This report has examined a wide range of issues related to restructuring, the impact that it has on sectors, organisations and workers, and the likely impacts of continuing restructuring. Crucial factors include how to best anticipate restructuring, and the best way to manage restructuring once a restructuring course has been decided, including the use of EU funds.
One of the main points of focus of the report this year has, inevitably, been the restructuring that has taken place as a result of the economic crisis of the past two years. There is a significant amount of information concerning the impact that the crisis has had on the EU labour market and the extent to which it has contributed to higher levels of restructuring across the EU. The EU institutions have a range of measures and tools designed to help organisations undergoing restructuring, largely in the form of funds, and these funds have been made use of by organisations that have implemented restructuring programmes over the past two years in the context of the crisis.
Although the recent crisis has thrown the issue of how to manage restructuring into sharp relief, it should not be forgotten that restructuring is a part of everyday business life with which organisations need to engage if they are to remain competitive in an increasingly globalised market. Anticipating and managing restructuring will therefore continue to be issues that need to be addressed at EU level, at the level of EU Member States, at sub-national level and at the level of the individual organisations undergoing restructuring. Once the recession is over and the European economy begins to grow once more, however, the shape and focus of the economy is likely to continue to evolve, due to the future challenges facing the EU in areas such as continuing industrial restructuring and industry rebalancing, the emerging green economy and what this will mean for all sectors, but particularly transport and energy, and demographic challenges such as the ageing population.
More than ever, there is a need to ensure that skills and competences are kept up to date with all of these trends, not just in an environment of restructuring, but throughout the length of individuals’ careers. There is therefore a significant focus on skills and competence development in this report, focusing on the issues of lifelong learning and the types of skills development that will be needed to meet the future challenges faced by the European economy. Going forward into the next decade, the European Commission has highlighted skills and competence development as a key feature for its Europe 2020 strategy.
The European Commission has initiated a range of actions over the past 15 years that have had the aim of trying to help organisations and stakeholders to manage restructuring in a way that has the least possible negative impact on workers, their families and the surrounding community. These include two consultations to the EU-level social partners on the issue of managing change. There is now a will at EU level to further and to try to devise some kind of over-arching framework for restructuring at EU level: in its Communication on industrial policy, issued in October 2010, the Commission stated that ‘updated orientations on restructuring can be very useful in reinforcing the capacity of businesses and workforce to adapt to a fast-changing economic environment’.230 The European Commission has also, over the past two decades, funded a wide range of research, in the form of studies or analyses concerning the identification of good practices, measures or actions to better anticipate the restructuring and manage it in a responsible way. There is a significant degree of convergence between the good practices and actions highlighted in these studies, enabling the following key messages to be identified, as set out below.
1: TEN TENTATIVE LESSONS ON THE ANTICIPATION AND MANAGEMENT OF RESTRUCTURING
An analysis of the above reports and studies on the subject of restructuring and labour market transitions gives rise to a number of key messages relating to the anticipation and management of restructuring. These tentative conclusions are contained in the table 8.1 below, which shows each lesson learned and the documentary sources for this lesson, based on the numbers given to the studies set out below the table.
Table 8.1: Ten key tentative lessons on the anticipation and management of restructuring
Lesson
Documentary sources
Measures to anticipate and manage restructuring are influenced by factors such as national culture, national industrial relations and employment systems, national welfare and social security systems and national skills and training strategies. Nevertheless, there are distinct and clear possibilities for the translation of initiatives or elements of initiatives across borders, adapting them to different national contexts.
There is a significant variety of country-specific backgrounds and experiences, depending very much on the respective traditions and frameworks of welfare state rationales and industrial relations (1).
Many tools and measures have been put into place by Member States in the context of the crisis (2).
Career choice and career development are extremely diverse around the EU (4).
There are persisting national differences that make translation of good practices from one country to another difficult. Although it is probably not possible to transfer whole tools, there is a case for looking at the functional equivalents of tools in different countries. For example, many mechanisms are composed of basic tools or measures which are often similar across Europe, such as individual profiling, skills assessment, personal action plans, job clubs, training for job search, individual or group coaching during the search process, support for business creation and training offers. It is important to focus on what is done instead of who is doing it and how (7).
Member States differ greatly in terms of the types of measures that they adopt to anticipate and manage restructuring. However, there is the potential for the transfer of experiences from Member States with more developed toolboxes for restructuring (8).
The exporting of entire systems of system-dependent processes should be discouraged. However, there are micro examples of practice that can be considered for adoption in the context of differing national environments and systems of employee relations (10).
The quality and maturity of enterprises’ arrangements to support workers are affected by the variable starting points for different countries (12).
Active social partner involvement is crucial in many of the schemes available to anticipate and manage restructuring.
Many of the schemes in existence would not be able to function without the involvement of the social partners at all levels (1).
Collective bargaining and other forms of bi- and tripartite bargaining, negotiation and dialogue are one of the most important tools of anticipating and managing changes at all levels (6).
Social dialogue is a key tool in the anticipation and management of restructuring (8).
The active engagement of the social partners in the anticipation and management of change at all levels improved performance in the design of change management architecture and in restructuring practice (10).
The involvement of social partners in the design and implementation of flexicurity policies through social dialogue and collective bargaining is of crucial importance (12).
A wide range of actors participating in measures is a strengthening factor. Partnerships can provide a wide range of expertise and human resources to support organisations that are trying to manage restructuring. This can also limit the effects of restructuring on the wider region, community and employees’ families.
