DNB, Netherlands: Training and development, redeployment
De Nederlandsche Bank (DNB) is the central bank of the Netherlands. In 2004, it was merged with Pensioen- en Verzekeringskamer (PVK), the supervisory body of the pensions and insurance sector. Despite the merger, the name of the organisation still remains unchanged as DNB. A public organisation, DNB supervises the financial and insurance market, formulating and implementing national monetary economic policy. Until recently, its activities were fully publicly funded; however, the sector is now required to provide finance for supervision and money distribution. This increases the need for a well-developed personnel policy.
In 2004, the organisation employed 1,872 workers, including former PVK workers – representing a reduction of 170 workers, compared with the pre-merger 2003 figures. Some 56% of the workforce are over 40 years of age, 38% are over 45 years, and 8% are over 55 years. Approximately 34.3% of the workforce are female. DNB mainly employs workers with a university degree, although security staff, employees at the regional distribution centres, and money transport personnel usually have lower or senior secondary level education. The organisation’s social plan and labour conditions are negotiated with the trade unions. Issues around implementation and practical implications are subject to consultation with the works council. The works council discusses issues before implementation, to prevent a rejection of personnel policy proposals made after company–trade union negotiations. The organisation’s human resource management (HRM) policy consists of a comprehensive approach that is organised on the basis of a performance management cycle. The overall aim is to support employees in choosing career paths that enable their continued employability over the life course. To facilitate this, training and development resources are provided.
The original initiative
DNB’s comprehensive personnel policies are essentially geared towards encouraging older workers to stay in the workforce. Three types of measures support this goal: career management and job rotation; individualised labour conditions and flexible working hours; and access to training and career development. In addition, recruitment practices are differentiated on the basis of age.
Career management and job rotation are aimed at the continued employability of both younger and older workers. However, job rotation measures proved difficult to implement, because line management was frequently reluctant to let its most valued workers go, while workers entering a new department were often regarded as being less productive workers that the other department was willing to let go. Less emphasis on career management and job rotation was thus seen as a way of maintaining peaceful labour relations.
Individualised labour conditions comprise various measures. Employees could avail of early or partial retirement, or temporarily reduced working hours. By agreement between management and the employee, an employee can work flexible hours. Furthermore, older employees are allowed to work reduced hours: employees over 58 years of age are entitled to work 32 instead of 36 hours per week.
A training and development budget exists, which currently amounts to 4.5% per employee. However, many older employees did not avail of the applicable measures and seldom participated in training and development programmes. Moreover, management did not actively promote the utilisation of such measures, nor did they follow up on problems that arose in relation to employability.
Two factors explain the poor implementation of age-awareness policies in the past at DNB. First, DNB put main emphasis on the proper implementation of its central task – supervision of the banking sector and the formulation and implementation of national monetary policy. Second, DNB’s economic environment made virtually no demands on the bank’s administrative and personnel costs. As a result, possible employability issues were often downplayed. Rather than demanding that employees enhance their employability – thus risking labour conflict and its possible negative effects on the organisation’s primary task – less employable employees were left as they were while new employees were added to the workforce. Although such practices resulted in a somewhat inefficient administration of tasks, it also meant that a relatively small proportion of employees left the labour market before the pensionable age. In a sense, therefore, this practice demonstrated a level of age awareness.
Recruitment practices showed an implicit life course dimension. While high workloads and speed of production are common in the monetary policy departments, in the supervisory departments a strong insight into the functioning of the banking sector and a number of years of experience in the sector are important.
Policy implementation was subject to works council consultation, and labour conditions were negotiated with the trade unions. There was no gender dimension to the policies.
Development of the initiative
The merger between DNB and PVK provided an opportunity for rethinking personnel policies and for more fully developing the life course dimension, particularly since economic conditions at DNB had become less favourable. As a result, there is increased emphasis on implementing career management, and training and development initiatives. Since it became apparent that employability problems arise if employees do not change jobs for a relatively long time and are not encouraged to enhance their career prospects, the merger has increased the willingness of management and employees to consider such issues. In addition, because a large number of management officials were transferred after the merger, the importance of internal mobility was acknowledged more than previously and it appeared that job transfers were relatively easy to attain. These factors have led to a growing willingness at management level and within the organisation as a whole to cooperate with policy implementation aimed at developing the life course dimension.
As a result, a performance management cycle has been effectively implemented at DNB. Accordingly, employees and line management review employee competencies and capacities in relation to the job profile three times a year. The line manager is then obliged to report on the reviews by completing a form on the intranet, which is also accessible by the employee, and on the basis of which the actual implementation of reviews can be monitored. Courses for management and employees are available to support the preparation of such reviews. The reviews are also linked to agreements on training and education between the manager and employee. While these training and development facilities aim to address employee competencies for their current tasks, a more focused attention by the manager and employee on the employee’s career and life course has also resulted from the procedure. Target figures on internal mobility have been determined, stipulating that employees retain a job for a maximum of eight years. This target contributes to the emphasis on career management and on the life course perspective.
Since DNB merged with PVK, economic conditions at the organisation have become less favourable. For one, the merger led to a doubling up of staff functions in areas like HRM and information and communication technology (ICT), which led to an efficiency operation resulting in some redundancies. In addition to staff reductions following the merger, DNB’s financial situation has also changed. Instead of being directly funded by the state through taxation, a growing proportion of DNB’s financial means is to be yielded from the financial sector. Ultimately, the sector is required to provide finance for the task of supervision. In addition, the private banks are preparing to take up the task of money distribution. Therefore, the DNB distribution centres – referred to as regional agencies – will be reorganised.
