ADP Europe at Work - A vision on temporary work

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This publication focuses on temporary work at the European level and presents the opinions of two leading European experts and one HR executive.

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ADP Europe at Work - A vision on temporary work

  1. 1. E U R O P E A T W O R K A VISION ON #1 TEMPORARY WORK JUNE 07 Following on ADP HR European Atlas, this new publication focuses on one specific HR theme and presents the opinions of two leading European experts and one HR executive. Welcome to the first issue of "Europe at Work. A vision on..." covering the challenges of temporary work at the European level. James arrowsmith frans Mutsaers tiziano treu associate Professor in industrial relations Human resources Director of sita former italian Minister of Labour, and Human resources Management at in the Netherlands chairman of the commission for Warwick Business school employment & social security at the italian senate "a two-fold approach "increase in temporary work to temporary work in a "towards smoother is likely to continue" personnel-intensive sector" european harmonisation" Page 2 Page 4 Page 6 facts and figures p. 8-9 An ADP publication
  2. 2. teMPOrarY WOrK James Arrowsmith Increase in temporary work is likely to continue For more than 15 years, Dr James Arrowsmith has been studying diverse aspects of flexibility in EU employment. As he analyses the root causes of the current temporary work level, he forecasts that the increase in fixed-term employment will be a lasting trend. europe at work: Looking at redundancies or dispose of a between social partners exist in temporary work rates in europe, worker, therefore employers Poland as in the historic western we can see spain above 33%, the more often opt for fixed-term countries, so workers have uK below 6%, to take two employment. The UK is the less weight in the bargaining examples – why are figures so exact opposite. Hiring and firing process. This is why temporary different in europe? is cheaper and easier, so there employment is going up in James Arrowsmith: I look at it is no hesitation in going for Poland. from a different angle. Most of indefinite contracts. “ the historic EU countries, with Large firms have more room for “ a core and peripheral model James Arrowsmith, Associate Professor in Industrial Relations and Human Resources Management at Warwick Business School in the UK the noticeable exception of the What about Poland, which also Many countries – germany for UK, have fixed-term contract has a very high temporary work instance – are experiencing a rates in the range 10-15%. rate? significant increase in temporary There is a convergence in Regulation in Poland offers a lot employment. Will this trend the western economy. The of flexibility. Firms that decide continue? explanation for the radically to set up there aim to take full I can’t see it going down, different numbers in the UK and advantage of it, and obviously simply because the three major Spain lies with local regulation don’t use the same rigid models governing factors are heading in of permanent contracts. In as in their country of origin. In the same direction. Therefore, Spain, it is difficult to make addition, no such agreements temporary work is likely to 2
  3. 3. continue to increase. Germany is typical of a country coming a matter of discussion. Do they work well together? The >> out of recession. Employers bottom line is to determine Dr James arrowsmith is are still reluctant to hire while if gains from flexibility in unemployment remains high. numbers compensate for any associate Professor in industrial A new political context made resultant loss of skills. And relations and Human resources temporary work easier to use, again, this brings us back to Management at Warwick facilitating deregulation and our discussion on sectors, since Business school, uK. flexibility. Some indicators different sectors have different His principal research areas confirm this: between 2003 requirements in terms of skills. and 2006, the interim work are flexible working time agency Manpower multiplied arrangements and performance- the number of its branches in related pay. Germany by 5. is temporary employment more some of his publications… frequently used in small "Why is there not more ‘annualized- businesses? hours’ working in Britain?", Industrial There is no evidence for this, Relations Journal, 39, (forthcoming in as large firms have more room May 2008) for a core and peripheral model: L’interim en UE : les stratégies des acteurs invest in key strategic skills and sociaux en Europe, with r. Belkacem, c. Kornig and f. Michon use temporary workers as a ed. Les Mondes de l’intérim (forthcoming buffer. Let’s not forget that in 2008) the traditional reasons for "temporary agency Work in the enlarged temporary work are seasonal eu", Luxembourg: european commission, requirements and substitution 2006 for low-skilled profiles. The "the european cross-border dimension first influencing factor is the to collective bargaining in multi-national sector of employment, which is companies", with P. Marginson, European interrelated to a certain extent Journal of Industrial Relations, 12:3, 2006 with company size. Needs range from large manufacturing companies having to absorb production peaks to additional business in retail firms during the Christmas period. How are temporary work figures influencing Hr strategies? Flexibility is a criterion that companies consider as they move facilities from one country to another. There are pros and cons to this approach. It puts questions on the table in HR departments. What about the training of temporary workers, especially when there are safety issues? Are temporary workers motivated and committed to quality results? Coexistence EXPERT between permanent and temporary workers is also 3