A multi-actor approach is invaluable, in terms of career guidance and competence development support (4).
A range of knowledgeable partners are needed in order to promote healthier restructuring (5).
The multi-actor approach with strong interconnections between actions at different levels is extremely important (6).
Multi-actor collaboration is of importance through all the stages of restructuring, and partnerships at regional, national and sectoral level are essential ingredients for dealing with the issues and concerns that are related to restructuring (9).
SMEs have specific challenges when engaging with the anticipation and management of restructuring in a socially responsible way. They often lack the resources, both financial and in terms of personnel, to go much beyond statutory compliance.
Although SMEs cannot develop socially responsible practices on their own, they can be supported in this task by publicly funded strategic arrangements and regional partnerships. There may therefore be a case for targeted public support for SMEs in terms of career progression and skills development (4).
SMEs do not have the same internal HR resources as larger companies and often lack the necessary knowledge about external support offers that might facilitate and ease the process of organisational restructuring. External collaborations are very useful for organisations, and particularly SMEs (5).
There are a range of tools that can be used by SMEs to help them to anticipate and manage restructuring. These include outplacement, a range of training offers, local and regional employment pacts that cover SMEs, and schemes that validate skills and competences (7).
There is a gap between large companies and SMEs regarding anticipation, social dialogue practices and the support given to workers when made redundant. Many restructuring models are not appropriate for smaller companies and there is therefore a lack of support for SMEs (8).
It is often said that small and micro enterprises are the engines of economic growth and act as shock absorbers at times of change, but it is clear that the role of small and micro enterprises in the economy and the issues they face in restructuring are more complex (10).
There should be fair allocation of resources regarding short-time and temporary lay-off schemes, with specific attention paid to the needs of SMEs (10).
Anticipation of restructuring is a powerful tool that can limit the negative effects of restructuring. However, there needs to be a greater emphasis on anticipation and preparation of restructuring.
Anticipation of likely future needs for career guidance is a key issue in supporting socially responsible practice (4).
There needs to be more health monitoring and prevention in a coordinated way (5).
True anticipation initiatives were only to be found in a limited number of EU Member States, and their effectiveness depends on timeliness and good-quality data (8).
Actions that focused on the ‘before’ stage of restructuring have entailed a more proactive approach and have been able to minimise the negative social impacts of restructuring (9).
Anticipation of change is crucial if sudden and unexpected workforce shocks are to be avoided and restructuring take place against timescales that facilitate both organisational change objectives and the delivery of acceptable solutions for affected workers (10).
European funds play an important role in some of the newer EU Member States and in southern Europe.
These funds play a vital role in funding transition schemes and are therefore of vital and continuing importance to these countries, some of which are still in the process of shifting the focus of their economies away from over-reliance on traditional heavy industry (1).
EU funding is relied on by some of the newer EU Member States in the development of measures to anticipate and manage restructuring (8).
While redundancy should always be a last resort, active measures should take place over passive measures.
One of the key long-term strategies should be ensuring the sustainability of labour supply. This implies, for example, that early retirement not be readily facilitated (3).
Severance payments, while attractive to individual workers, are not a long-term measure. When designing a severance package, elements such as retraining and competence development should be included. Similarly, there should not be any over-reliance on early retirement (8).
Training is a crucial and core issue when considering the anticipation and management of restructuring.
A more general access to support for training is desirable, with a focus on skills and competences that will be needed in the future. Such a future skills orientation might require occupational change and substantial retraining (3).
Career guidance and continuing training are vital components of socially responsible restructuring (4).
Training, skilling and reskilling are seen as key to anticipating or accompanying restructuring in order to avoid unemployment or to facilitate a rapid return to the labour market (8).
Training and other human capital measures, such as mentoring, are key tools in the management of restructuring, allowing individuals to develop their skills, and deal with their own personal employment situation (9).
The social partners in every participating country highlighted current skills mismatches and/or the future skills needs to support the changing economy as key issues for the social partners and for government. In the longer term, these issues have to be addressed through more, and more effective, investment in education and training at all levels. In the shorter term the issues of lifelong learning and migrant workers need to be tackled (10).
The impact of restructuring on the health of the individuals concerned should be monitored closely, and negative effects, such as psychosocial impacts but also physical impacts, should be mitigated as much as possible. This concerns those who are made redundant, those overseeing the redundancies (line managers) and the ‘survivors’ of restructuring.
Healthier restructuring needs conscious stakeholders and leaders and a proactive health policy, with collaboration from both within and outside the organisation. It is clear that organisational change is always a potential stress factor. If employee stress levels can be monitored, specific preventative health measures can be put into place to try to avoid or mitigate the negative impact of restructuring on employees’ health (5).
Although a range of innovative policies and practices have been highlighted by all these studies, at national, regional, sectoral and organisational level, there is a general lack of coordination and coherence in terms of the implementation of socially responsible restructuring. For example, in terms of anticipation, it is vital that the information collected by early warning or forecasting systems is passed on in a timely fashion to the relevant stakeholders in order to ensure that it is put to full use. In the management of restructuring, all stakeholders, such as employees, employers, employee representatives, local authorities and training providers need to work together to ensure that employees facing job loss are provided with career guidance, appropriate training and competence development and outplacement support. More emphasis therefore needs to be placed on coordination of measures.
Good coordination from all the actors is needed in implementing career guidance and skills development policies (4).
The availability of measures to support the transfer of redundant workers to new jobs is limited and uneven across Member States (8).