Lip Bled, Slovenia: Redeployment
LIP Bled d.d., located in Slovenia’s world-renowned alpine region of Bled, is a national privately-owned wood-processing company, organised as a joint stock company. The company was founded in 1948 as a saw-mill works. Today, it specialises in joinery production, its main products consisting of construction panels, solid-wood furniture and doors. The company has a traditional functional organisational structure. Altogether, approximately 33% of its shares are owned by employees, former employees and other individuals, while 67% of the shares are owned by legal entities.
The company employs some 672 workers, 419 of whom are male (62.35%) and 253 of whom are female (37.65%). The average age of the workforce is 41 years. Most of the workers are unskilled: in 2005, 15.43% of the workforce had a basic education, 28.37% a lower secondary vocational education (two years), 28.27% a secondary vocational education (three years), 20.16% a secondary technical education, 3.38% a post-secondary education, 4.17% a higher education, and 0.23% a postgraduate degree. Thus, the qualification structure of the workforce is not optimal; rather, it is determined by the labour intensive nature of the sector, with 70% of the workforce being employed in production. There is a shortage of joiners (secondary vocational education of three years) within the company, and, in order to overcome this problem, unskilled and less qualified workers are being trained. Usually, they are required to attend adult classes at a post-secondary school for wood processing (the Srednja lesarska šola) in Škofja Loka.
Good practice today
The company’s human resource (HR) policy consists of a broad range of non-age specific initiatives aimed at all employees. These measures include training initiatives (part-time education, language courses and occupational training), rewards for encouraging innovation activities, and measures to help reduce the level of sick leave. In 2004, the company introduced annual one-to-one interviews aimed at improving trust among employees, increasing employee efficiency and encouraging cooperation among employees in preparing for the company’s future plans.
A measure that exclusively targets older workers is the redeployment of these workers to less demanding positions, at the same time allowing them to retain their previous salary levels. The initiative was first proposed by the trade union for wood processing (Sindikat lesarstva Slovenije, SINLES). Negotiations began in 1991 and were completed in 1993 when the collective agreement was signed after intensive social dialogue. The company’s HR department is responsible for coordinating the initiative.
Details of the measure are outlined in the collective agreement under the section entitled ‘Protection of older workforce’. The measure is aimed at employees aged over 50 years (or 55 years) who voluntarily want to change their current position for a less demanding one. Subsequently, a proposal for reassignment is made to the employee by their immediate superior. The reason given by the older worker for reduced productivity must be confirmed by medical evidence, and the new position offered should take into account the employee’s age and existing ability to work. A new employment contract must be subsequently signed in agreement with the employee.
After their reassignment, the employee is entitled to receive either their previous or a higher salary. The measure is implemented in conjunction with the annual interviews and annual medical examination of employees (which is related to keeping records of the level of sickness absence).
The measure is taken up by approximately 50% of the workers who reach 50 years of age. They usually opt for this arrangement due to work fatigue and a decline in their qualitative work performance. More women than men have benefited from this initiative, and, up to now, only one employee has refused the offer of reassignment.
The main reason for the introduction of this measure is to maintain and improve employees’ work efficiency. According to the company, the initiative has had largely positive effects for both employees and the company. While the company finances the difference in earnings of the redeployed workers, the gross costs per employee are relatively low, amounting to approximately SIT 20,000 (€83) a month. These costs are compensated by the fact that employees’ productivity in their new position generally increases, their quality of work is better, they fulfil targeted goals and standards, and the level of sickness absence declines. At the same time, the company benefits from the greater satisfaction of employees, a more favourable organisational climate, and a more trusting relationship between employees and the company.
In the future, LIP Bled plans to set up another company that will employ both older and disabled workers who were already employed in LIP Bled. It will also employ workers whose annual preventative medical examination has revealed a disability or medical problem. The purpose of this measure is twofold: to improve the qualification levels and lower the age profile of the existing company; and to enable the new company to take advantage of legal provisions regulating employers who hire older and disabled staff.
Development of the case study
The aforementioned measure is one of a range of initiatives introduced by the HR department at LIP Bled, aimed at the development of all employees irrespective of their age or level of education.
However, this particular measure has made the HR department more aware of the needs of older workers in relation to their productivity and satisfaction at work. This move can be largely attributed to favourable social dialogue within the company, which has in turn led to a new collective agreement that includes provisions for the reallocation of older workers to less demanding positions.
The measure complements other initiatives within the company such as: annual interviews, measures for keeping records of and reducing the level of sick leave, and measures aimed at promoting education and training.
Contact: Anton Koncilja, Head of human resource and educational department, LIP Bled
Annual Report 2004 (in Slovenian), (Letno porocilo 2004 LIP Bled, d.d.)
Annual Report 2003 (in Slovenian), (Letno porocilo 2003 LIP Bled, d.d.)
Annual Report 2002 (in Slovenian), (Letno porocilo 2002 LIP Bled, d.d.)
The reports are available online at: http://seonet.ljse.si.