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Employee financial participation in Europe

Verantwortlicher Autor: Carlo Marino Rome, 18.09.2018, 16:17 Uhr
Kommentar: +++ Wirtschaft und Finanzen +++ Bericht 5922x gelesen

Rome [ENA] Differences in business can create a number of barriers and although in the last 30 years, employee financial participation has evolved a lot through Europe, dissimilarities still remain. In 2018 there are around 10 million employee shareholders in Europe and 20 EU countries have some kind of employee financial participation incentive regulation. 2017 was a record year for employee financial participation

with nearly 400 billion euro held by employees. The growing popularity of capital markets in many Member States made available an opportunity for companies to introduce employee share ownership schemes. However, the development of employee share ownership is geographically unbalanced within the European Union, with a lag of 30-40 years between lead and late European countries. Countries diverge from each other, not only in the diffusion of schemes, but also in the type of schemes adopted and their objectives. A number of countries, for example France and the Netherlands, experienced a sharp increase in the proportion of companies using share ownership schemes.

These differences between Member States can be explicated by the presence or not of adequate legislations. For instance, in some countries like Czech Republic, Estonia or Slovakia, employee share ownership plays no major role in the economy and none, or very few, policies were implemented by the Member State. Italy recorded a substantial increase in employee financial participation only in the late 1980s, at a time when companies were implicated in the process of deep restructuring and were oriented towards applying more collaborative labour relations. Before 1988, only a small number of workers were involved in employee financial participation.

Until 1996 legislative provisions and tax concessions to encourage the diffusion of wage participatory schemes were totally absent in Italy. On the contrary, significant fiscal incentives favouring employee share ownership can be observed in 15 countries of the EU (only 12 in 2015), like Spain, France, Sweden or Cyprus. Other countries also provide a legal framework for employee ownership schemes but without any fiscal incentive. Financial involvement is a key human resource management practice, expanding democracy at the workplace and, as the success of the organization becomes directly linked to employee rewards, altering the relationship between employees and the organization.

Employee share ownership has a potential to stabilize the European economy as a whole. Studies from the US clearly show that companies offering their employees a stake of the business capital create more jobs than companies that do not have the same instruments in place. The demand for employee financial participation is growing in the EU and it has proven its benefits. A clear set of broad and simple EU guidelines would allow for a level playing field for the use of employee financial participation and the spread of its benefits throughout Europe. The EU 2020 strategy on a smart, sustainable, and inclusive growth highlights the need for inclusive growth, which amongst other things empowers citizens through employment, investing

in skills, fighting poverty and modernizing labour markets and social protection. Employee financial participation offers tangible means in this respect by involving workers more in the decision making of the companies they work for, helping to strengthen their skills and employability, ensuring a share of the financial benefits and fighting capital concentration, reactivating the unemployed and creating jobs.

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