In order to get more people to work, this year, the Juncker Commission will help make a real and substantial difference in these crucial areas by implementing a youth investment plan and mobilize €315 billion investment plan, which can allocate money for strategic areas such as education, research and innovation as well as support for risk finance for SMEs. This offers a big opportunity for Croatian Government and Croatian Companies! Several EU countries already started concrete projects in this plan.

The answer is very simple and very concrete: NO, absolutely not !!
We can look at this at different levels.
On a macro scale we can read a recent European Commission report which shows that countries that reformed their labour markets and invested in human capital proved to be more resilient during the economic crisis and that they recover faster.

Learning lessons from the past
The Commission looked into the lessons that could be learnt from the recession and found that the negative impact on employment and incomes was smaller for countries with more open labour markets, made stronger investments in lifelong learning and had less segmented labour markets like Denmark, Austria, Sweden and the Netherlands. They are the ones that have shown bigger resilience to the crisis. They make effective use of lifelong learning, cover many of the unemployed, are linked to activation, and they are better responsive to the economic cycle. 

Investing in Human Capital
Countries providing high quality jobs and effective social protection as well as investment in human capital have proved to be more resilient to the economic crisis. This is one of the main findings of the 2014 Employment and Social Developments in Europe Review.

It also stresses the need to invest in the formation and maintenance of the right skills of the workforce to support productivity, as well as the challenge of restoring convergence among Member States.

Of course job creation requires structural reforms, for example reducing labor costs for low-skilled workers and young people. But Social Investments are also helpful during economic downturns, as they help people reach their full employment potential and adequate protection throughout their lifetime. For example, countries such as Malta, Luxembourg and the Netherlands, which have invested in early childhood education, have demonstrated a significant increase in the employment rate, the Commissioner said.

The Review notes that a number of Member States are progressively moving towards a social investment model that promotes people's potential throughout their lives and supports wider labour market participation. Past reforms to bring more women and older workers into work have helped maintain activity rates in Europe. This confirms the need to continue with labor market reforms and the modernisation of social protection.

In order to get more people to work, this year, the Juncker Commission will help make a real and substantial difference in these crucial areas by implementing a youth investment plan and mobilize €315 billion investment plan, which can allocate money for strategic areas such as education, research and innovation as well as support for risk finance for SMEs.

This offers a big opportunity for Croatian Government and Croatian Companies! Several EU countries already started concrete projects in this plan.

Better skills matched by better jobs
In the face of an ageing but declining population in the EU, investment in human capital is essential to support productivity and ensure a job-rich and inclusive growth in the future.

The Review underlines that effective human capital investment requires not only education and training in the right skills, but also adequate frameworks to help people to maintain, upgrade and use those skills all through their working lives. In this sense, appropriate policies are needed to prevent human capital from being wasted through inactivity or underutilisation of people's employment potential. That is not only a task for Governments but certainly also for companies.

Restoring convergence

Finally, the Review also underlines that restoring socio-economic convergence is another important task following the crisis years, particularly concerning Southern and peripheral EU 15 Member States.

Behind crisis induced divergence lay not only the size of the economic shock but also structural imbalances which were already present before the crisis in the most affected countries, such as weak productivity, lack of investment in human capital, weaknesses in their banking sector and property bubbles, and in their welfare systems.

On a meso level companies have to invest in their people and be highly capable in 22 key HR topics to consistently realise a better financial performance than the less capable, as I already wrote in my August 2012 column. In several topics, this correlation was up to 3.5 times the revenue growth and as much as 2.1 times the average profit margin. In this table you see the economic performance of HR-driven companies over a period of 10 years compared to less HR-oriented companies.

(http://www.poslovni-savjetnik.com/blog/management/john-lodder-higher-results-and-profits-excellent-human-resource-policy)

What can you do? What should you do?