These factors forced DNB to cut back on administrative and personnel costs. The merger between DNB and PVK, and the efficiency operation, led to a reduction of about 200 jobs, and the reorganisation of the distribution centre may result in the loss of a further 200 posts. As the supervisory function of the organisation grows, jobs are expected to be lost primarily in the lower functions and line management.
Intensive negotiations between the company and the trade unions have been conducted in order to integrate the collective labour agreements of DNB and PVK. While age was not considered a central issue during the merger process, an age-differentiated severance package was agreed upon with the labour unions, enabling all workers over 56 years of age to exit the workforce with financial compensation. Accordingly, it was agreed that older workers would have an equal redeployment status to younger workers, notwithstanding the fact that about 90% of the employees over 56 years of age availed of the compensatory arrangement. After close negotiations with the trade unions, involuntary redundancies were traded with a quiet, financially compensated severance of older workers. Redeployment after the merger has not yet finished and without this arrangement, more workers were expected to be discharged, although a precise estimation cannot be made. To facilitate outplacement, a mobility centre was established, to help employees address career and employment issues.
In effect, DNB’s merger with PVK, and the fact that its economic environment has become more demanding, has proved to be beneficial in some respects: not only has it forced a rethinking of personnel policies, it has also made managers and employees more amenable to policy implementation. As a result, the organisation functions more efficiently and a reduction in operational costs, primarily labour costs, has been almost fully achieved. At the same time, the mobility centre and career management policy has enabled employee redeployment, facilitating a stronger focus on the life course and on career paths aimed at enhancing employability.
Good practice today
Since the merger, a stronger emphasis has been placed on age-awareness policies and on the implementation of these policies. Two policies in particular have been effectively implemented: a performance management cycle that includes a strong age and life course perspective; and the introduction of new types of functions that enable a new career path for employees. These policies have been put in place in order to cope with DNB’s changing financial conditions. Prior to this, few demands were made on the bank’s administrative and personnel costs, and potential employability issues were frequently downplayed. Currently, the organisation’s distribution function is to be privatised, while the banking sector is to finance the supervision function. As a result, DNB is expected to act as a company operating in the market economy.
The performance management cycle has been effectively implemented at DNB, enabling a review of employee competencies and capacities in relation to the job profile three times a year. The reviews are also linked to agreements on training and education between the manager and employee. While these training and development facilities aim to address employee competencies for their current tasks, a more focused attention by the manager and employee on the employee’s career and life course has also resulted from the procedure.
Research has been conducted into the career patterns of DNB. It appears that relatively young employees primarily enter the monetary policy department, while older employees enter DNB’s supervisory department. This pattern corresponds to the internal mobility pattern. Career changes are primarily made from the area of monetary policy to supervision, in accordance with the nature of work in these departments. Thus, there seems to be an implicit life course dimension in career patterns at DNB. Nevertheless, DNB does not intend to formalise this career path, as the organisation is considered too small for that. However, such career shifts are often supported by the performance management cycle and by the organisation’s training and development instruments. As a result, experience is retained within the company, while employees are facilitated in continuing their work and in maintaining their employability.
The mobility centre further supports sustained employability and mobility. This centre was originally established to facilitate outplacement after the merger and has continued ever since. Increasingly, however, it acts more as a general career advice, employability and mobility centre than as an outplacement centre.
The introduction of a new type of function – namely the function of policy expert – enables a new type of career path that was not previously available at DNB. This function is suitable for employees who want to further develop their career, but who do not want to take on a management function. Its introduction is related to the awareness that career development may imply different things rather than solely entering a management role. Previously, upwardly mobile employees entered management roles, although their capacities or competencies were not necessarily fully utilised; as a result, a relatively large number of expert employees were placed in what may be referred to as ‘non-managing management functions’. The introduction of so-called ‘integral management’ is another reason for reorganising these functions. Since DNB managers will be given additional responsibilities – HRM and departmental financial responsibilities – ‘non-managing managers’ need to be redeployed to other functions. In effect, this new career path mutually benefits the employee and the company.
The transferability of DNB’s performance management initiative and new expert functions is high. Often career paths are exclusively constructed as upward paths along line management. The paths supported at DNB, the shift between departments and the introduction of the expert function, address issues related to age and the life course, and contribute to more sustained employability for employees. They enable older employees to continue working and to use their specific capacities (greater work experience and oversight). The path between departments is possible in companies where various types of work are conducted that differ according to the extent of flexibility they require, on the one hand, and the amount of oversight and experience they require, on the other. The expert function path is possible where work experience and general oversight contribute to work quality. The career paths that emerged at DNB provide a way to address age-related issues at the workplace at virtually no cost. At DNB, life course related capacities and functions are efficiently matched.
Contact: Marli van den Broek, Head of DNB personnel department (interview 7 July 2005); Agaath Schreuder, DNB personnel department (interview 7 July 2005)
DNB Collective Labour Agreement, 2005.
DNB, Personeelsgids, DNB, 2005.
Sociaal Plan 2003–2008, DNB, 2003.