European Company Survey 2019
Is there a price for success? Are there win-win solutions for both employers and employees to achieve organisational success? These are some of the highly exciting issues we discuss today with our two guests, Giovanni Russo of Cedefop, and Gijs van Houten of Eurofound, who share with us the key findings of the fourth edition of the European Company Survey 2019: Workplace practices unlocking employee potential, jointly carried out by the EU agencies.
Eurofound and Cedefop joined forces to carry out the fourth European Company Survey (ECS) in 2019. What follows here is our conversation, in which we discuss the findings of the Survey, with Gijs and Giovanni - edited for length and clarity. To find out more about the Survey visit the Eurofound or Cedefop websites.
Agnes Uhereczky: Let's just dive into the fourth European Company Survey (ECS) 2019 which is, in fact, a collaborative work between Cedefop and Eurofound. For the interest of our listeners, I wanted to highlight that we have had guests from Eurofound on our podcast earlier, but this is the first time that we have somebody from Cedefop, a European agency. The survey was published in a report in October 2020 called 'Workplace practices unlocking employee potential'. Gijs, if you could please tell listeners briefly how this research work comes together and a little introduction to the report that would be an excellent start?
Gijs van Houten: The European Company Survey is a survey of establishments. By establishments, we mean the local units of businesses. So we are interested in what happens at the local workplaces. So, not the company policies but rather the practices. As you already indicated it was carried out jointly by Eurofound and Cedefop which was a new thing. Our agencies hadn't done such large scale collaborations before. The survey collects information on workplace practices with regards to work organisation, human resources management, skills use and development of skills, as well as on employee participation and by that we mean direct participation of employees as well as the workplace social dialogues with trade unions and work councils.
Interviews were carried out with almost 22.000 managers and just over 3.000 employee representatives in all the 27 European Member States, and the United Kingdom. It was the first time that a large business survey like this one was carried out with what is called the push-to-web methodology. That means that we contacted the businesses via telephone then identified the respondents that we were interested in interviewing and sent them a link to carry out the survey online. In the analysis, we tried to look at what practices businesses have in place. As I mentioned, we cover a range of topics and we would like to know what it is that businesses are doing but we are particularly interested in how they combine practices across different areas. So whether in how they design their work organisation, how that ties in with how they manage their human resources, how they deal with training and learning, as well as how they deal with employee voice. We also want to see to what extent the way they combine these practices is associated with outcomes. We look at outcomes for workers, as well as for, employers and we are particularly interested in what we call win-win outcomes. So businesses that manage to generate outcomes that benefit both workers and employers at the same time.
In addition to that we also look at innovation, digitalisation, and product market strategies, so to see in what context businesses are operating and how these megatrends are associated with what they do and how they design the workplace.
What the survey shows is that it's possible to design your workplace in a way that benefits both workers and employers.
When you bundle practices that increase employee autonomy, facilitate employee voice and promote training and learning you are more likely to boost your performance while at the same time improve workers job quality. Also, we find that businesses that apply such an integrated approach also perform better in terms of being more highly digitalised, being more innovative. What I think that it is an interesting finding is that although we do find that this type of, let's say high-road workplace design, is found in more in those businesses that aim to compete on quality and innovation, it is also found in quite a sizeable proportion of businesses that aim to compete on price. So even though they try to be cheaper than the competition they still manage to design the workplace in such a way that both the performance of the business as well as the wellbeing of the employees' benefit.
We also found a very clear association between direct and indirect employee participation.
By direct what we mean is that the participation of employees through direct representatives be at trade unions, delegations or work councils. We have also found that both these types of participation, if they function well, within the workplace is also associated with positive outcomes for both employers and employees. So, it seems to be a business case for facilitating employee voice and it also suggests that if we are looking to promote this type of practices there is a clear role for social partners in terms of improving workplace practices.
Agnes Uherecky: Now, let's look into the angle of investing in skills and training. From Cedefop's point of view, why is it interesting to ask these 22.000 businesses around how they train, what they train on, and how the skills situation looks?
Giovanni Russo: Cedefop shares many of the features of Eurofound such as our organisation is also a tripartite organisation. But our angle, in the survey, was a bit different because we were growing a certain level of unhappiness with the current approach to skills which sees, from the one hand, employers claiming that they can not find the skills they need or hindered by the lack of skills, and on the other hand, policy-makers focusing on skills at employees and promoting employability. So shifting the responsibility for the investment on skills on the employees very much. For us it was obvious that it is hard to hire good people, it has always been. But the main point is that even if you hire good people it is the context around them that influences their behaviour. So, for us, if one draws on one skill is more a matter of context then expectations maybe, opportunities and motivation is not so much the lack of skills. So we wanted to take the context back into the discourse. Skills utilization is all about having the opportunities and the motivation to draw and use one's skills. These tend to be matters of how jobs are designed and the wider organisational context. The context, however, is not something that is fixed and it stems from the organisational culture, it is shaped by managerial decisions, so this is why we wanted to put these elements back to the policy discourses.
Agnes Uhereczky: Were there any findings in this fourth edition of the survey that were surprising, something that you did not expect to find at the beginning of the work?
Giovanni Russo: We have been building this questionnaire and the survey standing the shoulders of giants, so some people have investigated this field before us. So, we weren't surprised by the results. That was something that was already in the literature and the path had been laid for us in a sense. We knew that we were going in a certain direction. This said I think I was surprised by the degree of coherence of our results between all studied blocks. This is a strong point in our research. So we have a block on autonomy, investment and training, motivation, they all give the expected results, and they all come together with the block on employee involvement to deliver the outcome. I think this was exceptional. Also, the importance of managerial support across all phases came out nice and strong. This might be an open door or something that is part trivial but if you look at the amount of attention that has been given to the context and managerial roles into the policy discourse, this is something new. I think, also to get back to your second question, we find this in all sizes of companies and all countries. So I think that these are common patterns that can be played out at all levels, perhaps under different configurations, but they are all helpful and help across, doesn't need to be a supergiant company with fifteen branches in 24 different countries and thousands of employees all bright and young. This works everywhere, and this is a nice result I think.
Agnes Uhereczky: Giovanni, let's focus on training and skills development. What were the findings in the study in terms of employers' taking their responsibility to provide training opportunities to employees?
Giovanni Russo: Let me first begin at the end of the question, which is something completely different, the outcomes. What we do is that we link our models to outcomes. What I would like to point out is that these outcomes are very real for employers. So when we talk about outcomes we talk about things like the ability to retain employees, the ability of the organisation to be profitable, the containment of sickness leave, or to have good relationships between managers and employees so these are very real outcomes. These outcomes are indeed linked to the way companies or organisations use their employees' skills and knowledge.
What it means to take this responsibility seriously is a matter of culture and education - organisational culture, because we see that we need managerial support across a number of areas. So you need to have support for autonomy if you provide autonomy, support for training if you give training, support for involvement when you involve employees. Organisations and managers need to see that their employees have the knowledge and this knowledge can be used as a source of competitive advantage. The other important thing is education, because if you want to try to move companies from one group to another - towards the better groups so to say - something needs to change.
The place where something needs to change is managerial styles, the way through which managers handle human resources.
My personal view is that a lot of managerial education is technical so it is about problem-solving, production problems, organising schedules, finding new markets, organising the introduction of new products, marketing… all these. The human resources part is a kind of after fall, but during the 90s when organisations became better and flattered a lot of these responsibilities in terms of human resources management has been pushed to the line managers. These people used to solve technical problems, many of them coming from the ranks of engineers. So there has been a kind of disconnect there because they were left to their own devices and we must recognize that managing people is the hardest task. If you have kids you know what I mean. So I think we need a lot of support for managers, this can not be left alone, they need to be supported in these kinds of transitions. We also have to recognize, at this very moment, that this class is probably under huge amounts of pressure because of the crises. So support might be real there, and we can see that employers' associations and chambers of commerce have been involved in such efforts.
Agnes Uhereczky: Gijs, can you maybe tell us a little bit about the different aspects of the findings? I was quite interested when I read the report about innovation and employee wellbeing that you mentioned at the beginning of the conversation, and especially companies that take the high road.
Gijs van Houten: Yes, in our report these are high investment, high involvement businesses. We show that it is possible to generate good results while also improving the job quality and the wellbeing of employees. It doesn't mean that it is not also possible without, we just exhibit that it is possible to do so, and we would argue that it is preferable to do so.