Firms need both flexibility and commitment from their workers. A contradiction? Apparently not, so long as they are engaged as stakeholders, according to a diverse range of new reports just published.
EMPLOYEES SHARE OWNERSHIP
The share prices of companies with high levels of employee ownership have outperformed conventionally-owned companies by 89% since 1992 compared to the FT All Share Index. This analysis, based on 30 companies including F.I.Group and National Express, was published on April 28 by Capital Strategies, a finance house specialising in ESOPs and other forms of employee ownership. A similar study in America, based on 350 companies, found performance also exceeds market indices but by a lesser amount. Contact Nigel Mason, Capital Strategies, on 0171 256 8000
CHANGED EMPLOYMENT COMPACT
European companies want commitment and trust from their employees, while employees are looking for interesting and challenging work, open two-way communication and opportunities for growth and development. These are the headline findings of a survey of nearly 100 company members of the Conference Board Europe, published in April as Implementing the New Employment Compact. This found that the old paternalist model has broken down, with two thirds of companies (67%) saying the nature of the employment compact has changed in the last decade or two, with only 6% saying job security still exists. Contact Conference Board on 00 32 2 675 5405
CONSULTATION COUNTS
On average eight in ten (81%) European firms engage their workforce in some form of direct participation, a survey of over 5,000 firms in ten countries has shown. More than half (55%) have formal systems for representation. The survey was conducted by the European Foundation for the Improvement of Living and Working Conditions and discussed at a conference in Amsterdam on April 10-11. Evaluation of the results showed that companies undertaking consultation achieve greater reductions in costs, sickness and absenteeism rates and employee numbers. Contact Maureen O’Brien, EFILWC, on 00 353 1 282 6888
EUROPEAN GREEN PAPER
Improved employment and competitiveness can be achieved by better organisation of work at the workplace, based on high skill, high trust and high quality. That is the thesis behind the new European Commission Green Paper, Partnership for a New Organisation of Work, published on April 16, which aims to stimulate debate on how to combine security for workers with flexibility for firms. The paper includes consideration of lifelong learning, new approaches to working time, equal opportunities and environmental issues. Contact EU Commission on 0171 973 1992
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As with environmental issues, so with employee involvement: the narrow agenda of community affairs is being stretched. Previously charitable donations and matched staff fundraising were seen as low-key ways for the company to demonstrate its values and to show it shares employees’ cares. That remains very true, but now inclusive companies which follow a stakeholder philosophy need active engagement with staff across a broad range of their concerns. The need is to boost productivity and retain flexibility over the long run, not just from the short-term fear factor of “perform or you lose your job”.
This ‘social agenda’ is running strongly in Europe and the new Labour UK government is instinctively keen to join in. However the process can very easily degenerate into mere systems and rules, with adherence to the letter of the law, not the spirit. In fact, this must be an inherent part of the core values of the firm. No amount of imposed regulation can force a company to engage constructively with staff and respond positively to their concerns. Staff, unlike all other stakeholders, are internal and can see through double standards immediately.
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