European Competitiveness In Peril As The 'Right' People Reluctant To Work Abroad

A growing mismatch between employers' demands for an increasingly mobile workforce and employees' willingness to work abroad is threatening the international competitiveness of business in the EU, warns a new report 'Managing mobility matters - A European perspective' by PricewaterhouseCoopers and its correspondent legal practice Landwell.

While 70% of businesses surveyed across eight European countries expect their need for mobile employees to increase over the next five years, nearly half (48%) admit they are already experiencing problems in recruiting senior staff. By contrast, a MORI survey of more than 8,000 individuals in the same eight European countries shows that only 17% would like to live and work abroad, and most of these are young and inexperienced .

Kevin Delany, partner, Human Resource Consulting at PricewaterhouseCoopers, said:

"These results act as a wake-up call to business to put strategy for international labour mobility high on the corporate agenda, embrace new flexible ways of employing a mobile workforce, and consider the needs and expectations of a new generation of potentially mobile workers."

"Companies need clear strategic reasons for sending staff abroad and recruiting from other countries. Otherwise they will lag behind their more enlightened competitors, losing their most valued employees in the race for talent, missing out on the creative benefits of employee diversity, and on new flexible ways of cost-effectively staffing a business. Companies find they can no longer count on the loyalty of their employees."

Nearly two thirds of firms surveyed agree that "there is no skills shortage in Europe - people are just in the wrong place." The problem for business is that while individuals want to move to countries such as Spain, France and Italy, this merely exacerbates the shortage of skills in other parts of Europe where the labour market is already tighter.

Business also warns that many costly and obstructive barriers to mobility within the EU add significantly to their difficulties, and that unless differences in employment regulation, tax and benefits systems, immigration and pensions are addressed, the region's international competitiveness will be put in jeopardy. For instance, although more than half of businesses surveyed would like to have a single contract of employment across Europe, only 10% have made any progress towards achieving this.

Els de Wind, partner and Global Head of Employment at Landwell, commented:

"Companies continue to face legal compliance problems when moving their employees from job to job within the EU. Individual countries' employment and immigration laws vary considerably. Unless and until these are more consistent and co-ordinated, business must ensure that it can satisfy its needs without risking any breaches of local law."

"For companies wishing to employ non-EU nationals, the situation is even more complex. Despite case law in the mid-1990s *, non-EU nationals must obtain separate immigration clearance for every EU member state."

"Business will be listening with interest as to how European leaders propose to tackle barriers to labour mobility in the future at the forthcoming European Council meeting in Barcelona in March. In the short and medium term business must guard against complacency," said Kevin Delany:

"The growing demand for skilled and experienced workers, together with increasing business competition to meet customers' needs internationally will change the European business environment significantly in the future. Business needs to be proactive in managing mobility, encouraging a better match between its own needs and the ambitions and career profiles of individual employees."

"The days of foreign assignments meaning a career backwater, however lucrative, are long gone. Dialogue between employer and employee can help foster more flexible solutions. These may include commuter assignments, portfolio working and short-term mobile contracts in circumstances where family ties may make a complete family move difficult."

"Each solution, however, carries its own disadvantages as well as plus points for both employer and employee. Business may need to consider taking the work to the workforce rather than vice-versa."

Insights from the PricewaterhouseCoopers / Landwell research suggest there a number of key questions which business needs to address in order to stay competitive:

1. Does your use of different types of mobile worker best fit your aims and objectives and add value to your business?
2. Do you have sustainable global policies for managing your employees working internationally, covering recruitment and retention, remuneration and diversity, continuing development and performance management?
3. Do you have a clear view about how technology will affect your future need for mobile workers, for example in enabling you to organise yourself in such a way as to reduce your reliance on mobile workers?
4. Have you considered all potential pools of workers including the local labour force and mobile older workers, as well as how to capitalise upon the appetite for international working amongst younger age groups?
5. Have you considered the expense of mobile workers on expatriate terms and conditions as opposed to those employed on local terms and conditions? Have you taken steps to reduce the cost?
6. Do you have a one-stop information site for employees covering potential vacancies and all aspects of international assignments? Do you provide for employees to acquire (new) language skills?
7. Are foreign employees working for your business legally?
8. When you send a mobile worker to work in another country, are you complying with local employment laws, such as maximum working hours? Have you considered that he may have employment rights in both countries?

Notes to Editor:

1. Key findings and a copy of he executive summary of 'Managing mobility matters - A European perspective' follow. For a copy of the report, please contact: Gabriela Sorescu, t: +44 (0)20-7212 5016.
2. The research for 'Managing mobility matters - A European perspective' by PricewaterhouseCoopers and Landwell comprised:
   • a survey of over 400 businesses in eight countries across Europe - Czech Republic, France, Germany, the Netherlands, Spain, Sweden, Switzerland and the United Kingdom - to gain insight into their views and perceptions of the potential role and implications of increased labour mobility;
   • a series of case studies with nearly 25 multinational businesses across a range of industry sectors within Europe to gain a more in-depth perspective of their approach and attitude to a wide range of mobility issues;
   • a survey by MORI of over 10,000 individuals in ten countries across Europe (those covered by the business survey plus Hungary and Poland) to understand their attitudes towards moving between countries to live and work and their perceptions of the opportunities for, and obstacles to, such mobility.
   • The fieldwork was completed between June and August 2001 among the general public. Interviews were conducted face-to-face except in the Netherlands, Sweden and Switzerland where telephone interviews were completed.
3. * The European Court of Justice considered the case of Raymond Vander Elst -v- Office des Migrations Internationals in 1994. The Court's decision established a right in law for an employee lawfully employed in a member state to temporarily provide cross border services within the European Union.
4. PricewaterhouseCoopers (www.pwcglobal.com) is the world's largest professional services organisation. Drawing on the knowledge and skills of more than 150,000 people in 150 countries, we help our clients solve complex business problems and measurably enhance their ability to build value, manage risk and improve performance in an Internet-enabled world.

PricewaterhouseCoopers refers to the member firms of the worldwide PricewaterhouseCoopers organisation.

Landwell, the correspondent legal practice of PricewaterhouseCoopers, is one of the largest global legal practices with 2700 lawyers in over 40 countries. Landwell represents a new model for the delivery of legal advice to businesses. Lawyers frequently work in integrated professional consulting teams to address clients' business issues. They are deal architects who structure and project manage transactions through to their completion. For further information go to www.landwellglobal.com