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Guidance note on European HR trends
FedEE 2006.02.16. 12:23
 Overall labour productivity in the EU15 (the 15 non-accession countries of the European Union) has been greater than that in either the USA or Japan over the period 1994-2003. Gross domestic product at purchasing power standards (PPS) shows that productivity relative to the EU15 fell by 9% in the USA and by 17% in Japan over the last decade. Over the same period, labour productivity per hour worked (again at PPS) fell by 1% in the USA and by almost 3% in Japan relative to the EU15. The EU15 countries spend a higher proportion of their GDP on education than the USA and Japan. Leading EU countries such as France (19.6%) and the UK (16.2%) have a much higher proportion of university graduates in science and technology in the 20-29 year old population than the USA (9.6%) and Japan (12.6%). A measure of the success of EU15 employers in maintaining labour costs in line with productivity can be found in the fact that unit labour costs have fallen by 0.4% in real terms over the last decade. However, one policy concern that has not been resolved is the gender pay gap. The difference between the average gross hourly earnings of men and women in the EU15 countries has remained at 16% since 1994.
In the EU15, the proportion of adults aged 25 to 64 who receive education and training each month has almost doubled since figures first became available in 1996. Lifelong learning is particularly strong in Scandinavia, the Netherlands and the UK. EU15 employers have also been successful in the retention of older workers, with Ireland, the Netherlands and Finland being the three best-performing countries.
HR policies and strategies checklist
The focus for HR strategy over the last decade has been to find an ever-widening range of methods to cut costs and improve operational performance. These tend to be carried out irrespective of the current stage of the economic cycle or a company's relative competitive position. Options which were once regarded as either in or out of fashion are now being assessed purely on their merits, and are being swiftly adopted if they seem likely to succeed.
We have entered an era of corporate perfectionism in which almost anything is possible. The prevailing aim of companies is not just to be more efficient and effective than their business rivals, but to be so good that it will be dangerous for competitors to try to emulate their achievements.
Cost saving
- Reduction of operational costs: redundancy - delayering - pay cuts and freezes - increasing variable pay as percentage of total pay - recruitment freezes - outsourcing - removing 'deputy' posts - gain sharing.
- Control of overheads: relocation to lower-cost centres - use of teleworkers - cutting benefits - rationalising back-office functions - trimming expense budgets - extending the working day.
- Limitation of future liabilities: changing from defined benefit to defined contribution pension schemes - removing incremental pay scales - curtailing 'grade creep'.
- Pain sharing: board pay cuts - HQ downsizing - single status facilities - limiting top management severance packages - outplacement counselling.
Operational flexibility
- Job flexibility: job design - flexible working hours - annual hours contracts - fixed-term contracts - multiskilled work teams.
- Pay and benefit flexibility: profit sharing - employee share ownership - share options - self -service benefits.
- Operational flexibility: time management - improving managerial leverage - the 24/7 workplace - use of freelance and temporary staff - suggestion schemes.
Human capital
- Encouragement of lifelong learning: individual learning accounts - action learning - elearning - cpd - mentoring.
- Retention of know-how: strategy for older workers - removing age barriers - knowledge management - developing knowledge banks.
- Promotion of equal opportunities: removing glass ceiling - equality training - equal opportunities monitoring - diversity policies - positive action.
- Promotion of health and fitness: in-house fitness centres - discounts on external facilities - stress counselling - company sports teams - regular medicals.
Performance effectiveness
- Use of performance management methods: benchmarking - process reengineering - management by objective - employee appraisal - upward feedback (360 degree feedback) - decentralization - empowerment - delegation - quality circles - open door policies - performance incentives - supply chain management - HR systems integration - data mining and warehousing.
- Improvement of recruitment process: student sponsorship - on-line recruitment - automated cv scanning - background checks - verification of cv data - University ratings - personality/literacy testing - assessment centres - head-hunting - succession planning.
- Reduction of absenteeism: attendance bonuses - wellness programmes - surveillance of those on long-term absence - motivational programmes.
- Prevention of fraud and theft: expense claim audits - cctv scanning - whistleblowing schemes - amnesties.
Further important elements in HR management are 'softer' policy concerns and personnel administration, together with legal compliance and the avoidance of litigation. Increased board visibility and accountability have become areas of concern following recent exposures of corporate irregularities such as the Enron affair. Data privacy and security are also becoming more significant issues and are making the application of HR policies a much more complex task.
Corporate culture
- Family-friendly workplace: work/life balance - childcare - eldercare - parental leave - emergency leave - term time working - job sharing - flexible working arrangements - sabbaticals.
- Corporate governance: annual social and environmental reports - remuneration committees - independent reviews - visibility and accountability of corporate boards.
- Localisation: support for local events - service contracts with SME's - replacement of expatriates with local employees - environmental improvement schemes.
- Employee welfare: hospital visits - disability counselling - company social functions - attendance at funerals - long service awards - flowers on birth of employee's children - car-sharing initiatives - season ticket loans.
Legal and ethical compliance
- Safety: statutory obligations - codes of conduct - safety training - joint committees - safety signs - emergency procedures - alcohol and drugs testing.
- Employment: statutory obligations - custom and practice - codes of conduct - disability quotas - collective agreements - works councils - European work councils.
- Privacy and security: codes of practice - data security standards(ISMS) - international transfers of personal data - email monitoring - subject access procedures.
- Personnel accounting: tax compliance - payroll procedures - IAS 19
- Community: corporate social responsibility (CSR) - work experience - student exchanges - sponsorship.
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© FedEE Services Ltd 2004
Last updated 06 February 2004 |
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