What does a concession won by a group of German engineers in the south-west of the country mean for workers in the UK? On the face of it, not much. But the engineers’ desire for a better work/life balance could have far-reaching implications for employers and employees across Europe…
Which country is the ‘engine’ of Europe, driving the Eurozone economy? Germany, of course. Which country in Europe produces a remorseless trade surplus, month after month after month? Germany, again – and it was around €18bn (£16bn) in December, compared to the UK’s deficit of just under £5bn.
So it follows that the hardest working people in Europe must be the Germans…
The productivity league table
No, it does not – at least not if you measure ‘hardest working’ by productivity, with productivity measured by taking a country’s Gross Domestic Product (the total value of all the goods and services it produces) and dividing that by the total number of hours worked. The most productive country in the world is Norway, closely followed by Luxembourg – but you could argue that those two countries are a special case. Norway has oil and gas, Luxembourg has rather a lot of ‘companies’ registered there.
So next comes Germany, right?
Wrong. Germany is 7th in the world productivity league table, just below France and above Ireland, Australia and Denmark. The UK? We come 13th – and if there is one certainty in Philip Hammond’s Spring Statement tomorrow, it is that he will once again bemoan the level of UK productivity.
Several of the countries above the UK in the league table work shorter hours than we do – and pay far more attention to work/life balance. But now, it seems, some German workers may be taking that even further.
The German engineers
At the beginning of last month, it was reported that German engineers in the south west of the country were threatening to go on strike. Why? Because they wanted the right to reduce their working week from 35 hours to 28 hours – effectively move to a four day week – in the interests of their work/life balance. Specifically, they wanted the extra time to allow them to care for children, and/or elderly relatives.
With the country’s biggest union, IG Metall, threatening a series of strikes the employers duly reported to the negotiating table and a deal was swiftly hammered out. The engineering workers got the right to a better work/life balance (and a 4.3% pay rise) and in return, the employers gained the right to offer 40-hour contracts to anyone willing to work longer.
Jorg Hoffman, the IG Metall leader, said the deal was, “A milestone on the way to a modern, self-determined way of working.” One of the employers was rather less cheerful, saying the agreement was, “bearable but painful.”
As I have noted above, Germany is by any standards a successful economy: it grew by 2.2% last year, and unemployment is steady at around 5.4% (so significantly above that in the UK, but well below its neighbour France).
The German ruling has wider implications
Clearly, other German workers are going to notice what has just happened down in Baden-Wurttemberg. Workers and union bosses across Europe will in turn note what has happened in Germany.
In one respect Herr Hoffman is right. We are moving towards a more flexible way of working and increasingly, employees are wanting their hours to be self-determined.
So how is this going to impact the UK? After all, if we have a left-wing Labour government and/or continue to be subject to EU rules, both would seem to favour employees having far more influence on working hours and practices.
Two ways of looking at it
Clearly, there are two distinct viewpoints here – the employer’s and the employee’s. By and large, employers want their staff to work predictable – and often long – hours. It is almost impossible to plan shift patterns if half your staff turn up on Monday morning and announced that they will be off on Wednesday afternoon. That, in turn, would impact on meeting production targets and deliveries to customers. Why do I buy so much from Amazon? Because it is easy, convenient and they deliver when they say they are going to deliver. But if 50% of their delivery drivers decide on ‘self-determined working’ I might quickly reconsider that.
Given the demands for a shorter working week, many employers are going to start favouring freelancers – no holidays, no need to pay into a pension – rather than permanent employees. And as we have written several times, the robots are on the march: in big manufacturing plants, robots are going to look even more attractive, especially as they do not have a work/life balance programme…
Look at it from the employee’s point of view though and a very different picture emerges. Millennials – who will make up 75% of the workforce by the middle of the next decade – want different things to their parents. Work/life balance is far more important to them than it was to the previous generation. They want responsibility, to feel that they are making a difference and to work in smaller, more nimble teams. Above all, they want flexibility – and millennials will argue that all the evidence proves that people who work flexibly are happier, healthier and more productive than those who work fixed, rigid hours.
Then there is commuting. Why commute for two hours a day – 500 hours a year – when modern technology and apps like Slack allow you to work equally effectively from home? One day we will look on a two-hour commute in the same way that we now look on driving to Blockbuster in the pouring rain to rent a film. (That is written by someone whose ‘commute’ consists of five minutes driving around the sea-front…)
I am prepared to bet that German productivity will not suffer because engineers in Baden-Wurttemberg want to be at home with their children. But the ripples from the decision may spread out across Europe, offering some employees the choice and flexibility they have always wanted, but potentially making life very difficult for their employers – and making some employers think that they may not need employees at all…