Expanding 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 Many employers end up relying on subjective assessments or data that is often inaccurate and seriously out of date.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 supply
- Human capital
- Employee relations
- Inflationary pressures
- Labour costs
- Labour flexibility
The FedEE 2007 ratings
FedEE's top 5 rated countries for 2007 are Poland, Denmark, Slovenia, Switzerland and the United Kingdom.
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Country |
Rating |
 |
Poland |
+6 |
 |
 |
Denmark |
+2 |
|
 |
Slovenia |
+2 |
|
 |
Switzerland |
+2 |
|
 |
United Kingdom |
+2 |
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Poland scores positively on labour supply, labour relations and labour flexibility and its only negative score is in its level of internet skills. Each of the other top-rated countries share high scores on labour capability, although three (Denmark, Switzerland and the UK) suffer from labour supply problems and two (Denmark and Switzerland) from high wage costs.
Surprisingly, these findings are not reflected in actual levels of foreign direct investment - which raises the question whether companies are making the best decisions when they choose a European location. The latest UN figures show that none of the FedEE top five countries received the highest levels of inward investment as a percentage of GDP, with companies instead choosing Belgium, Estonia, Ireland, Malta and the Netherlands as bases for their operations.
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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