trends of the last five years showed that almost half of all participating social welfare organizations answered that the competitive pressure had increased a little or greatly (see Pennerstorfer et al., 2015, S. 26). 

Within the organizations it emerges that the prevailing price competition tends to inhibit innovation (Schneider & Pennerstorfer 2014, p. 179). In his work for Austria, Leitner (2009) shows that excess organizational capacity and resources are essential for the development of innovations, and above all, excess personnel capacities are important for the innovation performance of an organization. It is also evident in this area that particularly smaller organizations are finding it difficult to obtain funding for the development of innovations (see Pennerstorfer & Heitzmann 2016). Numerous socioeconomic or nonprofit organizations have been using a wide range of EU funding options since the 1990s in order to use projects to tap into new service offerings, areas of activity, target groups or markets. As particularly innovation-promoting and relatively less bureaucratic, the EU Community Initiative EQUAL was experienced until 2006. However, funding in subsequent funding periods 2007–2013 and 2014–2020 is increasingly favouring larger, experienced social economy organizations that have the appropriate human resources and years of experience to use the appropriate 'calls' (call for projects); they are more likely to provide the necessary co-financing and pre-financing for projects and to mitigate any risks accordingly. For these organizations, EU projects require a strategic, marketing, organizational or/and human resources development decision (see Zierer, 2015, 2018). Different social economy organizations tend to switch to mixed forms of financing. Without fundraising, sponsoring contracts and donations, certain offers for different target groups would no longer be possible. The Austrian Donation Quality Seal (Spendengütesiegel, OSGS), which has been existing since 2001, guarantees their rigorous and correct donation fund raising and administration through a system of donor-collecting nonprofit organizations.

It remains to be seen how the long-term perspective of the recent social business founded by crowdfunding will be shaped, and whether the first isolated initiatives of sharing economy or other alternative forms of business will in future also be practiced in social economy organizations.

In view of the ÖVP-FPÖ government, the leaders and staff of numerous social economy organizations and NGOs in Austria have been confronted with changed social policy goals and measures since December 2017 that have an impact on various target groups or recipients of social services. A point of discussion is a nationwide regulation of the so far country-specific demand-oriented minimum income protection (Bedarfsorientierten Mindestsicherung, BMS) – with the aim of especially to make savings for asylum-seekers. Budget cuts in the area of the Public Employment Service require a reduction of the previous course offer (especially for immigrants). Women-specific institutions (e.g. for those affected by violence) are also facing new financial uncertainties. In addition, there is a tendency for increased punitivity towards audiences in public space – e.g. homeless or begging people – observable: testify about the prohibition of alcohol of the city of Vienna at Praterstern (2018), begging bans in various state capitals. All these developments have concrete effects on the social work of these target groups.

Likewise, it could be shown exemplary for some fields of action, such as refugee support, that price competition has negative effects on quality aspects (Schenk 2015; Schneider & Trukeschitz 2007). It also appears that performance contracts and impact-driven management make it increasingly difficult to carry out non-billable activities. Instead, public procurement promotes specialization, standardization, and focus on specific audiences (see e.g. Diebäcker et al. 2009a). In this context, it was considered that the developments could lead to a possible shift of function in organizations, in particular the pressure of interest representation and community education could come under pressure. However, several research projects on this question have not yielded a consistent result (Maier, Leitner, Meyer & Millner 2009; Neumayr, Schneider & Meyer 2015).

The financial insecurity which increased by competitive procedure and short contract terms was transferred, in the end, also on the employees. As well as in other countries a precarity of the working conditions can be observed. Employees are demanded to handle with an expansion of the quota with sinking time resources and increased documentation expenditure (see e.g. Diebäcker, Ranftler, Strahner & Wolfgruber 2009b; Dimmel, 2012). Social workers find themselves in the area of conflict between economic and political conditions and dependencies, which have a decisive influence on the structuring of their professional activity. Growing competitive pressure on social economy organizations is increasing the pressure on them to put efficiency into practice. The stipulation of impact goals, which mark a counseling or support success, often lead to the fact that offers of help are aimed primarily at those clients, customers or addressees of social work, who promise a consulting or support success and in which the use of funds proves as effective and efficient (creaming effect). Time-limited performance contracts put pressure on skilled workers and create uncertainty. In addition, they see themselves required to document their services in detail and comprehensively and to achieve counseling and support goals in ever shorter time for ever more clearly defined client groups. In 2007, KRISO (Critical Social Work) moved into the limelight with the 'Vienna Declaration on Economization and Professionalism in Social Work'; it included criticisms of the economization of social work and feared the loss of professional self-control for social work through economic heteronomy, a limitation to measurability and standardization, the exclusion of clients from scarce resources, the loss of professional opportunities for social work through reinforced pressure on competition and cost, as well as the loss of public criticism and mediation in view of their politicization.

The Austrian social economy can often be described as a low-wage sector. The proportion of women among employees is very high (80 % in social work), and the sector has very high part-time employment rates (over 60 % in social work) (see Leisch et al. 2016; Pennerstorfer et al. 2015; Schneider et al., 2011). Research has also shown that workers in the social economy are exposed to above-average physical and psychological stress (see Schneider et al., 2011) and are particularly at risk of burnout (Dimmel 2012). Unsurprisingly, some dissatisfaction with working conditions, high turnover and a shortage of staff can be seen as problems in these occupational fields.

At the same time, the refugee movements in 2015 and 2016 reflected a renewed civil society commitment. In order to be able to provide for the large number of asylum seekers, numerous volunteers have taken on tasks of the (social) state over a longer period of time and provided first aid and integration work. The 2nd Volunteer Report (BMASK, 2015) stated that voluntary participation in organizations and associations remained constant compared to the same period in 2006, whereas informal volunteering increased by 4 percent. During this time, many social economy organizations have been faced with unprecedented challenges: despite a long period of uncertain public funding, they have often provided rapid help far from their core business; foresighted requirements planning was hardly possible.

