EurWORK European Observatory of Working Life

Škoda Auto, Czech Republic: Comprehensive approach

About

Case study name: 
Ageing workforce
Organisation Size: 
Large
Sectors: 
Motor
Target Groups: 
Professional/managerialSkilled Manual
Initiative Types: 
Comprehensive approachdevelopmentetcFlexible working practicesTraining
Scope: 
Old

 

Organisational background

 

The car manufacturer Škoda Auto a.s. is one of the biggest employers in the Czech Republic and one of the most successful developing Czech companies. Since 1994, Škoda Auto has been part of the German Volkswagen group (VW AG). The company’s headquarters are located northeast of Prague in Mladá Boleslav in the central Bohemian region. An assembly factory and the company’s development, marketing and sales departments are also situated at this location.

Škoda Auto employs about 23,000 workers, of whom about 9,000 work in skilled jobs. Currently, the company is undergoing a gradual restructuring exercise aimed at reducing the number of white-collar workers; only the development department where about 2,000 people work will not be affected by the restructuring. Škoda Auto aims to maintain a balanced profile in terms of the age of its workforce, by keeping the proportion of workers aged 50 years and over at about 22%. With regard to the gender distribution in relation to job categories, the number of male employees is higher at management level than the proportion of female employees, despite the company’s conscious effort to increase the proportion of women in top management positions. The situation is similar in middle management, mainly due to the traditional gender division of jobs and education in technical fields.

Three trade unions are active in the company, the strongest of which represents about 80% of the workers. Social dialogue has a long tradition at Škoda Auto, including the regular negotiation of a company-level collective agreement which provides for a number of employee benefits. Although the issue of older workers is relatively new on the trade unions’ agenda, the company-level collective agreement includes provisions for rewarding older workers who continue working. For example, the company rewards older workers for long-term service; these include rewards granted at work anniversaries and bonus days off with wage compensation. The company frequently employs members of the same family, sometimes even several generations of the same family.

Good practice today

Škoda Auto has traditionally had the image of an employer that cares for its workers. To face the challenge of an ageing workforce, the company is testing a pilot study which aims to revitalise middle management using workers aged 50 years and over. It is also involved in developing a policy for human resources (HR) staff who are preparing for the increasingly pertinent issue of an ageing workforce.

Human resources management (HRM) encompasses three main areas: HR development, efficient personnel management, and personnel services, including wages, social services and catering. In terms of HR development, the company focuses on two issues: cooperating with managers to develop a personnel development strategy; and the training of workers, including adult training programmes, the private university of Škoda Auto and secondary school education. Škoda Auto is currently implementing gradual changes in its personnel policies, moving from a services HR policy to a managerial consultancy approach. Such an approach helps to prepare the company facing the problem of its ageing workforce. It is also part of a wider request from the company’s management to do more for and with workers aged 50 years and over; this demand is based on a demographic analysis of the company’s existing workforce, which shows that about one in five workers belongs to this age group. The demographic situation of the region will also affect the available labour force.

Human resources measures

HR measures target the following three main areas: improved healthcare, vocational training and protection of the company know-how possessed by older workers. In terms of improved healthcare provisions, workers aged 50 years and over have access to above-standard healthcare services in the company clinic, while free access to physiotherapy and other services is currently being looked at. In order to protect company know-how, the HR department is currently preparing a policy document to help prevent a ‘brain drain’ when older workers retire. The proposed measures should include the following aspects:

  • possible forms of cooperation with workers who have retired, for example, in the form of temporary short-term contracts;
  • ways of sharing and transferring experiences to younger workers, particularly those of front-line workers and skilled workers whose positions suffer the most from labour shortages; since these workers ‘cannot be found on the labour market, they have to be trained up by the company’;
  • creation of new jobs and payment systems;
  • adjusting work tasks and shifts in a way that would maximise the work potential of older workers who, due to health-related restrictions, cannot continue working in their original physically demanding jobs, such as assembly line workers; and a system of sheltered workshops which is already in place.

The strategy document should be finalised by the summer of 2007.

Third career project

Part of the preparatory process encompasses the involvement of Škoda Auto’s training and development department in the ‘Third career’ (Třetí kariéra) project, which is co-financed by the European Social Fund (ESF) and the Czech government. The project covers all expenses in relation to training courses for participating companies, including those of Škoda Auto. The third career project is divided into two basic parts. During the first project phase, Škoda Auto’s HR experts in cooperation with the project partners are preparing a strategy to help HR managers evaluate the company’s personnel situation in terms of its ageing workforce. This strategy will also be used to develop a work plan for older employees, which will be available by the end of 2007. The overall objective is to compile a company case study outlining the potential risks and opportunities of an ageing workforce.

The second project phase, which focuses on training, is referred to as the ‘revitalisation programme’; this phase concerns middle management and workers aged 50 years and over. This target group was defined for the pilot study; eventually, however, the project aims to include other groups of older workers. The revitalisation programme consists of a 10-day course implemented in four training sessions. The course covers subjects such as skills training, examples of how to solve real-life problems, and strengthening the motivation and flexibility of middle managers aged 50 years and over. In a recent training course, 10 out of 16 the participants were from Škoda Auto and these were male front-line workers who had been recommended by their superiors. Participants obtain information on healthcare, financial aspects, self-management, team-building activities and other issues. All of the subjects taught are meant to uncover the workers’ hidden potential and aim to open up possible ways of development which could subsequently support them in keeping their jobs. Each training session also includes a discussion with a professionally successful person aged 50 years and over. As part of the training programme, the participants are asked to create their own action plan for personal development and to keep a work diary. A facilitator who is significantly younger than the course participants accompanied the training sessions, which resulted in an open intergenerational dialogue and a mutual negotiation of age identities.

One of the initial concerns related to the third career project was the presumption that selected employees might be unwilling to participate in such a programme, which is explicitly defined as an initiative for older workers. However, these concerns did not materialise; on the contrary, employees positively perceived the attention that the company paid to their interests. For the time being, the only downside of the project relates to the low effectiveness in achieving secondary goals, namely a change of attitude in public debate. The entire project has attracted high levels of media attention, yet articles still deal with older workers in terms of risks and threats for a company. This has never been the project’s intention. In contrast, one of the project’s overall goals is to change the way in which these processes work and to stress the positive potential of older workers. According to the person overseeing the programme at Škoda Auto, the project serves as a model for those companies that have not yet expressed any interest in their older workers, either due to ignorance or a lack of resources. Moreover, the state could play a key role if it decided to reward employers’ efforts to keep older workers in the workforce, for example, by providing tax incentives. In principle, revitalisation programmes are not too costly or time consuming and can save significant expenses related to early retirement and the loss of company know-how.

The project is expected to be completed by November 2007. Therefore, it is too early to evaluate the project’s benefits to the company. However, participants have positively evaluated Škoda Auto’s initiative, considering it to be a reflection of the company’s interest in them and an appreciation of their contribution to the company. The objective is to change companies’ overall perceptions of older employees using the slogan ‘these people are useful for you’, while also strengthening a company culture that invests in the development of its workers’ competencies, irrespective of their age.

Further information

Contact: Alexandra Králíková, email: alexandra.kralikova@skoda-auto.cz

Websites: www.skoda-auto.cz; www.tretikariera.cz

 

Useful? Interesting? Tell us what you think. Hide comments

Add new comment