Veterans
• Aged 60+
• Called traditionalists in the US
• Joined the workforce when the labour market was flourishing
• 50% of them have spent at least 10 years with their current employer and 33% have even spent more than 20.
Baby boomers
• Aged between 46 and 61
• Joined the workforce in a period of harsh competition for work and their career have been, by and large, linked to long working hours
• 50% have spent the last 10 years with their current employer.
Generation X
• Aged between 31 and 45
• Most of them graduated into the worst condition of job market since the Depression and are used to uncertainty
• 50% have spent at least five years with their current employer
Generation Y
• Aged between 19 and 30
• Grew up in a time of relative peace and prosperity, but for the impact of the terrorist attacks of 9/11 and 7/7
• Joined the workforce in a economic boom
• 50% spent less than three years with their current employer.
The findings of a survey carried out last year by Penna, CIPD and PeopleMetrics, showed that beyond any expectations, Generation Y is not aiming to change job every year and, on the contrary, 50% of them said they planned to work with their current employer for at least five years. Nonetheless, as we have already seen, 50% of them had spent less than three years with their employer at the time of the survey.
Generation Y workers are by and large considered focused in flexibility, professional freedom, higher rewards, better work-life balance and present new challenges.
As one US HR Director explained: “They have seen their parents work all their lives for the same company and then get fired. They are not interested in killing themselves for work”.
Clearly the content of the psychological contract, the unwritten contract stating the mutual obligation between employee and employer, seem requiring to be revisited. That’s why nowadays we usually speak about a “new” psychological contract, opposed to the “old” one.
Definitely tricky workers to cope with, notwithstanding, they too need to be motivated, pushing organisation to improve their retention policies.
What is the impact, if any, of the current recession? Changing job today is as easy as it could be simply 1/2 years ago?
What is your experience with Generation Y?
Which is the behaviour of “Generation Y” in your firm? Are they used to stay for long periods or for short ones?
Is that true that they are not looking for a “job for life” and that they are not interested in “killing themselves for work”?
Have you seen any change since the recession outbreak?
Sunday, 22 November 2009
“Should the UK adopt the Euro as its currency”?
The issue needs to be faced, of course, from different points of view. As for the citizen’s point of view, there are two sides that deserve careful consideration: the “domestic” and the “out of the border” point of views.
As for the domestic point of view, it cannot be denied that, practically in all of the European countries (surely in Italy, France, Spain and Germany), the introduction of the Euro caused, in general, a sensible rise in prices.
That was basically linked to the currency conversion rates fixed at that time. In Germany, let’s assume, the Deutschmark was exchanged at nearly 0,50 Euro, and exactly the same happened in Italy, where the reference unit could be identified in 1000 liras. New consumer prices in Euro were fixed tending to consider as a new unit the Euro and not simply converting the price in Euro, considering the original price in the old currency. So that, the original consumer prices were converted in a new unit that was nearly equal to the double of the previous unit of reference (two Deutschmarks or 2000 Italian liras). In other words, the introduction of the new currency was intended, by most of the trade operators, as a lucrative way to convert 1000 liras in one Euro (and not in nearly 0,50 Euro), one Deutschmark in one Euro (and not in nearly 50 Eurocents) somewhat like a process tending to halve the spending power of all citizens. By and large, the same process occurred in France and Spain.
In the UK, on the contrary, despite the Pound is currently quoted at its lowest value since, at least, a decade (allegedly because of the extremely low interest rate and because of the political forces seem to be comfortable with this trend), the Sterling is quoted at a higher value than the Euro (currently 0,90 circa). If the same process previously occurred in the other European countries should take place in the UK too (1 Deutschmark = 1 Euro; 1000 Italian liras = 1 Euro) the spending power of Brits should even improve, but it’s unlikely it will actually happen. Worse comes to worse, in the domestic market it won’t change anything. You’ll be possibly able to still buy a product you were used to pay 10 Pound, 10 Euros.
As for the “out of the border” side of the matter, the reference is still to citizens, a so weak Pound would really be a problem. Those of you who are used to travel abroad, have already experienced a sharp increase in costs. If last year you would have spent approximately 6,70 GBP to buy something costing 10,00 Euros, you need now to spend about 9 GBP to buy something of the same value. But, as you can see, this is not a Euro adoption related problem, but a Pound exchange rate related problem. As for this side, if anything, adopting the European currency will save you to pay the additional fees due for every transaction regulated in foreign currency (usually 1,50/2% of the amount paid).
Once again, this kind of problem, seems much more related to the “deliberate” weakness of the Pound rather than to the adoption of the European currency itself.
It could be interesting having a look at what happened, at the time, in the Republic of Ireland, in that the Irish Pound was well above the Euro (conversion rate 0,7875).
