Competitiveness and employment challenge banking sector

The Austrian banking sector is struggling for greater productivity and profitability in 1999 in a bid to preserve independence and market share. The banks are aided by new technology and EU Economic and Monetary Union, and the social partners have made efforts to preserve employment in the wake of these developments.

A series of collective agreements are being concluded in the banking sector that aim to maintain employment, pay and working conditions while at the same time advancing productivity (AT9901121F). This is in line with a joint declaration of the Austrian Chamber of the Economy (Wirtschaftskammer Österreich, WKÖ), in conjunction with the banking sector's employer associations, and the Money and Credit Section of the Union of Salaried Employees (Gewerkschaft der Privatangestellten, GPA), concluded on 4 May 1998. This declaration aimed to build momentum for better training and skills in order to combat the threat to employment that the introduction of EU Economic and Monetary Union (EMU) could potentially pose from 1999. The social partners agreed to expand the banks' services, to train and retrain staff in depth and to encourage job mobility in order to avoid redundancies.

Though prompted by EMU, the joint declaration also clearly stated that technological advances presented the greater threat to banking employment. New ways of doing business - for example through call centres or directly on the Internet, or through the introduction of new more intelligent bank cards that transfer more transactions to machines - are expected to reduce staff. The Internet is extremely popular with the banks because the cost of customer transactions is less than 10% of the cost for traditional banking.

In the rural savings subsector, which employs 5,000 people, management claims that 2,000 jobs will be gradually lost owing to direct Internet and telephone banking. The sector's centralised infrastructure includes one Internet provider and three call centres. Management maintained in September 1998 that it had acquired 10,000 customers in eight months of direct banking. Austria's largest bank, between 1991 and 1997, shed about 2,400 workers - 15% of employment in its enterprises. None of the employees was made redundant but an early retirement scheme was implemented in 1995. Not including the latter, about 6% of the entire sector's employees retire or leave for other reasons every year.

There are about 3,000 bank branches in Austria - or one for every 2,700 inhabitants - of which 10% are expected to close by 2002. After a two-year decline, employment in the banking sector grew steadily from 1993, when it stood at about 68,000, to a peak of 75,700 at the end of 1996. Employment at the end of 1997 was 75,244 and is now expected to have fallen below 75,000 by early 1999.

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