Change your company culture
Transform your management style
Improve the role of HRM
Put Customer Service, Creativity and Innovation on top of your Change Program
Leadership is about People

1 - Change your company culture

Companies wait for the Government to act but Government often does not. The goal of any company is to make profit, increase market shares, and improve financial ratios. You can only succeed with a motivated and well educated staff, with employees that take initiative and come up with ideas, proposals and suggestions to improve. With the current way of ‘hiring’ and ‘treating’ your employees this will not work.

In general your company culture should score high on values like respect, trust, openness, people orientation, innovation, teamwork and cooperation. Both internally and externally focused.

2 – Transform your management style

Be a leader and not a bully. Give trust and receive commitment. Give space and receive ideas and proposals. Give ‘smart’ assignments and receive better results. Use humour and give compliments to get engaged and motivated people in your company.

3 - Improve the role of HRM into a strategic and proactive partner

In successful companies HRM is a strategic partner in and for the Board. For HRM it means that they should take a proactive role in aligning their HRM-policy to the strategy of the company. Several steps can be taken, like:

• Investing in the formation and maintenance of the right skills and competences of the workforce to support productivity
• Moving towards a social investment model that promotes people's potential throughout their lives and supports wider labour market participation
• Bring more women and older workers into work that helps to maintain experience and moderating in companies
• Better skills matched by better jobs
• Investment in human capital is essential to support productivity and ensure a job-rich and inclusive growth in the future.
• Effective human capital investment requires not only education and training in the right skills, but also adequate frameworks to help people to maintain, upgrade and use those skills all through their working lives.
• An increase in the supply of skilled human capital needs to be matched by an increase in the supply of quality jobs, in order to yield a more productive workforce.  

4 - Put Customer Service on top of your Change Program
Successful companies put their customers first. In the end you cannot be successful if you treat your customers as cattle. In the supermarket you see 15 checkouts of which 3-4 are open for customers to pay. Long waiting rows of complaining customers. They complain inside and outside. What does it mean for your brand and for your image?

As a manager, have you ever had the ‘pleasure’ to wait 20 minutes in the supermarket to be allowed to pay for your shopping? How did it feel for you?

As a manager, did you ever talk with your customers about their satisfaction? You might be surprised to learn from them.

Do you know why Your Customers change to your competitor? (Based on Tom Peters)
* 14% because of price,
* 15% because of quality
* 71% because of lousy service.

5 - Why leadership is only about people (Based on Gary Kelly)
There are five principles essential, in order to be an effective leader:

Leaders Must Care
Leadership is about people. Period! Great leadership is about inspiring people, serving people, caring for people, and caring about people. You have to tell them you care.
Somehow, some way, you have to convince people you care about them. And in turn, your people will be ready to help you win great battles.
Not only your employees, also your Customers.

Leaders must communicate
Not communicating well is one of the biggest mistakes a leader can make. When leaders do not communicate well, the consequence is employees do not feel valued or important. For that reason, I cannot think of anything more important in leadership than communication. Ask for people’s opinion. Communicate about everything.
By definition, leadership involves a group of people. To get any group to work together, you have to encourage and foster teamwork. How? You have to communicate. But, you have to communicate in the right way. It is a matter of respect: truly, genuinely respecting others’ opinions.
Any time you work with a group, you should expect disagreement. That is okay. You should embrace dissent. Teamwork is not about “going along.” It is about hearing all views honestly, admitting mistakes vulnerably, and sharing risks and rewards jointly.

Leaders must have character
To be a great leader or a great team member, you have to have character: honesty, integrity, respect for others, and selflessness. You have to be not just willing, but eager to work harder than anyone else. There is an old saying that adversity does not create character, it reveals it.

Leaders must be competent
To be a leader, of course, you have to know your stuff. You must be competent, under promise and over prepare. The various technical aspects of a profession are the easier parts of the job. It is the human relationship side that is the most challenging part of your job: you cannot underestimate it!

Leaders must have courage
Finally, it goes without saying, leaders must have courage. It is very hard to be a leader. It is a lot easier to be a follower. It is a lot easier to let someone else own the problem or make the decision. It is a lot harder to stand up, speak up and be accountable.

John Lodder, M.A., MSc.
www.balance-consultancy.com