EurWORK European Observatory of Working Life

DSM, Netherlands: A comprehensive approach

About

Case study name: 
Ageing workforce
Organisation Size: 
Large
Sectors: 
Chemicals
Initiative Types: 
Comprehensive approach
Scope: 
All

 

Organisational background

 

DSM is a large chemicals company based in the south of the Netherlands. It is mainly an industrial company producing bulk chemicals. The company is the private successor of the former public Dutch State Mines and operates internationally. The Dutch unit, DSM Limburg BV, is situated in Geleen and, at the end of 2003, employed 5,083 workers, 83% of whom are male. Female employees mostly work in staff, administrative and supporting functions, and are under-represented in the workforce at the industrial sites.

DSM’s workforce has continued to decrease in size: in 1995, the company employed about 12,000 workers; by 2000, it employed about 8,500 workers. The age profile of workers is rather unbalanced: some 69.2% of employees are over 40 years of age. The company’s comprehensive personnel policy consists of programmes aimed at life course issues, employability, flexible working hours, training and development, and adjustment of work practices, among other things. Social dialogue takes place at various levels of the organisation. In addition to the works councils at the different business units, a central works council at DSM Limburg also exists. Moreover, regular consultation and negotiation with trade union representatives takes place at the External Consultation Committee DSM (CEOD). The CEOD acts as a platform where negotiations on the collective labour agreement take place.

The original initiative

In 1995, a significant ageing of the workforce was anticipated, which led to the development of an ‘age-awareness’ personnel policy. This resulted in an agreement between DSM and the trade unions to include a declaration of intent regarding age-awareness policies in the collective labour agreement of 1994–1996. A pilot programme was then initiated, which included various measures focused on changing attitudes and aspects of industrial relations. According to this programme, the projected age of exit from the company should be 65 years. The trade unions and works council were involved in the implementation and evaluation of the pilot programme.

The primary goal of the initiative was that employees should remain employable and motivated until retirement age. Employability over the complete work course was considered the shared responsibility of the employees and management. This policy was explicitly individual in that it recognised that business units have varying work capacities, functions and age profiles, and that the personal attitudes and ambitions of individual employees differ. To enable the CEOD to assess the effects of the policies before their full implementation, a pilot study was undertaken. The pilot consisted of three parts, all of which were based on a life course perspective:

  • First, all business units were asked to develop an age-awareness personnel policy within six months and to report the results every half year. An instrument to facilitate the development of these policies at business unit level was developed centrally beforehand. The instrument prescribed that the following steps be taken: a quantitative analysis of the current age profile of the workforce; an analysis of the future age profile in the case of an unchanged policy; the fixing of goals and required operations; periodical evaluation of the policy effects. A central role was given to career and performance reviews between line managers and employees in the second half of their careers. A comprehensive set of measures aimed at the continued employability of the worker was applied on the basis of these reviews.
  • Second, a pilot programme called ‘Stay Fit’ was introduced, aimed at all workers over 35 years of age. Courses were given to small groups of employees on life course issues in relation to work and private life. An analysis was made of employees’ attitudes towards work, as well as gaining an insight into their individual capacities and developing a plan for the future to be discussed with their own line manager.
  • A third initiative was directed at the company’s fire department. This department faced a double problem of a strong emphasis on shift work and an age profile that was considerably older than that of the company as a whole. Here, individual reviews were made of workload and work capacity, in which the company’s medical service, the fire department chief, a human resource (HR) official and the individual employees took part.

Development of the initiative

Since the pilot initiatives in the 1990s, age-awareness policies at DSM continued to develop. However, expectations of the various pilot projects were high and, over time, the experiments were modified and aimed at a new policy of ‘streamlining’ careers. Such policies focused on the different phases of the work course (start, career, exit), and on maintaining a feasible balance of workload and work capacity. As before, however, expectations were high and the outcomes of the new policy were less favourable, as it appeared that the support of the workforce was lacking because ‘operators did not want to think about their careers’.

Other policies followed but also failed to succeed. A budget for the education of shift workers, paid for by the reduced shift-work surcharge, did not succeed because the government was not prepared to offer the requested tax facility. Various streamlining policies also failed to meet expectations. A study conducted in 2000 among 10% of DSM employees showed that, although the number of planned courses was high, participation in these programmes declined among employees over 45 years of age. An evaluation of the pilot initiative regarding career and performance reviews showed that, although the reviews were conducted, the available instruments were used to a lesser extent than foreseen. In the following years, a database of internal vacancies matched to internal candidates was published on the intranet. However, the database of candidates was considered to contain only less productive workers. The implementation of the Stay Fit programme was also largely unsuccessful: those who could benefit from the programme were already very demotivated, while workers who had good motivation levels did not take the initiative seriously. At a later stage, the pilot programme on a life course approach to work was also unsuccessful: initially, line managers disliked the ‘label’ of a policy aimed at older workers; then, when the label was abolished, the pilot was not recognised as being meaningful.

