ZF Hungaria, Hungary: Comprehensive approach
ZF Hungaria values the experience of older workers and the high quality of their work and has implemented a wide range of welfare measures which offer a career for life
ZF Hungaria Kft in Northern Hungary was established in the 1950s to produce Ikarusz bus components. The company was privatised and sold to the German firm ZF in 1996. The units of the company are: manufacturing, assembly, machine tools unit, service unit, product development and a design and test plant. The products are sold on the world market. The turnover and number of employees have increased several times. In 2000, ZF gave the company the right to test products and run trials of prototypes. The labour force will be increased by 20% to 30% in the near future.
ZF Hungaria Kft has a total of 1,100 employees, 90% of whom are men. Close to two-thirds of the total are skilled blue-collar workers. The remainder of the workers are engineers and office workers. The company has always had Hungarian management (with a German general manager). The proportion of the different age groups is: below 39 years, 55%; 40 to 44 years, 19%; 45 to 49 years, 9%; 50 to 54 years, 11%; and 55+ years 6%. Two thirds of the labour force in the production units are pensioners. Fluctuation in employment is very low.
The company has had a collective agreement with a trade union for many decades. A works council also operates and company plans are discussed with them.
Description of the initiative
The company’s production of components for buses and cars requires workers (fitters, cutters, welders, etc.) who have long experience and precision. Such workers are now in short supply. The company can only guarantee its competitiveness on the world market and its expansion by producing quality products. Workers over 45 years of age produce good-quality products and the company has a number of employees beyond retirement age who are active in production. Pensioners are also employed (full-time or part-time) to ensure smooth production. Older workers are employed because of their precision, experience and their dedication to their work.
The wage system incorporates a 20% element rewarding quality and a monthly evaluation of production workers to control performance (bi-annually in the case of white-collar workers). The more experienced, generally older, workers are better able to meet the quality requirements and therefore their salary is often higher.
Besides keeping older workers at the company, the organisation places great emphasis on recruiting new workers. The firm signs study contracts with young people in vocational training schools and students at technical universities. It has two training workshops for those with secondary vocational certificates, has set up a talent bank (for young workers) and also has an R&D centre.
In the view of management, the attitude of older workers to production and the way they are esteemed has a positive influence on young workers. The relationship between pensioned employees and young workers is even more positive. The pensioned employees in particular gladly share their knowledge with the young people (there is no professional jealousy at all).
Production is organised in two 12-hour shifts with three days work followed by three days off. This work schedule is advantageous for both the employer and the employees. It ensures continuous production and in contrast with an eight-hour schedule it gives employees three days off per week.
The company pays attention to education and training to update and widen the knowledge of employees. Language knowledge (English and German) is essential and the company regularly organises traditional and intensive language courses.
ZF Hungaria Kft company’s general HR policies cover a wide range of measures: social security, health services, leisure opportunities, education, training and well-being. The firm has a pension fund and a health fund managed by banks and provides high-level free health services. It also has its own 50-place kindergarten (high quality care, speech therapist, gymnastics and language teaching). The generous welfare policy encourages long employment. Workers do not want to leave the company and would rather find a job there and stay as long as possible.
The management has a successful social dialogue and good relations with the local branch of the Ironworkers’ Union. The trade union and works council are considered as partners in all matters, including negotiations and coordination of problems.
Possible transferable elements are the monthly quality control audit and wage/income incentive based on this and a wide range of welfare policy measures.
The company intends to continue the same policy in the future.