On the other hand of it, I think it’s absolutely predictable the manufacturers point of view on the subject. A too strong Pound makes their output very difficult to sell abroad. By and large, they pay the “input” required to produce their products or to deliver their services, in Pounds and have to sell it in Euros or, even worse in USDs. The EADS, for instance, which is the Holding company producing the Airbus in Europe (France, Spain, Germany and UK) experiences harsh times when trying to compete with Boeing to sell aircrafts in the US, especially when the USD is particularly weak. A slight change in the currency rate (aircrafts cost million dollars) accounts for sensible difference in price and, also in this case, the organisation faces the “input” cost in Euros and sells it “output” in USD, lately very often rather weak, to the extent to make Gold the preferred commodity in the world, its price, in fact, has already hits two records high in less than 20 days.
Another consequence, about the Euro/GBP decision, which needs to be taken in due consideration and that much more closely relates to our Function, is the one concerning the impact of the decision on the labour cost. Till just 8/10 months ago the UK in general, and London in particular, were easily able to woo many professionals and workers, whatever their field of expertise, thanks to the excellent Pound exchange rate. A foreigner worker couldn’t avoid taking in consideration that a salary of 40,000 quid, was actually worth nearly 60,000 Euros and nearly the double amount in USD. Many European professionals lured by this attractive possibility, didn’t have any reasons to be tentative to jump on the gravy train, the City, in particular, I think, was teeming with people like that. After all, it cannot be denied, London is arguably one of the loveliest city in the world. The effects of this very favourable currency rate clearly had also amazing impact on the, now sharply criticised, bonus story.
The current state of play, for organisations and HR Professionals, is definitely unfavourable, they cannot any longer rely on bonuses and/or pound exchange rate to woo the most talented professionals available in the pool. The pipeline is still pouring talents but the means to attract them are going to be the lesser and lesser attractive. Especially in the financial sector, bonuses are still considered of pivotal importance to the survival of the institutions themselves. All the governments both in the US, EU and Asia are working on the subject, in the event they shouldn’t come out with a unique and shared strategy and decision, the risk is that the war for talent will be easily won by those countries that will still allow to pay super bonuses, at the detriment of those ones which won’t allow their organisations to do so, with the related consequences, that is the threat a new financial crunch around the corner sooner or later.
The right solution, as in many other issues, could be somewhat in the middle. Can HR professional intervene in the debate and find a common policy to be referred to not just as good practise but, in this case, even as best and unique practice?
As for the domestic point of view, it cannot be denied that, practically in all of the European countries (surely in Italy, France, Spain and Germany), the introduction of the Euro caused, in general, a sensible rise in prices.
That was basically linked to the currency conversion rates fixed at that time. In Germany, let’s assume, the Deutschmark was exchanged at nearly 0,50 Euro, and exactly the same happened in Italy, where the reference unit could be identified in 1000 liras. New consumer prices in Euro were fixed tending to consider as a new unit the Euro and not simply converting the price in Euro, considering the original price in the old currency. So that, the original consumer prices were converted in a new unit that was nearly equal to the double of the previous unit of reference (two Deutschmarks or 2000 Italian liras). In other words, the introduction of the new currency was intended, by most of the trade operators, as a lucrative way to convert 1000 liras in one Euro (and not in nearly 0,50 Euro), one Deutschmark in one Euro (and not in nearly 50 Eurocents) somewhat like a process tending to halve the spending power of all citizens. By and large, the same process occurred in France and Spain.
In the UK, on the contrary, despite the Pound is currently quoted at its lowest value since, at least, a decade (allegedly because of the extremely low interest rate and because of the political forces seem to be comfortable with this trend), the Sterling is quoted at a higher value than the Euro (currently 0,90 circa). If the same process previously occurred in the other European countries should take place in the UK too (1 Deutschmark = 1 Euro; 1000 Italian liras = 1 Euro) the spending power of Brits should even improve, but it’s unlikely it will actually happen. Worse comes to worse, in the domestic market it won’t change anything. You’ll be possibly able to still buy a product you were used to pay 10 Pound, 10 Euros.
As for the “out of the border” side of the matter, the reference is still to citizens, a so weak Pound would really be a problem. Those of you who are used to travel abroad, have already experienced a sharp increase in costs. If last year you would have spent approximately 6,70 GBP to buy something costing 10,00 Euros, you need now to spend about 9 GBP to buy something of the same value. But, as you can see, this is not a Euro adoption related problem, but a Pound exchange rate related problem. As for this side, if anything, adopting the European currency will save you to pay the additional fees due for every transaction regulated in foreign currency (usually 1,50/2% of the amount paid).
Once again, this kind of problem, seems much more related to the “deliberate” weakness of the Pound rather than to the adoption of the European currency itself.
It could be interesting having a look at what happened, at the time, in the Republic of Ireland, in that the Irish Pound was well above the Euro (conversion rate 0,7875).