In 2000, a study on the position of older workers (Studieproject Positie Oudere Medewerkers – SPOM) was conducted by HR officials and line managers at DSM and by representatives of the workers. The study resulted in the publication of a report in 2001, which proposed an elaborate set of preventive, curative policies and cultural changes. The preventive policies centred on reviews and the interaction between line managers and employees – derived from one of the original pilot projects. The curative policies were reminiscent of the streamlining policies; while the policies aimed at cultural changes had also been tried before.

Once again, many of the new policies were not fully implemented. According to the expert on age-awareness policies at the Dutch employer organisation, AWVN, this was not due to the substance of the policies themselves: he argued that DSM’s policies are among the best in the nation. Two factors seem to have resulted in the lack of success of these policies. First, DSM Limburg is experiencing a process of continuing reorganisation, which has resulted in an ongoing reduction of the workforce. DSM follows a policy that precludes expansion; therefore, it is difficult to consciously maintain an age-awareness policy. This lack of policy contradicts demographic expectations. By 2012, the majority of older workers will have left DSM; therefore, recruitment and training of new personnel will be required increasingly over time.

A second issue relates to the position of human resources management (HRM), which seems to hinder the potential success of personnel policies. At DSM, the individual business units have decentralised financial responsibilities and devised their own personnel policies. HRM is ostensibly a centralised service unit that is not hierarchically placed above these business units. This fact, along with the continuing reduction of the workforce, means that line management at the business units appear to be unwilling to fully implement a personnel policy that contributes to the continued employability of older workers. Thus, HRM did not have the capacity to direct the action of line management in the plants. Nevertheless, the transferability of the policies may be increased with the introduction of incentives and obligations aimed at increasing age awareness among line management. This requires, however, a stronger formal position for HRM functions in the company.

Good practice today

At DSM, continuous efforts have been made to implement comprehensive age-awareness policies. In 2001, arising from the SPOM study on the position of older workers, a comprehensive approach was proposed, focused on preventive and curative policies and on cultural/attitudinal change.

The SPOM proposals are based on various studies. The annual health examinations show that workers’ perception of their own health becomes more negative with growing age. This contributes to older employees leaving the workplace through disability insurance. A study was also conducted on the outcomes of the streamlining policy. It revealed that the number of agreements on training and development between employees and their managers is relatively low among older workers. A quarter of employees over 55 years of age have such an agreement, compared with two-thirds of workers aged between 40 and 44 years. Older workers, in particular, see the programme as being a threat, because of the perceived emphasis on labour mobility. Furthermore, a relatively large number of older workers experience capacity problems. This group fears that the streamlining policies cannot help them. The research also found that ‘concentration of skills and experience’ takes place with growing age: in other words, employees develop a greater depth of skills, but these skills concern a smaller area of expertise. As a result, people have more difficulty conducting new and complex tasks as they grow older.

These findings led to an analysis of DSM’s vulnerabilities. The analysis found that the relatively old age profile was considered to cause an unbalanced composition of the workforce in relation to experience, skills, mobility and motivation. This, in turn, could lead to shortages of workers with specific types of capacities. Such shortages are expected to be reinforced because of DSM’s current downsizing measures. To cope with these issues and guarantee older workers continued employability, it was proposed that an age-awareness policy be integrated in relation to DSM’s entry, career and exit policies. These policies are reminiscent of those implemented in the 1990s. As with the original initiative, however, the SPOM policies were not fully implemented either.

Time and again, it appears that the policies proposed by the company’s HRM and the trade unions are not fully implemented at the plants. Although the proposals are based on relatively comprehensive research, a gap seems to exist between policy formulation and actual implementation, something that seems to be related to the strategic position of HRM. This, added to the continuing reduction of the workforce, has caused a situation where line management at the business units appear to be unwilling to fully implement a personnel policy that contributes to the continued employability of older workers.

More recently, in 2005, the recommendations of the SPOM study have been included in the new collective labour agreement. DSM and the trade unions agreed that the policies proposed in 2000 are still feasible today. While there has been a failure in the past to fully implement the SPOM recommendations – largely because of a lack of support at the plant level – the renewed emphasis on the importance of age-awareness policies, coupled with the broad support that is now given to these policies in the company, may well contribute to their actual implementation at plant level. Encouraging greater support among line management officials, or placing an obligation on them to do so, may further improve policy implementation.

Further information

Contact: John Muijsers, Human resources consultant (interview 9 May 2005)

Bert van de Boorn, Retired member of works council, central works council and CEOD (interview 9 May 2005)

Henk van Rees, Regional board member of FNV trade union (interview 16 June 2005)

Arno Parren, Vice-director, company medical services (interview 13 June 2005)

Ton Kitsen, CEOD member (interview 13 June 2005)

DSM, Sociaal jaarverslag 2003, DSM, 2004.

DSM, Studieproject Positie Oudere Medewerkers (SPOM), DSM, 2001.

 

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