Moving into Europe: Are employers making the best decisions?
When a company is considering whether to invest in another country, there are numerous pitfalls to be avoided. One of the biggest headaches is the people dimension, with particular concerns about the availability of skilled workers, pay and potential difficulties with employee dismissal. Many employers end up relying on subjective assessments or data that is often inaccurate and seriously out of date.
FedEE's country ratings provide an objective evaluation of investment risk from a human resource perspective. The ratings cover 27 European Union countries, plus Iceland, Norway, Switzerland and Turkey, and are based on 15 quantifiable factors relating to:
- Labour quality and supply
- Labour costs and unit labour cost growth
- Tax and price inflation/deflation
- Difficulty in hiring and firing employees
- Labour flexibility
- Employee relations
- Foreign direct investment/state aid
The FedEE 2009 ratings
FedEE's top 5 rated countries for 2009 are the United Kingdom, Switzerland, Denmark, the Irish Republic and Sweden.
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Country |
Rating |
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United Kingdom |
+8 |
 |
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Switzerland |
+7 |
|
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Denmark |
+5 |
|
 |
Irish Republic |
+4 |
|
 |
Sweden |
+4 |
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The United Kingdom scores positively on labour supply, skilled manpower, lifelong learning, unit labour cost growth, income tax, consumer price inflation, ease of hiring and firing and working time flexibility and its only negative score was in the availability of state aid. Switzerland, Denmark and Sweden share high scores on labour capability, although three countries (Denmark, Switzerland and the Irish Republic) suffer from labour cost problems and two (Denmark and the Irish Republic) from labour relations problems. Sweden scores surprisingly low on childcare for pre-school children and also poorly on taxation and working time flexibility.
Although the factors used in the present review differ slightly from our last analysis in 2007 two countries - Denmark and the UK remain in the top five. However, Poland, the highest scoring country in 2007, has slipped back from a score of + 6 to -2.
This year, the lowest scoring countries are Romania (-8), Turkey (-8), Italy (-7), France (-6) and Spain (-6). Romania and Turkey both score highly on labour costs, but score particularly badly in fields such as the availability of skilled manpower and difficulty in hiring staff.
FedEE's analysis draws on the latest available data from three reliable sources - the European Commission's statistical agency Eurostat, the World Bank and FedEE itself. A full breakdown of all 15 factors for each of the 31 countries covered is available to members in the FedEE HR knowledgebase.
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