  4. 4. teMPOrarY WOrK Close-up on SITA in the Netherlan A two-fold approach t W aste collection and treatment is the type of business where customers can’t really wait. SITA Netherlands & Flanders (SITA NL/ in a personnel-intensiv FL) serves 60,000 clients, many of them small professionals, and can’t afford to lose contracts because of absent personnel. The waste collection business requires accurate ope “In waste collection, we replace anyone team staffing, and SITA Netherlands constantly calls who is sick, in training or on vacation by temporary agency personnel. A round that interim personnel. It also hires most of its new emplo requires three people can’t be done by fewer” underlines Frans Mutsaers, Human under one-year contracts, which is a common practi Resources Director of SITA NL/FL. “We have This two-sided approach to temporary work is facilita made a time commitment to our customers and need to adjust our blue-collar workforce. the so-called Dutch flexicurity model. In short, we must be very flexible.” On the top of the company’s 3,500 people in operation, 350 workers on average come from temporary agencies for periods that can be as short as one day. above the national average This intensive calling on interim workers leads to high temporary work figures at SITA NL/FL. “With peaks of 25% interim workers during the July/August period, we are no doubt above the Dutch national average*” analyses Frans Mutsaers. “We are highly dependent on temporary work. This is simply due to the nature of our sector. SITA has a comparable level of interim workers in other countries where it operates, such as the UK, France and Germany.” At SITA, temporary work is managed locally in each country, and there is no policy shared at the European level. Besides sector-driven short-term employee flexibility and protection substitution, there is another facet to With interim workers for short-term temporary work at SITA NL/FL that also substitution on the one hand and fixed-term adds to the total. The company hires its contracts for new recruits on the other, SITA new staff with fixed-term contracts, which NL/FL’s temporary work policy makes good is a common integration practice in the use of Dutch regulations, described by some Netherlands. “As our legal frameworks experts as an example of flexicurity**. For permit, people usually start with us under instance, interim workers are considered a one-year contract, though this is not permanent employees of their agency after systematic and depends on profiles and 26 weeks of regular service. And public vacancies”, SITA NL/FL HR director employment policies encourage interim explains. “We consider such employees agencies to engage in training their staff. as though they had signed a permanent “Our interim workers are also trained on contract, and 95% of them eventually stay safety by their agency” points out SITA NL/ with us.” FL HR Director. “Our law gives us enough 4
  5. 5. nds to temporary work ve sector erational flexibility for business on the one hand and s on the possibility to protect our people on the other.” >> oyees frans Mutsaers, 50, is the Human resources One-year fixed-term contracts for new Director of sita Netherlands/flanders ice. employees also provide both parties with (Belgium), based in arnhem (NL). He is a ated by flexibility. “Employees can resign on short member of the Board of Directors of sita notice”, explains Frans Mutsaers, “it’s Netherlands/flanders and a member of the a well-accepted way to start that helps sueZ worldwide "350 topex" group. workers to integrate. The contract can be extended twice, but after three years the employer has to switch to a permanent His responsibilities cover general Hr activities “ contract.” But under market pressure, this for sita Netherlands/flanders, with direct also remains a matter for social bargaining: management of an Hr Department of 45 people. “ our blue-collar workforce “For specific profiles that We need to adjust are difficultrepresentatives, some sales to recruit, like some higher management or some ICT (Information and Communication Technologies) as a director, frans Mutsaers is also in charge of all environment, Quality & safety (eQs) aspects for sita Netherlands/flanders, for which he manages a dedicated eQs team of 35 people. positions, we sometimes propose SITA Netherlands & Flanders permanent contracts”, concludes A leader in waste collection the SITA NL/FL HR Director. and treatment * 15.5% in 2005 (source: Eurostat) SITA Netherlands & Flanders (Northern ** “The concept of ‘flexicurity’: a new Belgium) is a service provider in the Frans Mutsaers, approach to regulating employment Human Resources Director collection, recycling, and treatment of waste. and labour markets” by Ton of SITA in the Netherlands The company employs 3,500 employees and Wilthagen and Frank Tros (http:// has a turnover of e 640 million. SITA Waste home.medewerker.uva.nl/f.h.tros/ bestanden/2004_TRANSFERa.pdf) Services is a part of SUEZ, an industrial and services group active in sustainable development that provides innovative solutions in energy and the environment. SUEZ has 170,000 employees and a total revenue of e 40 billion, 80% of which is generated in Europe. PRACTICES 5
