Hommes et Emploi, France: Redeployment
Hommes et Emploi aims to ensure the redeployment of older employees who experience employability problems for reasons mainly related to their health and skills. These workers remain in Arcelor’s workforce and are given individual support that leads to satisfying jobs matching their potential. On this basis, H&E has become a successful company, providing services to both companies and individuals.
Hommes et Emploi (H&E), a French Arcelor-Mittal subsidiary, is a world leader in the steel industry and is located in the East of France. The company was created in 1999. H&E provides services to other Arcelor-Mittal subsidiaries, other companies and to private individuals. Its main activities are related to finishing work in construction and gardening (which represent 70% of the company’s turnover in 2005), and to logistics and digitalisation of documents. In 2006, H&E’s turnover was six million euros. H&E employed 164 workers in October 2006, of whom 102 have been employed since 1999. Another part of the workforce includes 62 employees assigned from Arcelor-Mittal’s other units. Originally, the number of employees was 200. Forty employees are women. Most of the workers are low qualified. The average age of the workforce was 51.2 years in 1999 and 54 in 2006.
Social dialogue, both formal and informal, is significant. There are five trade unions, and the union membership rate is high (about 70% of the workforce). Employees are also represented by a works council, which is regularly informed and consulted on the company’s economic situation and strategy. Collective bargaining also exists. A collective agreement related to pay raises was signed by all trade unions.
Description of the initiative
H&E was founded when Usinor (a French group that became a part of Arcelor in 2002) decided to sell one of its subsidiaries, Unimetal. Unimetal employed 1,200 workers, 1,000 of whom were considered as able to keep their jobs or to be redeployed and 200 of whom were seen as unable to access a job. The 200 unable to keep a job were too young to benefit from early retirement schemes and too old to find a new job. In this context, most of the trade unions represented in Unimetal interceded with the group’s top management in order to maintain these workers in the group. Usinor’s former CEO thus asked SODIE, a subsidiary dedicated to the support of both employees and regions in cases of restructuring, to present possible solutions. SODIE proposed to create a services company, H&E, which could employ the 200 workers.
The main difficulties encountered in meeting this objective were related to the workforce’s characteristics. Most of the 200 workers were low qualified, they were 51.2 years old on average and most of them had experienced very difficult conditions by working in the steel industry for 32.5 years on average. They thus felt burned out, rejected and demotivated. To address this challenge, one decision was to design H&E’s activities on the basis of employees’ skills and not according to the market. The aim was to find activities that were both viable and satisfying for these workers. A method was designed to identify each worker’s skills. Through individual interviews, it was possible to identify both the professional and personal skills of each worker and then to build H&E’s activities based on these skills.
During the interviews, useful ‘hidden’ skills were identified, such as those linked to employees’ activities during their rest periods (gardening, building work, etc.). All the skills identified were incorporated into a matrix allowing management to design an activity suiting the worker’s competences and motivations. Today, this process is applied to workers coming from Arcelor-Mittal companies in order to assign them to a post. These workers come from units facing restructuring and from viable units. In the latter case, they are employees who no longer correspond to steel industry needs because of their age and/or aptitude concerns. The workers are assigned voluntarily and are free to return to their previous job.
Training and management methods also are essential. Training provided to H&E employees represents 26% of H&E’s budget. Management’s aim is to foster relationships between all employees. It is difficult, however, to manage the careers of older workers in the same way as for younger ones. The hierarchy within the company is flexible and each employee is considered responsible for the company’s success.
To minimise potential problems, communication with employees is emphasised:
- contact with management is simplified;
- trade union delegates are an effective link between workers and managers;
- activities are carried out through small work teams.
H&E is an example of participative management in which workers feel useful and motivated.
H&E turnover only finances a part of the social costs resulting from the company’s activities. Arcelor-Mittal, therefore, must finance the other part. This situation results from several factors, all linked to workforce’s characteristics:
- H&E employees keep the wage level they had while working in the steel industry. Their wages are thus much higher than those usually paid in the sectors the company operates in (especially building and gardening).
- productivity of older employees is lower than that of younger workers;
- training costs are significant, especially corresponding to the personal support provided to employees at their workstation.
Financial conditions have improved since 1999, however, and H&E now provides services with higher added value and has implemented various means in order to improve its economical performance.
The first of the factors is social. Since 1999, H&E has supported the redeployment of about 250 older workers without any wage losses. It has offered these workers the opportunity to expand their working lives by providing the possibility of using all of their skills.
According to the trade unions, employees are very satisfied with their new professional lives:
- absenteeism has dropped from 9% in 2000 to 2% in 2006;
- no worker from another Arcelor-Mittal unit has chosen to return to his previous job.
Problems the company had to cope with at the beginning were mainly related to difficulties of some employees to ‘forget’ their former life in the steel sector. It was thus necessary to allow the employees to test different jobs within H&E and to support them individually. Management and trade unions both played a great role in this process.
The second factor is economic: H&E allows Arcelor-Mittal to socially manage workforce downsizing without implementing costly collective redundancies schemes. This has resulted in no unemployment benefits to be paid and no early retirement schemes being financed.
The recent merger between Arcelor and Mittal could be a threat to H&E’s future. It seems doubtful, however, that the new group will decide to abandon one of the most successful and socially responsible ways to manage the permanent restructuring that the steel industry must cope with.
H&E was created because a few people considered their own personal experiences and succeeded in designing a new way to manage restructuring. The support of Usinor’s top management also was essential. The successful implementation of the project was made possible by the involvement of employees at all levels.
Good practice today
H&E’s experience clearly shows that older workers can be redeployed, despite difficulties linked to their previous situations. H&E’s method mainly consists of individual support to motivate older workers and to determine their economically useful skills. H&E’s expertise in welcoming ‘fragile’ persons is widely recognised outside Arcelor-Mittal. As for financing issues, one of the solutions to cover the additional costs generated by older workers’ redeployment (to set up a kind of ‘wage insurance’ for them and to finance suitable training programs) could lie in potential public support, considering the benefits resulting from keeping older workers employed.