Can the European social model help firms recover?
30 May 2012
How often do HR professionals in the UK get asked to brief their senior teams about the impact of the European social model on their business? Unless they have operations in the EU, or have European Works Councils, my guess would be not very often. Some might even argue that the European social model – with its emphasis on social dialogue and social partnership – illustrates the stark differences between the so-called Anglo-Saxon approach to business and that taken by our colleagues on the European Continent.
For two fascinating days last week I got the chance to assess the reality of these apparent differences. I was participating in the second annual European HRD Circle event in Lisbon. The HRD Circle is a small group of European HRD Directors, trade union officials and employment and labour market researchers whose mission is to “improve corporate social dialogue and responsibility in Europe.”’ I had been asked to contribute some reflections on the impact of job quality on performance and productivity from the UK based on our work with the Good Work Commission in 2011. The paper I presented was based on several previous studies from The Work Foundation.
The discussion and debate which we had as a group was truly enlightening and made me wish that there were more than just the single UK representative present to hear the very challenging and thoughtful contributions. The event raised a whole raft of issues for me in the current climate, but for the purposes of this blog I’ll confine myself to just three themes.
First, it’s become axiomatic in parts of the UK private sector, and certainly among some policy-makers, that trades unions are in terminal decline, that they are predominantly backward-looking, unimaginative and are ossifying. Yet in Germany - the European economy which is propping up much of the Eurozone and delivering the export-led growth which the UK so covets – social partnership is part of the fabric of the way business is done, the way many decisions are made and the way apprenticeships and vocational training is designed and delivered. Ideas like consent, consultation and co-determination are common currency. The excellent examples of UK car plants such as Honda in Swindon and the latest Vauxhall deal in Ellesmere Port are hailed here as groundbreaking models of business where management and unions join forces to ensure survival and growth. But for many years, this approach has been a widespread part of the institutional landscape of German industry. The German participants in the HRD Circle were the first to warn that wholesale ‘cloning’ of, for example, the apprenticeship system into other countries will never work, but I couldn’t help thinking that recessions are a good time for social partners in any economy to come together to find solutions to the problems of survival, cost-reduction and productivity growth. There should be more that unites management and unions than divides them.
Second, and it’s easy but simplistic to attribute this to the strong French presence at the event, the tone of the debates we had was probably more reflective and philosophical than would normally be tolerated in a UK-only event – especially when HR Directors are being pressed to deliver savings and efficiency. Speaking to a couple of French HR Directors, it was clear that this approach was far beyond an intellectual indulgence. They saw the chance to debate issues such as youth unemployment, the challenges in the Eurozone the impact of employment protection regulations as a vital part of their ‘horizon-scanning’ activities: probably the only time they get each year to raise their gaze above the intensity of the ‘here and now’ or today’s crisis to look closely at some of the wider economic, social and labour market issues which will be facing their businesses in the next decade. Well worth, they argued, two days of their time.
Third, there was not even a hint of the ‘sweat your assets’ approach to HR at any stage of the proceedings. While many of the firms represented had undergone recent restructurings, closed sites and made posts redundant, a strong emphasis of the debate was how the European social model offers just one of several frameworks within which sustainable and responsible businesses can be built and allowed to flourish. Again, while there are strong echoes of this philosophy in many UK businesses, I couldn’t help thinking that – in the week that the Beecroft Report had caused so much polarised debate back in the UK – it would be nice to downplay the ‘slash and burn’ tendencies which characterise so much of the current debate about how to stimulate growth. I expect some of these issues will be aired tonight as part of The Work Foundation 2012 Annual Debate: Does the economy need a new kind of business?