In Germany, business, labor, and state cooperate to support the labor market—this is referred to as tripartism. As Strünck proposed in his paper in 2010, long-term economic corporatism leads to an increase of social and human capital. Looking at the German labor market from an outside perspective, we recognize a paradoxical situation: regulation and restriction in labor increase flexibility on the company level. One might say that German small and medium-sized companies, without having the opportunity to fire or to outsource like large corporations, make a virtue out of necessity by cooperating and keeping their labor force on board. Human resources, especially the skilled labor force, are a perishable good. In times of demographic decrease when the need for highly educated workers rises, companies think twice before releasing employees while in a crisis, especially if there is a chance of the economy recovering. Then the demand rises, and they need more workers. This might lead to an advantage when times get better and recruitment of skilled and experienced workers becomes unnecessary.
Taking into account different alternative costs of recruitment and/or paying for residual values while keeping staff at the company, one has to take a close look at the economic and statutory surroundings of the labor market. On a company level, establishments were very innovative in avoiding dismissing employees. In addition, recent empirical surveys suggest that this applies to the working population in general. Even companies with an older working force were able to compete by retaining the experienced staff and keeping them up to date by retraining them. This strategy paid off because costs of firing people are high in coordinated economies like Germany.
Besides all of these incentives or needs for internal improvements of flexibility on the company level, yet another question appears: what happens if free riders take advantage of the investment other companies made in increasing and keeping internal flexibility? When asked whether he was afraid of other companies snatching his trained and skilled workers away from his company after the program, the director of a very successful medium-sized company, who invests quite a lot of money in his training program, replied “Well, I know all the owners and CEOs of the nearby companies. It is like a family thing – it is not what we do.”
 Wolfgang Dauth, Franziska Hirschenauer, and Felix Rüb, „Neue Typisierung regionaler Arbeitsmärkte: Damit Äpfel nicht mit Birnen verglichen werden,“ IAB-Kurzbericht, 15/2008 (Nürnberg, 2008). See also: http://doku.iab.de/kurzgraf/2008/kbfolien15081.pdf
 Lutz Bellmann and Hans-Dieter Gerner, „Company-level pacts for employment in the global crisis 2008/2009 * first evidence from representative German establishment-level panel data,“ The International Journal of Human Resource Management, Vol. 23, No. 16 (2012): 3375-96.