Using flexicurity to support specific groups of workers at company level

Newsletter articles

1 Sep 2012

Employment Studies Issue 16

Andrea Broughton, Principal Research Fellow

Supporting specific types of potential employee who may have particular problems in accessing and remaining in the labour market can be a way of both helping these individuals and ensuring a motivated and committed workforce. Recent IES research examined company policies that support young workers, older workers and women, in the context of flexicurity, showing the benefits that can be gained for employees and employers alike.

Flexicurity is a concept that has been a mainstay of European employment policy since the mid-1990s. Its aims are twofold: to increase employment opportunities for workers, while increasing flexibility in order to enable employers to adapt their operations to business needs. An essential ingredient of flexicurity is that both of these elements exist in a way that is mutually reinforcing. The flexicurity model was first developed in Denmark, based on the "golden triangle" of flexible labour laws and relatively low job protection, extensive lifelong learning and active labour market policies, and a generous social security system.

The past few years have been challenging for EU labour markets, however, due to the recession, which has had a negative effect on unemployment. This has called into question the effectiveness of the flexicurity strategy in supporting certain groups of workers which may be experiencing difficulties in gaining access to and remaining in the labour market.

In this context, IES carried out research for Eurofound, looking at company employment policies in six EU Member States (the Czech Republic, France, Germany, Italy, Slovenia and the UK). The research focused on examining the measures that companies in these countries have put into place that are beneficial to young workers, older workers and women, but which at the same time could be classed as flexicurity measures, as they contain elements of both flexibility and security.

The research examined 16 case study companies from a wide range of sectors in the six EU Member States. The measures in place and the context in which the companies operate were very diverse, due to national differences in areas such as employment policy, welfare policy, social dialogue traditions, and overall national culture. However, there were a number of overarching findings, set out below.

Key drivers for putting policies into place

We found that there needs to be a solid business reason before an organisation will put into place a particular measure. In the case of younger workers, the key drivers were a need to balance the age profile of the workforce and a desire for home-grown talent, thus avoiding costlier recruitment exercises on the open market.

In the case of older workers, companies often rely on the expertise of their workforce and therefore need to ensure that workers can carry on working as they age.

In the case of women, the main driver was a strong desire to attract and retain female talent in a tight labour market - the employer will therefore put into place the measures that the female workforce require, such as help with childcare and flexible working time arrangements, in order to become an employer of choice.

Main challenges

The three different groups of workers in this study all faced specific challenges in accessing and remaining in employment. In the case of young workers, the main challenge was the need to develop suitable skills and qualifications and gain the necessary experience. This can often be something of a catch 22 situation in that it is difficult to gain experience without working, but many employers are not willing to take on young workers without experience. The measures we looked at focused on training, apprenticeship and work experience, aimed at helping young workers to find a job in the wider labour market, rather than at one specific company, which corresponds to wider employment security, rather than job security. For the employer, these measures offer external numerical flexibility, ie enabling variation in the size of the workforce by offering longer-term employment to its apprentices if extra workers are needed.

Older workers face differet types of challenges, such as keeping their skills up to date in an ever-changing environment, countering employer perceptions that they may not be as capable, adaptable and flexible as younger workers, and coping with health and other physical challenges. The measures in place were therefore largely based on job security (providing tools and ways which enable older workers to remain in their job), and functional flexibility (allowing older workers to switch to different types of duties, for example less physically demanding work).

For women, the main challenge was trying to ensure that family responsibilities do not undermine their labour market chances, and the measures in the study are therefore based on improving combination security (ie how to combine work and private life), as well as providing some degree of internal and external numerical flexibility for employers and employees, in the form of flexibility in the organisation of working time.

Lessons learned

A number of themes emerged from the research. Firstly, we found that planning and preparation is paramount. Putting into place measures that have the potential to change the culture of an organisation need careful planning, if problems are to be avoided. This was seen most acutely in the case of PSA Peugeot Citroën, where the organisation needed to put into place a youth training and experience measure relatively quickly in order to benefit from state aid. The company acknowledged that it would do things differently next time, in terms of staggering the entry of the numbers of young people into the organisation, ensuring more geographical variety in the intake, and preparing the young people and also the overall workforce in advance.

Secondly, informing and consulting is important. Social dialogue at company level can smooth the process of implementation. When putting a measure into place, it is wise for employers to consult with trade union or employee representatives, partly for practical reasons - employee representatives are best placed to know the views of employees about what type of measures would help them, and what will fit in with how employees organise their lives. Further, if an employer consults the workforce, they are more likely to obtain buyin from their employees.

Thirdly, line managers should be trained and involved. In order to counteract differential treatment, based on individual line manager decision, companies need to train line managers to ensure that they are confident in implementing the measures on offer. Vodafone Italia is a good example of an organisation that recognises this and that carries out targeted training on diversity management for line managers. In addition, at University Clinic Mannheim in Germany, significant focus is placed upon manager training, especially in the areas of communication and leadership skills.

Finally, even application is vital. It is important to ensure that what is on offer does not merely benefit employees who are aware of it and can avail themselves of it easily. This is particularly the case in relation to training, which can often be picked up by those who arguably are not most in need. This can lead to an uneven application across staff of training measures, leading to a situation where those most in need of training and development - those with no or low levels of skills - are not receiving the training.

For more information on this work, please contact Andrea Broughton at IES.