Guidance note on European HR trends
Europe accounts for one-tenth of the world's population. Two-thirds of Europeans live in countries that are members of the economic federation known as the European Union (EU). The proportion of the population (aged 15-64) who are employed in the EU is just 66.0%, compared to 69.3% in Japan and 71.5% in the USA.
The average employee in the EU works for 38.5 hours per week, 18% of the EU's working population works part-time, 14.8% are on temporary contracts and 5.1% of employees started their job in the last 3 months. 12.9% of the population aged 15-64 have undergone tertiary education and almost 10% of the EU population aged 25-64 take part in lifelong learning activities. EU citizens spend 12.2% of GDP on pensions and their average retirement age is 59.9 years.
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 - rationalising company car policies - maximising grants or subsidies.
- Control of overheads: relocation to lower-cost centres - use of teleworkers - cutting benefits - rationalising
back-office functions - expense account audits - 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 - time off in lieu (TOIL) - time banking - part-time working - fixed-term contracts - multi-skilled 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 - staged retirement - 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 - positive vetting - 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 - forensic audits.
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: Dutch-style arbo services - 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 - health and safety audits - 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 - emergency planning - biometrics - workplace security zoning.
- Personnel accounting: tax compliance - payroll procedures - IAS 19 - remuneration committees.
- Community: corporate social responsibility (CSR) - work experience - student exchanges - sponsorship.
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