An international conference on management of change and restructuring was held in Ljubljana on December 18, 2012. This was the final event of the project "Network Proactive Management of Change and Restructuring" (Network ProMCR).
Participants at the conference included representatives of the government and employment services, decision makers for national policies of labour market management, representatives of employers, employees and entrepreneurs, as well as project partners from three countries: the Czech Republic, Hungary in Slovenia. The conference thus concluded an important year in terms of disseminating information about the obstacles and issues different companies might face in the process of management of change. The goal of the project - co-funded by the European Commission - was first to analyse and document the current situation in companies regarding changes and their management, and then to carry out a series of educational activities and awareness-raising activities aimed at improving change management processes.
Intensive one-year project
Conference participants and guests were first greeted by ZDS Secretary General, Mr. Jože Smole, who expressed his satisfaction with the fact that different stakeholders were willing to adopt important measures in restructuring. The structural flaws which failed to be efficiently dealt with in the period leading up to the economic crisis are becoming increasingly apparent. A system based on the concept of employment stability is failing to provide the workforce with a sure career. In fact, permanent employment jobs are becoming fewer in number because management of change is very difficult with this type of employment. Therefore, management of change calls for a determined approach from all stakeholders, including employers, employee representatives and public institutions. The one-year project was extremely intensive, not only due to the broad scope of implemented activities but also in terms of contents and the conclusions reached as a result of the project. Study results and best practice examples found in the publication "Planning and Management of Change" will serve employers as trusted starting points in management of change processes. Also, the added value of the project is that all participating parties receive professional support in planning and implementing the necessary measures and change-related activities (the publication is available at the ZDS web site: http://www.zds.si/si/publikacije).
Labour Law Amendments
Minister of Labour, Family and Social Affairs of the Republic of Slovenia, Mr. Andrej Vizjak, discussed the amendments to the Labour Law aimed at increasing flexibility and reducing labour market segmentation. According to Slovenian and foreign institutions, a high level of employment security in Slovenia makes the labour market extremely inflexible. The European project initiative for the system of permanent contracts has not been received well by either employers or trade unions, resulting in the Ministry's proposal for a modification with the intention of 'softening' the level of employment security and regulating the issue of permanent vs. contractual employment. Dismissal for reasons of fault and for business reasons will not be burdened by long administrative procedures and high expenses. Further, the complicated procedures for notification of decisions and for seeking new employment following dismissal for business reasons will be simplified, severance packages will be reduced and notice periods shortened. In dismissals for reasons of fault, procedures will be faster. Overall, the proposed labour law amendments encourage employers to give their employees permanent employment contracts, with fixed-term employment becoming the less attractive option. Agency work will become limited to a maximum of 30% of employees in a company out of the total employee count, and subsidiary liability of the agency and its users will be introduced. Finally, the Minister introduced measured aimed at increasing internal flexibility: the instrument of wage reduction for employees who are temporarily laid off, and the possibility of a temporary transfer to a new position without the employee's consent when this is justified by retaining the same number of jobs or if the company is undergoing major reorganization. The proposed labour law also encourages trial work periods and the employment of older persons.
Planning and managing restructuring
International Labour Organization (ILO) representative Christian Hess discussed the restructuring approach according to the international standards, conventions and recommendations. Importantly, the approach to restructuring has to be realistic, constructive and responsible, with the emphasis being given to employability rather than job protection. It is crucial that social partners establish trust and strive to achieve a win-win situation, while public authorities must offer efficient support, particularly to small and medium-sized enterprises.
Results of the study conducted for the project revealed that, despite the differences in size, branch, internationality, etc., companies emphasize and recommend similar measures when it comes to the implementation of activities aimed at management of change. Anže Hiršl, project manager of Network ProMCR, summed up the key concepts of restructuring:
changes have to be planned well in advance and long-term;
goals and methods should be clearly defined;
transparency of measures;
appropriate communication;
legitimate goals and methods.
