1. SIMPLY CLEVER Employment Transition – Czech Experience From Business Perspective RADEK ŠPICAR EXTERNAL AFFAIRS ŠKODA AUTO, a.s. Implementig of flexicurity strategy in the economical crisis PRAGUE 03/25/2009

2. SIMPLY CLEVER Employment transition Czech experience from business perspective Škoda Auto in the Czech Republic:  The biggest Czech private company  Over 25.000 employees  Huge need for labour recruitment  Recruiting graduates from different types of schools and universities (workers, technicians, researchers…) 2

3. SIMPLY CLEVER Employment transition Czech experience from business perspective Czech educational system and labour market  Lack of apprentices traditionally strong role of industry decline of vocational school system  Lack of graduates and highly skilled experts Limited number of university graduates in population (only 14% of population, the OECD average is 27%) Inappropriate fields of study (lack of technical universities graduates)  Lack of support of soft skills and creativity Strong discrepance between the structure of graduates and needs of business 3

4. SIMPLY CLEVER Employment transition Czech experience from business perspective Employment rates for age group 15-24 Persons in employment as a percentage of population in that age group, 2006 or latest available year 4

5. SIMPLY CLEVER Employment transition Czech experience from business perspective Škoda Auto solution:  Own human resource development: Skoda Auto University (over 750 students, marketing and economy) Apprentice school (more than 900 students)  Modern HR tools, appropriate wage policy  Cooperation with government and local governments Solution for the whole economy:  Broader and deeper cooperation between universities and companies  Teachers and professors from real business  Internships in companies during the studies 5

6. SIMPLY CLEVER Employment transition Czech experience from business perspective Seniors on the labour market:  Aging of population in the Czech Republic: share of people older than 65 years shall rise from 14% in 2004 to 31,3% in 2050 Much more difficult for elderly people to re-establish themselves in career Inconvenient legislation 6

7. SIMPLY CLEVER Employment transition Czech experience from business perspective Employment rates for age group 55-64 Persons in employment as a percentage of population in that age group, 2006 or latest available year 7

8. SIMPLY CLEVER Employment transition Czech experience from business perspective  Solution in Skoda Auto:  Several programmes for older employees (50+ together with EC, health care)  Life-long employing  System of couching and requalifications  Solution for economy:  promotion, development and implementation of training, life-long learning and requalifications  Flexible forms of work (temporary, part-time and self-employment)  Appropriate legislation  Controlled migration (Green cards…)  Stimulating subsidies for unemployed people 8

9. SIMPLY CLEVER Employment transition Czech experience from business perspective Economic crisis:  More than 130.000 newly unemployed people from June 2008  Number of vacancies fell from 150 thousand to 65 thousand people  Companies don’t want to fire people, but are pushed to do so by rigid labour code Solution in Škoda Auto:  Shorter working time (four-days working week)  Lowering of temporary agency workers  Requalifications and shift among workplaces 9

10. SIMPLY CLEVER Employment transition Czech experience from business perspective Solution for economy:  Stronger flexibility in labour relations (preservation of existing jobs)  Esp. flexibility in adjustment of working time (system of work accounts)  Social systems supporting employment (motivating unemployment subsidies)  Support for other forms of employment (shorter contracts, fixed-time contracts, job sharing, home-working…) 10

11. SIMPLY CLEVER Thank you for your attention RADEK ŠPICAR radek.spicar@skoda-auto.cz