5 Effects of demographic and technological change

Demographic change also affects the staff of social economy organizations. It represents a current challenge for personnel management. Similar to Germany, there is currently an age-related generation change in the management positions of numerous organizations (see Maelicke 2012, p. 15). Besides, it often concerns experienced founders of projects, clubs and organizations, most of which have a long-term leadership position.

In addition to this generational change, numerous representatives of 'Generation Y' (birth cohorts 1980–1995) and 'Generation Z' (birth cohorts 1995–2010) are already working as new employees. They are among the 'digital natives', grew up in a 'multi-option society' and usually have good educational qualifications; nevertheless, their chance of a permanent job is sometimes low ('internships generation'). They seek meaningful activities, professional independence, flat hierarchies, teamwork, flexibility, a secure workplace and a balanced work-life balance (Klaus & Albrecht, 2014). They are usually faced with working conditions that are characterized by clearly predefined performance targets and growing pressure for performance and legitimacy and that, due to the general austerity dictates, make long-term planning less possible.

Demographic change also requires extended working lives and requires both a life-stage-oriented personnel development (see Bossman & Degen, 2017) and generation management that promotes cooperation between younger and older employees as part of diversity management. On the other hand, age-structure analyzes in social economy organizations are needed to develop preventive (ergonomic, occupational-medical) measures for age-appropriate working (keyword: 'productive aging') and to use the development and transfer of different knowledge and competencies and experiences in mixed-age teams.

The demographic change and the migration movements above all in the direction of large Austrian cities cause an increased need for qualified employees in the area of social work, care and support, who also have additional linguistic and intercultural competences in order to adapt the previous service offer more closely to immigrant groups. While the previous counseling and care offers have primarily been based on the largest migrant communities from ex-Yugoslavia and Turkey, there is now an increased need for additional language skills – e.g. Arabic for the largest refugee groups – Afghan and Syrian citizens – who fled to Austria from 2015 (see BMI 2015, 2016, 2017).

A key challenge for the social economy is digitization, which is rapidly changing social services and business models. Social media, the internet of things, specific industry software and legal requirements (such as the General Data Protection Regulation and the Data Protection Act) have a strong impact on the services offered and the work processes of employees in different organizations. Often, the consequences of digital change are still underestimated: new forms of communication and participation for different groups of people, the use of data volumes, e.g. for marketing purposes and market advantages, the recruitment of volunteers, new forms of financing (keyword: crowdfunding, fundraising). The classic social spaces are being expanded by data rooms and digital living environments. The challenge for social service providers now is to use both the classic and the new channels. (see Kreidenweis 2018, p. 21)

Smaller and younger organizations in the non-profit sector tend to be more active in addressing the current changes brought on by digital transformation than large, established companies. Digitization is often equated with the use of digital tools and administrative tasks. In doing so, the structural and procedural changes that are triggered by it are often underestimated. Digitization requires an examination of new technologies and an openness to change and people who can work in an interdisciplinary and networked manner (see Duft, Kreutter, Peters & Olfe 2017).

6 Results

The 'golden age' of the corporatist arrangement of the social partnership in Austria, which was so important after 1945, has already passed its heyday in the face of a changed economic, political and social environment (see Tálos 2006). The Austrian welfare state is currently being discussed very fundamentally against the background of its affordability and with regard to preferred conditions for Austrian citizens. As in other countries, Austrian social economy organizations face similar challenges: a competition for (time-limited) public service contracts, increasing the quality, efficiency and impact of social service, increasing case numbers, increased administrative expenditure with client documentation, new clients/​client groups, the search for new forms of financing, the pressure to innovate and much more.

Within socio-economic organizations a generation change has started, requiring leaders and staff to address the current demographic trends that involve both the age pyramid and recent migration movements, as well as the multiple demands entailed by digital transformation. As a result social services will change in shape and scope. At the same time, the working conditions of employees in socio-economic organizations will change as well as the possibilities of existing clients or customers for partaking and participation.

7 Literature

Astleithner, F. (2012). Diskussion des Nutzens und der Herausforderungen der Wirkungsorientierung am Beispiel der Wiener Wohnungslosenhilfe. soziales_kapital, 2012(8).

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[1] Current data can be found at:​statistiken/​menschen_und_gesellschaft/​bevoelkerung/​index.html

[2] Current data can be found at:​statistiken/​wirtschaft/​volkswirtschaftliche_gesamtrechnungen/​index.html

[3] All data related to the Social expenditure for Austria and in the EU comparison are taken from the Eurostat database (ESSPROS): (state: 21.6.2018)

[4] Current data can be found at:​statistiken/​menschen_und_gesellschaft/​soziales/​index.html

Written by
Astrid Pennerstorfer Ass.Prof. Dr. Astrid Pennerstorfer
Assistant professor at the Institute for Social Policy. Her research focuses on the analysis of social service markets and non-profit organizations as providers of social services, as well as their relationship to the public sector.

Brigitta Zierer Brigitta Zierer
Head of Studies and Lecturer at the European Master Programme 'Social Economy and Social Work' and heads the Department of Social Affairs at the FH Campus Vienna;
Work and research focus: social economy/social management, theory and practice of social work, EU funding and international cooperation and projects, organization; Supervisor, organizational consultant and trainer in private practice.

Cite this publication
Pennerstorfer, Astrid and Brigitta Zierer, 2018. Country profile Austria: Social Policy, Social Economy and Social Work In: socialnet International [online]. 2018-10-12. Retrieved 2023-03-20 from

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