· 2 min read · Features

The recession has tested some of the cosier rhetoric around employee engagement


In March 2009, in Pontonx-sur-l’Adour, south-west France, Serge Foucher, CEO of Sony France, was taken hostage by workers in one of the company’s factories, which was due to close with the loss of 300 jobs. The workers objected to both the closure itself and the severance terms on offer. As a result, Mr Foucher spent the night shut in a meeting room after staff barricaded the entrance to the site with tree trunks.

In a similar scenario the same year, the director of 3M's French operations, Luc Rousselet, was held hostage at a plant south of Paris. The Huffington Post, in a helpful if understated commentary, told its readers: "In France, it is not unheard-of for striking workers to hold company executives hostage as a way of winning concessions from management. The hostages are almost never injured."

Economists have been scratching their heads over various aspects of the current downturn. One of the most confounding elements in the UK has been unemployment, which has risen neither as high nor as quickly as economic theory would predict. One answer to this is that more businesses - and their workforces - have behaved differently than in previous recessions (though perhaps not in some workplaces across the Channel).

More specifically, firms have tried to avoid job losses by confronting the crisis through collaboration. In the UK there has been a growth in the number of businesses adopting short-time working arrangements or temporary lay-offs. Such measures have provided a helpful 'buffer' between the collapse in demand for products and services and the need for job losses.

The Honda plant in Swindon has been a good example of this kind of cooperation. It also illustrates the pragmatism needed to confront a difficult business climate. With the collapse in demand for cars, Honda decided the plant should close for four months in January 2009, and although 1,300 workers took advantage of voluntary redundancy, the remaining 3,400 agreed to a 3% pay cut for 10 months, with managers reducing their pay by 5%.

Employees received full pay for two months followed by two months on 60% of their earnings. On returning to work four months later, one worker said: "Taking a 3% pay cut is not a big deal. It could have been worse. In Japan they are having to take 10%. Everybody is glad to be back because four months off is a long time and there's only so much golf you can play."

As we saw in January, however, with Honda declaring another 800 posts at risk, even this kind of 'hunkering down' cannot inoculate businesses against fluctuations in the global demand for cars.

Nor have such tactics saved Jessops or HMV. Germany, Holland, France and Italy all have schemes whereby government subsidises the pay of staff on short-time working. Germany's scheme, known as Kurzarbeit, pays 60% of the net pay of workers for the days laid off, rising to 67% for those with children.

What I find interesting about all of this is that the recession has put workplace employee relations, leadership and trust under high-pressure scrutiny. It has tested some of the cosier rhetoric of 'employee engagement' and challenged the assertion that the UK labour market and its workforce is inherently inflexible. Businesses - and their employees - have demonstrated to themselves that, in straitened times, they can join together to arrive at workable solutions based on realism and consent rather than distrust and conflict. For these firms, as long as all parties act in good faith, there can surely be no going back to the old ways of resolving difficulties or disputes. And therein is a lesson for us all.

Stephen Bevan (pictured) is director of the workforce effectiveness centre at the Work Foundation