Sanatmetal, Hungary: Comprehensive approach
Sanatmetal has initiated a comprehensive plan to reward and retain older employees. Due to the specialised nature of its products, the long experience, skill and knowledge of older workers are essential and highly valued, resulting in a high average age of employees.
Sanatmetal Orthopaedic and Traumatological Instruments Manufacturer Kft, based in Eger in Northern Hungary, was established in 1968. Sanatmetal was privatised in 1993 and is wholly Hungarian-owned. The company produces prostheses and therapeutic instruments, and designs, produces and sells its own products. In recent years, subsidiaries have been set up in, Germany, Romania and the United Kingdom. Sanatmetal’s products are sold in Hungary, the EU countries, China, Mexico, Australia and in some Arab countries. The company has won a number of prizes for quality and has a growing market. The labour force will be increased by 8% in the near future.
Sanatmetal employs 150 persons and is directed by eight managers, six of whom are men. Two-thirds of the total labour force consist of blue-collar workers, and 80% these workers are men. Women in production do lighter work, such as packaging. The white-collar workers perform design, sales and administration work.
Half of the blue-collar workers are older: 40% are aged 50 to 54 years of age and 10% are over 55. Pensioners are also employed in production (their proportion is 5%).There is no fluctuation.
There is no trade union, works council or collective agreement.
Description of the initiative
Sanatmetal makes highly precise implants of steel and titanium for use in the human body. Even the tiniest fault in an implant can cause harm to the recipient. Experience that can only be acquired over many years is therefore essential for the manufacture of these products. The company faces a double challenge in meeting this condition: it needs skilled workers who are currently in short supply and who also have experience. Older workers meet both criteria which explains the high proportion (50%) of employees over 50. In the course of the work, older workers pass on their experience to younger workers. Without the older workers, most of the younger workers would be unable to meet the firm’s quality requirements. Relations between young and older workers are very good; the former look up to the older workers who in turn value this respect.
Wages are increased substantially each year. A system of differentiated hourly wages is applied, which takes into consideration the quality of the work, the time spent with the firm and performance. Workers who have been with the company longer, and are therefore older, produce better quality products in general and thus earn more.
The older age group is in a favourable position when positions of workers leaving on retirement have to be filled. In the past five years, the company has hired six workers over 50.
The work ethic of older workers is judged to be superior to that of younger workers:
- older workers are more precise, pay more attention to the work and value their jobs;
- their reliability and loyalty to the firm are important for the company.
Retired workers are also valuable because of their experience. At present, seven retirees, or 5% of the workforce, are employed.
Twelve-hour shifts, which allow more days off, are standard in production. Due to the extra days off, 12-hour shifts are preferred by production workers, especially in the case of commuters.
Informal events, such as dinner parties for all employees in a restaurant, are important. The family atmosphere is combined with the distribution of rewards for good work. The aim of the informal events is to create a family atmosphere and foster a sense of well-being in the workplace, which prevents the emergence of rigid hierarchical relations. The dinner, followed by entertainment, is very popular and all employees look forward to it and participate.
In addition to its practice of rewarding employees – in which many older workers have been involved – the company has recognised the importance of extra rewards for older workers and is considering a system intended specifically for older workers.
Sanatmetal’s incentive initiative shows that, in addition to the wage-type elements, other elements directed towards both the individual and the community, such as increasing prestige for older workers, play an important role. This practice can be incorporated into the HR policies of any firm and is highly likely to have a positive effect. It is also important that the company’s HR management recognises that the loyalty and prestige of older workers, and consequently their performance, can be further enhanced by developing a reward system specifically for them.