Labour market change

Just 31% of companies capitalise fully on direct employee involvement to enhance performance and well-being

Fewer than one-third (31%) of companies in the EU27 facilitated the regular direct participation of employees in organisational decision-making and accorded them a high degree of influence last year. This is despite research showing that businesses that combine direct employee involvement, with high levels of job complexity and autonomy, and comprehensive training and learning opportunities, do best in terms of both performance and well-being. Over half of establishments in Sweden (56%) and Denmark (55%) were characterised by regular, high influence direct engagement with employees, but only around a fifth in Poland (20%) and the Netherlands (21%).

These findings, discussed at a special #AskTheExpert webinar on 20 October, are detailed in the fourth European Company Survey, conducted in partnership between EU Agencies Eurofound and Cedefop. It provides information on workplace practices, human resource management, skills and development, employee participation and social dialogue from 21,869 human resources managers and 3,073 employee representatives in the 27 EU Member States and the United Kingdom during 2019.

The research analyses the different tools companies used to engage directly with employees. The vast majority of establishments (94%) in the EU27 use meetings between employees and their line manager as a way to engage with employees. These are held regularly in 59% of establishments and irregularly in 36%. Regular meetings between employees and their immediate manager are most prevalent in Sweden (82%) and Austria (76%) and least prevalent in Poland (42%) and Croatia (43%). Large establishments are more likely to hold regular meetings between employees and their immediate manager (66%) than medium-sized (62%) and small (58%) establishments.

Direct and indirect employee participation, facilitated by open and meaningful social dialogue, is crucial for both employees and companies.

— Maria Jepsen, Eurofound Deputy Director

Feedback from management in the survey revealed that most managers believe that there is more to gain than lose from close, regular and influential employee engagement. Although around one-third (32%) of managers reported that, in their opinion, involving employees in the implementation of changes causes delays, more than two-thirds (70%) of managers reported that involving employees in work organisation changes gives the establishment a competitive advantage.

The research also looks in detail at indirect employee involvement through social dialogue. An official structure for employee representation, such as a works council or trade union delegation, is present in 29% of EU27 establishments. Larger establishments are much more likely to have an employee representation structure (76%) than medium-sized (51%) or small (23%) establishments. Overall, structures for employee representation are most common in Romania (56%) and Finland (55%) and least common in Greece (2%) and Latvia (4%). Managers in 80% of the establishments where an employee representation structure is present reported a general constructive attitude towards employee representation.

Speaking about the findings, Maria Jepsen, Eurofound Deputy Director, emphasised the importance of employee voice in companies across Europe: ‘Direct and indirect employee participation, facilitated by open and meaningful social dialogue, is crucial for both employees and companies. Not only can it boost performance and well-being, it can also provide pivotal decision-making structures when job losses or significant shifts in task allocation take place. This is especially the case now that COVID-19 is dramatically impacting companies across Europe.’

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