1. The European Shipbuilding Industry Bright present, anticipating uncertain future 16 November 2006, Turku
Managing cyclical changes in the European shipbuilding and ship repairing industries: Evidence from across Europe
Xabier Irastorza
Research Officer
European Foundation for the Improvement of
Living and Working Conditions
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2. Study Dates Research Team Countries covered January – March 2006
National reports: National Experts
Consolidated report: EMCC
Countries covered
Denmark
France
Germany
Italy
Malta
Poland
Portugal
Spain
The Netherlands
United Kingdom
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3. Content
Introduction
Measures to deal with cyclical fluctuations in demand
Effectiveness of the various measures
Conclusions
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4. Introduction Shipbuilding and ship repairing:
Cyclical fluctuations in demand: intrinsic characteristic.
Inflexible production and service capacities.
Essential for European industries to:
Increase capacity to react flexibly.
Retain access to highly qualified workforce.
Crucial to find mechanisms to deal with cyclical changes in demand in a socially responsible way
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5. Content
Introduction
Measures to deal with cyclical fluctuations in demand
Effectiveness of the various measures
Conclusions
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6. Measures to deal with cyclical fluctuations in demand (1)
Goal
Adapt rapidly to changing market conditions.
Focus of report
Identify/analyse solutions aimed at:
Increasing the companies’ internal flexibility.
Retaining access to a well-trained workforce.
Caution
Transferability
Types of measures
Aspects to be taken into account
Working time arrangements
Changes in work organisation
Financial concession and support
Nature of cycle: short vs. long., downswing vs. upswing.
Temporary vs. permanent measures.
Measures used in combination.
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7. Measures to deal with cyclical fluctuations in demand (2)
Working time arrangements
Goal
Adapt volume of labour to demand variations through flexible distribution of working hours.
Tools
Overtime/short-time.
Working time accounts.
Differences
Overtime/short-time more complicated for employers: bureaucratic application, overtime pay.
Working time accounts: reduce wage bill / same flexibility.
Use
Uneven distribution across Europe.
No differences in use between two industries.
Work organisation measures more widely used.
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8. Measures to deal with cyclical fluctuations in demand (3)
Changes in work organisation (1)
Quantitative adjustment of workforce size to cyclical fluctuations
Outsourcing and subcontracting
Use of temporary workers and fixed-term contracts
Secondment schemes and staff pools
Qualitative adaptation of workers to cyclical changes by fostering their polyvalence (internal functional flexibility)
Training initiatives
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9. Measures to deal with cyclical fluctuations in demand (4)
Changes in work organisation (2)
Outsourcing and subcontracting
Focus on core competencies and respond to rigid regulatory framework
Goal
Reduce fixed personnel costs.
Externalise risk of cyclical fluctuations.
Main reasons
Technological justification.
Shifts in volume.
Cost.
Consequences
Increased flexibility / reduced fixed labour costs.
Coordination / loss of knowledge and skills.
Use
No clear pattern.
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10. Measures to deal with cyclical fluctuations in demand (5)
Changes in work organisation (3)
Use of temporary workers and fixed-term contracts
Increased flexibility while minimising costs due to reduced permanent staff
Temporary workers
Usually employed by an employment agency.
Fixed-term contracts
Directly by company for specified period of time.
Consequences
Employer: lower wages and fringe benefits than permanent staff / same problems as outsourcing.
Employee: dramatic decrease in employment security.
Use
More common among SMEs, ship repairing and subcontractors SIZE consideration
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11. Measures to deal with cyclical fluctuations in demand (6)
Changes in work organisation (4)
Secondment schemes and staff pools
Flexible adjustment within core workforce: company-internal and inter-company
Retain highly skilled workers
‘Adjusted’ skilled workforce to demand peaks/lows.
Split workforce cost among employers
Advantage for employers
Advantage for employees
Employment and income security
Sporadic. Germany, The Netherlands (Deltametaal).
Shipbuilding vs. ship repairing.
Use
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12. Measures to deal with cyclical fluctuations in demand (7)
Changes in work organisation (5)
Training initiatives
Improve workers’ capacity to adapt qualitatively to cyclical changes
Additional function
Attract new people to the industry
Relevance for industry
Long adaptation period of young workers
Shortage of skilled labour in both industries: employment cuts / ageing
Production cycle of shipbuilding
Country-specific and company-specific measures.
Cooperation with education centres/public authorities.
Use
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13. Measures to deal with cyclical fluctuations in demand (8)
Financial concession and support
Financial measures aimed at managing periods of weak demand:
Examples from several countries.
Public Income Support
Company specific agreements
Temporary cost reductions and increase in working time flexibility.
Employment security.
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14. Measures to deal with cyclical fluctuations in demand (9)
Summary
Working time arrangements
Overtime/short-time work.
Working time accounts.
Changes in work organisation
Quantitative adjustment:
Outsourcing and subcontracting.
Temporary workers/fixed-term contracts.
Secondment schemes and staff pools.
Qualitative adaptation:
Training initiatives.
Financial concession and support
Public income support.
Company specific agreements.
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15. Content
Introduction
Measures to deal with cyclical fluctuations in demand
Effectiveness of the various measures
Conclusions
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16. Effectiveness of the various measures
Heavily dependant on country and company-specific conditions.
Choice and effectiveness
Key role of training:
In-house.
State-provided institutional framework: essential for smaller enterprises.
Important framework conditions:
Legal and institutional context and traditional patterns of industrial relations.
Structure of industries: concentration and specialisation.
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17. Content
Introduction
Measures to deal with cyclical fluctuations in demand
Effectiveness of the various measures
Conclusions
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18. Main conclusions (1) Key factor
Size more than sector (shipbuilding vs. ship repairing)
Outsourcing and subcontracting, coupled with:
Technical measures.
More flexible use of own workforce.
Preferred method
Burden of cyclical fluctuations shifted to smaller subcontractors.
Greater precarious employment (temporary and fixed-term contracts).
Smaller companies
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19. Main conclusions (2)
No best way to deal with cyclical fluctuations in demand.
Tools
Dependant on country specific constraints, legal and institutional context and tradition of industrial relations.
Outcomes
Dependant on perception/strategies of social partners and the nature of their interaction. Willingness to cooperate essential. Role of the State.
Role of three actors in achieving increased flexibility while ensuring employment security at the same time.
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20. Thank you for your attention!
European Monitoring Centre on Change
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