In his presentation, Mr. Hiršl informed the participants about project activities aimed at improving the overall level of change management. In addition to identifying important starting points for high-quality management of change, the project also revealed several obstacles and unfavourable circumstances hindering the planning and application of specific measures. Some of the obstacles relate to the provisions of the yet-to-be-finalised labour law, such as the management of working hours, the procedures of new employment and dismissal, etc. Public institutions are conducting activities to assist companies in management of change and in obtaining employees with the right work profile. However, according to Mr. Hiršl, the project showed that there was vast room for improvement in the effect of their endeavours:
companies desire content-specific educational and training programs, which is why the flow of information between companies and educational institutions should be increased;
measures implemented by Employment Service of Slovenia should follow the actual needs of companies in terms of their contents;
for most employers, administrative procedures represent a great challenge, so many companies fail to participate in ongoing programs. Moreover, employers are not informed well of the available co-financing programs.
Management of change calls for a determined response from all stakeholders: employers, employee representatives and public authorities. Some of the stakeholders were given concrete recommendations and thus called on to take action. Mr. Hiršl called on public authorities proposing new laws to cooperate with businesses, to establish closer cooperation between the educational system and the industry, to simplify the programs for employers, and to amend the labour law, making it easier for employers to adapt to changes on the market and to fluctuation in demand. Employee representatives were called upon to participate; trade unions can offer employers important support in the implementation of specific measures during management of change. Although employers must always include trade unions in the decision making processes concerning employees, we must not forget that employers are the ones who adopt the final decision and stand responsible for it, so they should have the final say. Further, Mr. Hiršl advised employers to plan all work process changes in advance as much as possible, because this makes the necessary measures less severe and their negative connotation reduced among employees. To conclude, Mr. Hiršl stressed the importance of transparency, communication, and education and training programs.
Results of the study conducted for the project were also presented by representatives of partner organizations: Adrienn Bálint from BUSINESSHUNGARY and Bohuslav Čižek from the Confederation of Industry of the Czech Republic.
Next, Executive Secretary from the Association of Free Trade Unions of Slovenia,
Mr. Marjan Urbanič, discussed the features of restructuring and management of change from the perspective of trade unions. He summed up the competences of trade unions and works councils in communicating information and acting as consultants on status issues and human resource issues. Moreover, he emphasized the problems faced by small companies that lack all the necessary information and have limited access to financing sources, and their consequential problems in implementing effective restructuring.
Mr. Vilijem Spruk from the Employment Service of Slovenia, Mr. Karel Petrželka from the Confederation of Industry of the Czech Republic and Mr. Tibor Bors Borbély-Pecze from the National Employment Service Hungary discussed the different measures carried out by labour offices to assist companies in the restructuring process and by public authorities to influence the labour market (active employment policy, proactive approach and the adaptation to conditions during the economic crisis).
Experience of companies with management of change
Best practice examples in management of change were presented by representatives of two medium-sized companies from Slovenia and Hungary.
Mr. Roman Macun from a Slovenian window and door manufacturing company Gašper d.o.o., the business of which is closely linked with the construction industry, discussed how the company implemented reorganization - with modernization and restructuring - by first being well prepared for these processes. Before introducing the changes, a thorough overview of business operations was conducted and the goals were clearly defined. Within the restructuring process, special emphasis was placed on formulating a future vision and priorities, in addition to the necessary values, thus laying the foundations for further change implementation. When it came to formulating values, communication with employees and the consequent harmonization of starting points were of utmost importance. After all, changes have to be accepted as something which is necessary and positive.
The founder and Executive Director of the company KÓD Kft. Mihály Kuti discussed the responses to new circumstances on the electronic components market. He introduced the company’s development and explained the ways in which it was adapting to change. Despite the economic crisis, the company remains successful and continues to grow by adopting appropriate adjustments and constantly looking for new business opportunities. To conclude, Mr. Kuti stressed the importance of adapting business operation and taking advantage of the opportunities offered by information technology.
The project Network ProMCR is co-funded by the European Commission.