Loewe, Germany: Comprehensive approach
The innovation-oriented enterprise Loewe AG uses a comprehensive human resources (HR) strategy to address the challenges of the demographic change in Germany in terms of an ageing and declining workforce.
Founded in 1923, Loewe AG is a listed company in the electrical industry; the organisation’s headquarters is located in the town of Kronach in the Bavarian region of Upper Franconia. There, the parent company produces television sets (primarily LCD and plasma TVs), DVD recorders, video recorders and hi-fi systems in the premium market segment. The company is active internationally with sales partnerships and subsidiaries, including its marketing subsidiaries in Austria, Belgium, France, Italy and the UK.
Loewe employs about 1,000 people, more than a quarter of whom are aged 50 years and over. In the next few years, this proportion will increase to over 40%; about half of the employees are currently aged between 36 and 50 years. Workers at Loewe generally stay in the company for several years; employee turnover is low, at 1%–2% a year.
In its HR policy, Loewe pursues a holistic approach that is not limited to one age group but includes all employees. For example, it involves the promotion of lifelong learning and also a commitment to the training of junior staff members. About 100 of the 1,000 workers are apprentices.
Relations with the works council and the trade union are cooperative and trusting. For example, during a company crisis in 2004, a collective agreement on restructuring was concluded, which provided that all employees forego a part of their pay. After having weathered the crisis, in 2007 the pay concessions – including interest – were paid back to the staff members.
Good practice today
Loewe recognised that the company is based in a region which will be more strongly affected by the demographic change, including ageing and population decline, than other regions in Germany. Therefore, in 2005, the enterprise initiated ‘Project 67’, which is being implemented within the framework of the programme ‘Mit Erfahrung Zukunft meistern’ (‘Mastering the future with experience’) of the Federal Ministry of Labour and Social Affairs. In addition, the company is involved in the labour market initiative ‘Perspective 50 plus’, which aims to facilitate the re-entry into employment of workers aged over 50 years.
The company has defined four action areas that are of particular importance in the light of demographic developments:
- management development and competence management;
- job rotation in final assembly;
- job enrichment in manual assembly;
- realignment of workplace health promotion.
Management development and competence management
As the company management was hardly aware of the issue of demographic change before ‘Project 67’, Loewe developed a workshop concept to educate its executives in this matter. The workshop comprises the fields of strategic HR development or competence management, leadership and motivation.
Strategic competence management aims to ensure that the innovation and competitive ability of the company can be further developed in future, in the context of an ageing workforce. In this regard, the question arises as to which skills will be required so that the company can continue to operate as a pioneer enterprise in the market. To tackle the problem, the corporate strategy is broken down into competence areas for each department. On this basis, the target skills are listed for each job, together with the actual skills of each staff member; the latter are compiled in liaison with the workers and recorded in an employee qualification matrix. In an appraisal interview, the perspectives of the company and of the employees are coordinated and further development steps and qualifications are planned with the respective personnel.
In addition to individual career development, this instrument is useful for determining the areas where strategic knowledge deficits might occur in the future. Furthermore, it is a valuable tool for succession planning, as well as for internal knowledge transfer.
Job rotation in final assembly
The jobs in final assembly used to be characterised by monotony, repetitive strain and little scope for individual employee initiative. This led to an increase in skeletal and joint diseases in particular, as well as a growing risk of mental illnesses. Moreover, the staff members – not least due to old habits and increased pressure to perform – showed relatively little motivation to change.
The introduction of job rotation in final assembly aims to counteract the above-mentioned risks, as continuous job rotation facilitates a better learning and health environment for work activities. To promote the employees’ willingness to change, the company conducted workshops with the aim of informing the workforce about issues concerning their own work. For example, the staff members were advised about work strain and the possibilities of relieving such strain. In addition, job analyses were carried out to ensure sensible planning of the task rotations.
Job enrichment in manual assembly
In manual assembly, the job content and work procedures are to a great extent determined by the process planning. This situation particularly promotes the ‘output performance’ but other competencies, skills and flexibility are neglected – especially after a long job tenure and adaptation processes. To counteract these negative developments, the company plans to involve the workforce more in the process planning. Rigid specifications in the planning process are to be replaced by self-organisational elements. Staff teams are to organise the distribution of tasks and the filling of posts, for instance, in order to boost communication and qualification aspects and thus to increase the degree of autonomy among workers.
Realignment of workplace health promotion
Loewe has set itself the target of making its workplace health promotion more sustainable than hitherto. This in particular refers to aspects of behavioural risk prevention, which are to be strengthened by means of specific company support structures. Up to now, health promotion was mainly confined to ergonomic issues; however, the realignment of health promotion comprises the following elements:
- job analyses and on-site counselling in terms of design, behaviour and relief;
- structural analysis of sickness absence in cooperation with the health insurance company;
- encouragement and support of employee initiatives;
- advice on nutrition;
- events with a role model function.
The latter point in particular is directed towards behavioural risk prevention and is intended to introduce a ‘fun factor’ to health promotion. Loewe encourages diverse sports activities. For example, the company instigated a Nordic Walking group and organised a tennis course, as well as ski days and a gymnastics group. In doing so, the company cooperates with local sports clubs, fitness studios and swimming pools, where its employees get a price reduction.
Loewe is also innovative in the areas of HR marketing and personnel recruitment. In the context of the demographic population decline, the company anticipates a future skills shortage. To counteract this expected shortage, the enterprise closely cooperates with schools and universities, and encourages young people to pursue technology jobs and to consider working at Loewe. In addition, with a training quota of around 10% of the workforce, the company is strongly dedicated to the training of its own junior staff.
In conclusion, Loewe has recognised the changing times and addresses the challenges of demographic change with a comprehensive concept. As part of this strategy, the company takes into account health and leadership issues, job design, work organisation, as well as competence and career development. In 2006, the Federal Minister of Labour and Social Affairs, Franz Müntefering, awarded Loewe the title of ‘Unternehmen mit Weitblick’ (‘Far-sighted company’) for its activities in the area of demographic change.
Werner Kotschenreuther, Head of Human Resources, email: