Philip Morris Holland, the Netherlands: Fostering employability
Philip Morris Holland is a cigarette manufacturer in the Netherlands and is part of Philip Morris International. The company practises a proactive employability policy. Employees are encouraged to be aware of career possibilities inside as well as outside the company. While there is no hard data to attest to the benefits of the policy for the company, success can be measured by high job satisfaction and low staff turnover.
Philip Morris Holland (PMH) is a cigarette manufacturer in the Netherlands and is part of Philip Morris International (PMI). PMI has more than 60,000 employees worldwide. PMH in the Netherlands hires about 1,750 workers. Most of the production is intended for export. The head office of the international branch is located in Switzerland. The tobacco industry has recently come under pressure due to negative publicity (American lawsuits) and regulations concerning the use of tobacco. However, the prognosis for the coming years is favourable.
Of the 1,750 workers in the company, about 1,250 work in the production department. The mean age of the workforce is 41 years. In the production department and in technical functions, the majority of the workforce is male (90%). Turnover of staff is low at 4.2%.
The company has an active works council, with 15 members. Their ambition is to be a valuable interlocutor for management, who can discuss the company’s strategy while taking into account the interests of the company as well as the employees. To work more professionally, at the start of their term the competence profiles of all members were assessed. Tasks were assigned based on the competence assessment. Conditions of employment are negotiated with the trade unions and are stated in a collective agreement. The works council supervises the implementation of the agreements. About 1,200 employees are members of a trade union.
Description of the initiative
Since 1997, PMH has pursued a proactive policy regarding employability. The initiative for this policy came from the HRM manager at the time, who objected to the former paternalistic attitude of the company. He wanted employees to be more aware of their possibilities and to think more about their future working life, which could be in or out of the company. Moreover, an active employability policy would lead to engaged, motivated and flexible employees.
Management has discussed the intended employability policy with the works council. They agreed that members of the works council would act as a pilot: they were offered the opportunities that would be offered to the complete workforce after (and if) they positively assessed the initiative. After the pilot, the works council and management agreed on the introduction of the current employability policy. Moreover, arrangements regarding the policy are stated in the collective labour agreement agreed with the trade unions.
Employability is defined in the company as ‘the ability to react to changes in working tasks and working environment, taking into account one’s own wishes and possibilities’. Therefore, workers need to be aware of their own possibilities and to stimulate their usability. The company has set itself the objective to stimulate and facilitate employability as far as possible. This intention is reflected in many aspects of the company’s general policy, which is meant for all employees. There are no target groups. The project Loopbaan in Beweging (meaning Changing Career) deals explicitly with the employability policy, but employability is also incorporated in other aspects of the company’s general policy.
Local human resource management functionaries are working in every department. Workers can consult them on questions concerning their career. These functionaries are trained in careers counselling. Next they could consult the employee development department. A following step could be participation in the Loopbaan in Beweging project, which consists of a two-day workshop. PMH compensates the worker for all costs, but not the lost working days (workers have to take two days off). With the assistance of a service specialised in career issues, individual themes are handled, such as availability, education, hidden motives, principles, personal competences and hindrances. Requests for education, training or support resulting from these workshops will be compensated for by PMH, even when it concerns a career outside PMH. In the past five years, about 900 employees have participated in the project. After participation in the project, only about 14 people decided to continue their career outside PMH.
Internal mobility is stimulated in the company by temporary look-arounds to get acquainted with other departments. The company’s ambition is to have a structure with one mobile team member in every team in order to offer everyone the possibility to change function and/or workplace on a regular basis. However, it could still happen that someone is in the same function for 22 years.
Employability is a collective responsibility. Both the employer and employee should be aware of the advantages of flexible and broad availability. For the employee, this means lifelong learning, chances for growing and development and investments in the future. For the employer, the advantages are flexibility needed for technological innovations and fluctuations in demands. Therefore, both need to invest: the employer invests in financial support for costs of study and the costs of supernumerary staff to enable workers to acquire work experience in other departments. The employee needs to show initiative and to be cooperative. The investments in workers do not need to be free of engagement from the worker’s side. The unions agreed on this with the company management. Therefore, a clause was recorded in the collective labour agreement that refusing to cooperate could have negative consequences.
The policy has not been evaluated systematically, as its success could not be shown with hard figures. Interviews with employees led by a research organisation (TNO Work and Employment) show that they are satisfied with the new developments. They all report a better atmosphere. According to the works council, PMH is a playground for human resource management activities. Everything is possible and everything is allowed. The investments in employees’ development are huge. Moreover, the regular consultation of their colleagues has confirmed the works council’s opinion.
Employees’ satisfaction is also shown by the low percentage of staff turnover (4.2 %). Some 60% of employees have worked for the company for more than 11 years. This low staff turnover is not due to poor career perspectives, as employees have many possibilities to enhance them.
Nevertheless, not all workers were always satisfied with the company’s policy. Some workers perceived the stimulated training and self-fulfilment as an undesired obligation. Not everyone could or wished to participate. However, in most cases, problems could be solved.
The key to success seems to be the management’s conviction that to secure the future of the company and its employees, it is imperative to invest in motivated and flexible workers: ‘you have to believe in it’. If management was only based on hard figures, to invest in the career perspectives or employability of personnel would be rare, since benefits of these investments are hard to quantify. Making employees more aware of their wishes and career perspectives could also mean horizontal mobility or even falling back to a less-demanding position. It could also mean that employees leave the company to fulfil their career wishes. Nevertheless, the high job satisfaction (according to the interviews mentioned before) proves the policy’s success.
It should be noted that the company was in a luxury situation when they started the initiative, as the company was economically successful. Although Philip Morris International did not always understand the Dutch policy, it acknowledged the success of the company and was prepared to supply financial support. Consequently, PMH could release someone from his normal duties to deal with the employability policy for two years. Nowadays the policy has proved its merits.
Exemplary and contextual factors
PMH operates a proactive employability policy. Although the international company supports the policy, the Dutch policy is unique in Philip Morris International. It could be easily implemented in other firms as long as they are prepared to invest in their own personnel without seeing results demonstrated in hard figures.
Swenneke van den Heuvel , TNO, Hoofdorp