Karlskrona Employer Ring, Sweden: Fostering employability
The employer ring in Karlskrona is a joint venture between seven companies – mainly in the manufacturing business – covering a total of 6,000 employees. The ring was established in 1992 and is a joint organisation formed in order to support the members on retraining and redeploying employees in their companies who have been made redundant or are in need of work rehabilitation in other workplaces. The ring supports the individuals with job coaching, transfer and training.
Karlskrona, a mid-sized Swedish town in the south-east, is an industrial and administrative centre in the region of Blekinge. Seven companies, covering a total of 6,000 employees, have formed a so-called employer ring cooperating on mobility, rehabilitation and training. With more specialisation and downsizing, the companies need to widen their internal labour market and thus secure employability and support flexibility and personnel supply. The companies and members of the ring include ABB (cable production), Flextronics (electronic components), Karlskrona Shipyard, Metso Dynapac (road machine production) and Roxtec (cable production) – in total, about 1,500 employees. The companies are all affiliated to the employer organisation and most employees are members of the Metal Workers Union.
Employer rings were originally developed in Sweden in the early 1990s as a response to new legislation on increased responsibility for employers on work rehabilitation, either to adjust tasks and tools to the employee or to transfer or retrain him for suitable tasks in the organisation.
At the time, the initiatives were also supported by the Social Security Board (SSB) and national development funds. The SSB finances the salaries for long-term sick leavers and can also pay a salary for a limited time of work rehabilitation/training. The idea was for employers to cooperate and widen their possibilities in getting transfer jobs for those who needed new tasks and/or a new work environment. Today, employer rings have been revitalised in order to cope with the high rise in sick leavers over the last seven years. There is also a specific programme financed by VINNOVA (the National Agency for Innovation) supporting new, innovative forms of employer cooperation and, among this, the development of employer rings.
Description of the initiative
The Karlskrona ring began its operations in 1992. It was constructed as a limited company partly owned by the ring administrators and partly by some of the company-members. It is run by a steering committee, which also has representation from the unions.
Each company pays a yearly fee to the ring to get support when called for and undertakes an obligation to receive employees for work practice and possible employment from the other members. The original aim was to support employees in need of work rehabilitation (long-term sick leavers or other needs for job change). The ring also involves other kinds of cooperation, such as job pools and knowledge sharing. Depending on the company situation, the ring also gets assignments on redeployment for redundant personnel. The ring is led by a steering committee from the member companies, which also includes union representatives. Two main ring administrators run the operations, taking in additional resources when needed.
The solution in Karlskrona was discussed between a few HR managers in some industrial companies at local network meetings and were later supported by two employees from the local SSB. The two SSB employees late became the main operators and part owners of the ring.
An agreement was signed with the SSB in order to obtain funding for rehabilitation activities. Funding also comes from membership fees from each company-member and occasionally from specific project funding. Members receive services from the ring, but also have an obligation to supply work practice whenever needed.
The ring has developed over the years, very much linked to the development among the members and their needs. The operations are now comprised of three main activities:
- Rehabilitation through a specific guiding programme, ‘the turning point’, working on behalf of the employer company (member) and taking on individuals from companies who have not been able to get an internal rehabilitation or replacement.
- Outplacement activities, i.e. supporting companies in dealing with redundancies due to cutbacks and restructuring. This activity started in the mid-1990s during the economic crisis that saw many closures and redundancies. They are now a certified redeployment actor by the Job Security Council for blue-collar workers, taking on assignments outside of the ring members.
- Administrating a job pool in order to increase mobility between the companies, e.g. supporting one company in need of short-term staff by lending staff from a company with a temporary loss of work (due to seasonal or market change). This has been in action over the last four years and does not involve all members (mainly the shipyard and the road machine production company).
The ring also offers HR support to HR managers and operators in the member companies.
The volume of rehabilitation assignments varies over the years – for example, it was low during the recession in the 1990s. The results are fairly good compared to other rehabilitation methods. An audit of 160 people going through the rehab programme over the years 1997 to 2001 reveals that 20% are back at work and 40% are studying, in work training or at the disposal of the labour market. Another 40% are still on sick leave or up for medical investigation.
The employer ring in general and the one in Karlskrona in particular is an interesting example of the establishment of a transitional labour market (TLM) by widening companies’ internal labour markets (ILM). When the demand for taking care of long-term sick leavers among the company employees rises and the possibilities to find solutions in a very dynamic and lean environment diminish, company cooperation on local (and to some extent regional) labour markets becomes essential. To some extent, the ring can be seen as an extension of each company’s HR department. From another perspective, it is an extension of a public undertaking in the labour market.
Most employer rings have focused on outplacement for personal reasons (sickness, rehabilitation, etc.) more than cooperation on a more structural level. The Karlskrona ring is exceptional in this regard in that it also includes active measures on redeployment and staffing. They are now taking part in an equal project on early activities to prevent long-term sickness. An important aspect here is the member companies’ active part in the operations as a very tight network.
The HR managers in the member companies have gained approval internally in their respective companies. Line managers are often those who have direct contact in redeployment issues. When asking the companies about their motives for being in the network, the primary ones are to lower the costs by getting faster rehabilitation processes while at the same time fulfilling a socially responsible code of conduct. The unions in the companies (in most of them representing over 80% of the employees) are very positive about the ring in that it improves the employability of their members.
The ring administrators play an important role as network administrators and facilitators between the company members and as coaches towards both HR managers and the employees. They need good contacts with the Labour Market Board, Social Security Board and among employers outside the ring in order to get a broad supply of workplaces for training and practice. The regulatory system on rehabilitation is unclear in dividing the responsibilities between health care, SSB, employer and employee. The ring administrator becomes a neutral guide for the employee in this system.
Exemplary and contextual factors
The Karlskrona employer ring is an example of how companies can cooperate in a given geographical context to widen their playing field in personnel issues. It was established as a response to legislation but has developed to find solutions for common problems where employee mobility is a focus, as well as meet the need for company flexibility. Whenever they feel the need to, the companies – still individual legal entities – can act as a joint labour market.
Per Tengbland, AB & ATK Arbetsliv, Stockholm