Olivetti Spa, Italy: redeployment, training and development
Formerly one of the world’s biggest information technology companies, Olivetti was founded in 1908 and began by manufacturing typewriters. In 1946, it started manufacturing calculating machines and later it moved into the production of big computers and personal computers.
In the mid-1990s, competition in the personal computer market influenced the company’s decision to move into the mobile telephony (Omnitel) and fixed-line telephony (Infostrada) sectors. A few years later, in 1999, Olivetti reorganised its productive core into several autonomous companies, some of which were later sold. The remaining companies became a single company, Olivetti Tecnost, which was taken over by Telecom Italia in 2005 and became Olivetti Spa.
The company’s human resource policies are based on promoting professional growth throughout employees’ working lives with particular attention to older workers. These policies have been maintained since their origin at Olivetti in 1994 when the company had over 30,000 employees and continue today at Olivetti Spa, which has 1,800 employees.
The company’s evolution during the last 10 years has resulted in a higher proportion of older workers (40% are aged over 40 years) in its present workforce. It has also meant that these older employees have experienced various redeployment cycles, as well as early retirement and outplacement of their colleagues.
These difficult phases of crisis and reorganisation were managed by continuous contact with the trade unions and through specific agreements, starting in 1994.
The original initiative
In 1994, a number of economic crises necessitated a reorganisation of the company. As a result, Olivetti launched a redeployment initiative, which included a programme aimed at updating workers’ skills. The initiative involved all of the 425 employees who needed to be redeployed, but particular attention was devoted to the older workers. The reorganisation adversely affected all workers and was particularly difficult for older workers, most of whom did not have either the resources or the personal skills to adapt to new tasks.
Agreements were reached with the trade unions after negotiation. Of the 425 workers, 325 were redeployed within Olivetti and the rest were outplaced to other, associated companies. When the initiative ended in 1995, more than 80% of the workforce was redeployed while the remaining 20% voluntarily left the company at the end of the programme.
After this largely positive experience, reorganisations at Olivetti were usually dealt with through similar initiatives. In 2002, again following a market crisis, Olivetti Tecnost implemented a programme involving 800 workers, 40% of whom were older than 40 years. It succeeded in redeploying 610 workers, mainly by enhancing older workers’ linguistic, problem-solving, mathematical and information-technology skills.
Good practice today
In 2005, Olivetti Spa started a new initiative aimed at training workers and updating their skills, in order to redeploy and outplace those who lacked the skills needed, as a result of the company’s evolving technological focus.
The company wants to relocate its production of bank-document printers to a lower-cost facility in Asia, and focus instead on making new products for the consumer market, such as portable printers for digital cameras and ink-jet multifunctional systems. This has required the recruitment of 60 new workers; however, it has also led to the loss of 200 jobs, held mostly by men and by those (58%) aged over 40 years. Of these 200 workers, 60 will be redeployed to make new products and 140 will be outplaced in the three new companies set up following the reorganisation of Olivetti Tecnost in 2002.
The company’s retraining programme aims to pay particular attention to developing basic logical-mathematical, linguistic and information-technology skills and to updating the specialist skills that workers had acquired in their previous jobs. The entire retraining and redeployment programme is being negotiated with the trade unions. The company has assured workers that redeployment will not involve any reduction in wages or status; some workers might even be upgraded from blue-collar to white-collar status.
The impact of this training programme, now underway, on older workers is critical because of their low level of education and also because they perceive the cessation of their former jobs as an end of their value systems and of a secure professional life. The new initiative highlights the holistic nature of retraining programmes, which not only serve the company in times of crisis, as in the past, but also benefit employees’ development and level of specialisation.
The retraining programmes tend to be ongoing, largely because the lifecycle of high-technology products is short and new markets develop quickly. Three factors in particular, related to continuous change, have an affect on workers’ professionalism, especially that of older workers:
- relocation of production to other geographic areas – causes redundancies of workers who must be redeployed;
- technological and market innovations – can render a wealth of specialist skills, the result of long years of work, redundant unless they are updated through various retraining programmes;
- need to develop new specialist skills – often based on basic knowledge and skills.
Older workers, in particular, can find these factors difficult to face because of the:
- increasingly painful perception of the precariousness and fickleness of their jobs compared to their former, more stable positions;
- inadequacy of their education and the related lack of perspective to properly understand the reasons for and significance of the changes, and to find ways to deal with them;
- complexity and rigidity of the social structure (family, social relationships, home, etc) that characterise most older workers’ lives and make their mobility (job and geographical) painful and hard to organise.
Management says that the redeployment initiative (which aims to redeploy all redundant workers without any loss of jobs) shows that basic skills have become more significant than specialist skills. Therefore, the company plans to focus on these types of skills, through specific and personalised programmes of continuous training and ongoing education.
Salvatore Zagami, Responsible for industrial relations, personnel management and development
Federico Bellono, FIOM CGIL Provincial Secretary, Turin
Company website: www.olivetti.it