Restructuring in Sweden and the financial crisis #$% & "

Transcription

1 Restructuring in Sweden and the financial crisis!" #$% & "

2 Sweden and the financial crisis: A Swedish Sauna Party From an heated economy to a dip in an ice hole and back to the sauna again!

3 Real GDP growth rate Source: Eurostat Source: Eurostat

4 Announced redundancies per month Sept.2010 Source: Arbetsförmedlingen

5 Outcomes Dismissed workers often find new jobs 80 % find new jobs within 8 months Often without using the services of the Public Employment Services and unemployment benefits Unemployment benefits is an additional insurance in case of long term unemployment Unemployment hits those who enter the labour force

6 Increasing Youth Unemployment

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8 The Swedish model A small open economy Highly dependent on export and international trade Big business, big trade unions and big state Vulnerable to external economic shocks Small internal market Rehn-Meidner model: Solidaristic wage policy

9 Solidaristic wage policy: The Rehn & Meidner model Productivity i Market wage Profit Solidaristic Wage policy Need to move labour Firms

10 Restructuring in Sweden: Limited intervention by the state Regulative framework provides autonomy for social partners and a balance of power Strong employer prerogative to decide upon the size of the workforce Trade unions have the possibility to influence how dismissals take place Strong emphasis on collective bargaining and agreements

11 The Employment Protection Act 2 principles: 1) Employment for an indefinite period of time is the normal type of employment 2) Dismissals must be based on just cause. Collective redundancy and personal grounds Selection rules - Last in first out - Semi-disposive

12 Measures and tools for anticipation National level Forecasting institutions Regional level The case of Business Region Göteborg (BRG) Social partners Co-determination Early intervention

13 Co-determination Act (SFS 1976:580)

14 Measures for managing restructuring Very few measures to avoid redundancies Wage reduction in times of crisis is taboo Temporary lay offs and short time working in exceptional cases Based on collective agreements No state subsidies Dismissal and transition to find new jobs is priority Severance payments are not required by law No state subsidized early retirement Very limited labour market training But state subsidies for employers that employ long term unemployed or young job seekers

15 Support transition in the labour market Transition institutions Transition institutions

16 Job security councils: Non profit organisations Based on an Agreement on Transition between social partners Outplacement services are paid for by affiliated companies like an insurance policy. - The contribution is 0.3% of the company payroll for employees covered by the Agreement of Transition Offers continuity regarding expertise and management of restructuring problems Offers possibility to even out regional unbalances Offers support to dismissed workers in small and medium sized companies:

17 Job security councils and agreements Source: Bäckström, (2006)

18 Example TRR Trygghetsrådet Job Security Council: TRR Trygghetsrådet Founded in 1974 Non profit organisation Based on a Agreement on Transition between The Federation of Swedish Enterprise The Federation of Salaried Employees in Industry and Services Outplacement services are paid for by affiliated companies like an insurance policy. - The contribution is 0.3% of the company payroll for employees covered by the Agreement of Transition 32,000 affiliated companies with 750,000 employees Source: CG Ivarsson, TRR Trygghetsrådet

19 TRR Results TRR has supported 158,000 clients during the last decade 8 out of 10 of those who purposefully looked for a new career succeeded 8 out of 10 managed to find an equal or improved position 68 % received a permanent employment 10 % self employed 42 % were 50 years or older of those who found new jobs Average time to find a new job 5 months Source: CG Ivarsson, TRR Trygghetsrådet

20 90 % found a solution dismissed white collar workers used TRR services during the three first quarters of % found new employment 8 % started a new business 6 % chose to start longer education

21 The new job is often permanent Those who found new employment during the last 3Q 68 % open ended contract 32 % were 50 years or older 71 % received higher or equal salaries 86 % transferred to a higher or similar position

22 The TRR support process Early intervention Consulting Training Supporting companies and employees Follow up Based on a Transition Agreement Services are prepaid TRR is a Transition Partner Workshops Seminars and training Managers Union reps HR reps TRR Outplacement program Sharing experiences and results Source: CG Ivarsson, TRR Trygghetsrådet

23 Job Security Councils offer support also to SMEs Size of companies affiliated to TRR Job Security Council (2007) # Employees # Companies Percentage > % % % n.a % Total

24 Employer behaviour - Central Sectoral Restructuring Agreements - Local agreements established before restructuring - Employers offer transition programs - Activating measures: coaching, job search training, education, new business training - Prolonged dismissal periods - No obligation to work, but search for new job - Employer funded severance payments or early retirement - Selection for dismissal: LIFO, negotiated or voluntary - Restructuring can take place even when there is no immediate crisis

25 Four examples of transition programmes #!! "! $ %& " '(! %%)(! )(! * +,-.! %!! -., /, %!! -.,..,! 0!

26 Thank you for your attention!