  6. 6. teMPOrarY WOrK Tiziano Treu Towards smoother European harmonisation An expert observer of the European labour market and former Italian Minister of Labour, Tiziano Treu underlines the link between rigidity of regulations and temporary work contracts in various European countries, as well as existing differences from North to South. To reconcile labour flexibility with social cohesion, he has presented a series of recommendations to the Council of Europe. europe at work: Why are most preoccupying aspect is the contracts are considered to be temporary employment rates, as recent trend that can be observed too rigid and the costs associated measured by fixed-term contract in hiring young people with with dismissals too high. figures, steadily rising throughout fixed-term contracts – to give an When it is easy to terminate europe? What is your view on this? example – which is the case with an indefinite contract, as in the Tiziano Treu: The fact that the 50% of them in Italy. UK for instance, the fixed-term number of employees with fixed- employment rate remains low. term contracts is slowly growing this trend doesn’t seem to be This explains why some countries confirms a continuous need for uniform throughout europe though. are easing their regulations – some degree of flexibility in the Why are there such differences Italy recently reduced labour costs company. These figures are not from one country to another? for indefinite contracts by 3% and worrisome as such with a few The factors that explain the gap Spain has decreased the cost of “ exceptions, like Spain, where between European countries in dismissal. A move towards flexicurity by collective “ agreements Tiziano Treu, former Italian Minister of Labour, Chairman of the Commission for Employment & Social Security at the Italian Senate the fixed-term employment rate terms of temporary employment is significantly higher than in also explain the acceleration other European countries. The I just mentioned. Indefinite 6
  7. 7. How has temporary employment changed the human capital of rather than jobs. In such a model, trade unions could >> companies? contribute as service providers Subordinate employees on the labour market. With that tiziano treu was the italian are still a great part of the in place, new employment Minister of Labour and social workforce, but other work policies could be designed to security from 1995 to 1998 arrangements, notably with combine the flexibility required and Minister of transport and independent workers, have for competitiveness and the Navigation from 1998 to 1999. emerged. Some of these security expected by workers – He has been a senator since workers, even though not a move towards real flexicurity. 2001, and is chairman of the legally speaking subordinates, When workers benefit from a find themselves in a situation safety net in case of commission for employment of economic dependence on unemployment, they feel more and social security at the italian one or many companies. They secure. Flexibility can then senate. form a new grey area between increase. dependent employment and self-employment. can this be harmonised at the He has been a Professor of european level? labour law at the catholic What are the drawbacks of that This must be tailored country-by- university of Milan since 1988, situation? country, sector-by-sector. In my and has written numerous The level of protection may vary view, quantitative limits should not books and publications on within the same company. There be fixed by law, but by collective labour law, trade union law and is a need to tailor the level of agreements. A three-fold approach protection to the various types is required for the system to industrial relations – italian of workers. On the one hand, self-regulate. First, move towards and comparative – including new regulations should consider flexible regulation by agreement. Labour Law in italy, whose extending some, but not all, Second, develop labour market revised second edition has just standard rights to workers in and welfare services for workers. been published (ed. Kluwer Law the grey area, like protection Third, provide an incentive so that international). against abrupt termination, employers use fixed-term contracts health or safety. On the other only when necessary. But with hand, highly independent, the existing differences between Mr treu has presented his vision skilled employees that are hired countries, the most sensible at numerous public meetings, with a subordinate contract approach can only be smoother notably in November 2005 before could be given more room for harmonisation. self-determination, for instance the european council in in the field of working time. strasbourg at a session entitled "New forms of flexibility: how What would be an alternative should labour law evolve?", approach then to flexibility in and in November 2002 before europe? the international Labour Given the differences between Organization in geneva with countries, there is no general answer. In my view, some "Labour law and social change". Mediterranean countries need to improve flexibility in their regulations. Simultaneously, labour market and welfare services must be developed, pretty much as in the nordic EXPERT countries. A general idea is that workers should be protected 7
  8. 8. facts & figures Ratio of employees with limited duration contract FI 16.5 NO 9.5 EE 2.7 SE 16.0 LV 8.4 DK ue iq 9.8 alt LT rB Me Ratio of employees ord 5.5 uN with limited duration rd Me contract as a % of IE total employment 3.7 NL UK PL < 5% 15.5 25.7 5.7 5 - 8% DE BE 14.2 8 - 10% 8.9 CZ LU 8.6 10 - 15% 5.3 SK 5.0 15 - 20% AT > 20% e iqu 9.1 HU t FR CH tlan 7.0 Source: European Communities Eurostat 13.3 12.8 SI 2006 – Data 2005 nA RO 17.4 a IT 2.4 Océ 12.3 e BG oi r rN 6.4 Me PT ES 19.5 GR 33.3 11.8 Mer M éditerranée MT 4.5 CY 14.0 Did you know? • In EU 25, on average, part-time employment rate • In Eu 25, over 25 million people worked with a was 11.4% in 2005. limited duration contract in 2006. • Usual hours worked per week by part-time employees in 2006 in EU 25 was 19.9 hours. 8
  9. 9. facts & figures Ratio of employees with limited duration contract: variation 2004-2005 2004 2005 2004 2005 ES PL PT SI FI SE NL DE CY FR CH IT GR DK NO AT BE CZ LV HU BG UK LT LU SK MT IE EE RO Source: European Communities Eurostat 2005-2006 – Data 2004-2005 ES PL PT SI FI SE NL DE CY FR CH IT GR DK NO AT BE CZ LV HU BG UK LT LU SK MT IE EE RO 15% Limited duration contract: variation 1996-2006 15% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Source: European Communities Eurostat 2006 – % of temporary employees 1996-2006 9
  10. 10. www.agence-arca.com © ADP Europe - June 2007 - Reprinted in January 2008 To receive ADP HR European Atlas, please contact: atlas.europe@europe.adp.com www.europe.adp.com ® HR Services

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