On the other hand of it, I think it’s absolutely predictable the manufacturers point of view on the subject. A too strong Pound makes their output very difficult to sell abroad. By and large, they pay the “input” required to produce their products or to deliver their services, in Pounds and have to sell it in Euros or, even worse in USDs. The EADS, for instance, which is the Holding company producing the Airbus in Europe (France, Spain, Germany and UK) experiences harsh times when trying to compete with Boeing to sell aircrafts in the US, especially when the USD is particularly weak. A slight change in the currency rate (aircrafts cost million dollars) accounts for sensible difference in price and, also in this case, the organisation faces the “input” cost in Euros and sells it “output” in USD, lately very often rather weak, to the extent to make Gold the preferred commodity in the world, its price, in fact, has already hits two records high in less than 20 days.
Another consequence, about the Euro/GBP decision, which needs to be taken in due consideration and that much more closely relates to our Function, is the one concerning the impact of the decision on the labour cost. Till just 8/10 months ago the UK in general, and London in particular, were easily able to woo many professionals and workers, whatever their field of expertise, thanks to the excellent Pound exchange rate. A foreigner worker couldn’t avoid taking in consideration that a salary of 40,000 quid, was actually worth nearly 60,000 Euros and nearly the double amount in USD. Many European professionals lured by this attractive possibility, didn’t have any reasons to be tentative to jump on the gravy train, the City, in particular, I think, was teeming with people like that. After all, it cannot be denied, London is arguably one of the loveliest city in the world. The effects of this very favourable currency rate clearly had also amazing impact on the, now sharply criticised, bonus story.
The current state of play, for organisations and HR Professionals, is definitely unfavourable, they cannot any longer rely on bonuses and/or pound exchange rate to woo the most talented professionals available in the pool. The pipeline is still pouring talents but the means to attract them are going to be the lesser and lesser attractive. Especially in the financial sector, bonuses are still considered of pivotal importance to the survival of the institutions themselves. All the governments both in the US, EU and Asia are working on the subject, in the event they shouldn’t come out with a unique and shared strategy and decision, the risk is that the war for talent will be easily won by those countries that will still allow to pay super bonuses, at the detriment of those ones which won’t allow their organisations to do so, with the related consequences, that is the threat a new financial crunch around the corner sooner or later.
The right solution, as in many other issues, could be somewhat in the middle. Can HR professional intervene in the debate and find a common policy to be referred to not just as good practise but, in this case, even as best and unique practice?
Sunday, 15 November 2009
The European debate on pros and cons of bank nationalisation
The French point of view.
In France, by and large, everybody seems to be favourable to the bailout of the banking system.
But there are different points of views on how to achieve this purpose.
The Government has lent to the banks very large sums of money, but it has acquired the capital of just one bank, Dexia.
What has caused the opposition party, namely Mrs Royale, to criticise the move in that in her opinion, it’s necessary privatising, even partially, banks in order them to return to their original activity, i.e. “financially help employers”.
Just lending money to banks will keep allowing them to do whatever they want, the government won’t be interfering on their activity and banks will, then, able to continue in their dangerous and risky investment activity.
Those banks which have received money from the Government are doing everything they can to avoid the Government interference on their management and running activity.
Professor Xavier Freixas, of the Toulouse School of Economics, suggests to nationalise banks acquiring the majority of their assets, then redeem their toxic ones, through a specific organisation, in order to avoid that the stakeholders could get any advantage by this process. This is actually a point of view supported by a large number of experts.
The German approach
In Germany in all those cases in which the Government has contributed to a bank capitalisation, Managers’ bonuses and stock-options, of the bank involved, have been abolished and their salaries capped at 500.000,00 €, which, according to the German Finances Minister, Peer Steinbrück, is a reasonable amount of money.
In order to sort things out, German President Horst Koehler has signed a bill into law that gives the government:
• the power to take control of institutions whose insolvency could endanger the stability of the whole financial sector,
• the power to expropriate banks shareholders, even though “as a last resort”, i.e. after all of the other possible options have been deemed unviable.
Conservative Party sharply criticised the law, saying that a forced takeover could be tantamount to communism.
The law has also been opposed by Hypo Real Estate, first target of the law, shareholder J. Christopher Flowers, who coordinates an investor group that holds nearly 24% of HRE.
On the one hand the government had declared that in order to recapitalise the company a fundamental prerequisite was that the government could “gain full control” of the lender.
On the other hand of it, it must be pointed out that HRE had registered a loss, in 2008, of over 5.4 billion Euros and wouldn’t objectively have any hope to survive without the government intervention.
Hypo RE shareholders will, anyway, receive an appropriate compensation.
The Spanish debate
In Spain there is a strong movement against the bank nationalisation, the movement claims that the cost of the credit crunch has to be paid by capitalists and that the Government shouldn’t give a single penny (cent in Spain) to those whom enriched at the expenses of the general populace. According to this movement, public spending should just be used to save and create new jobs. In order to oppose the current situation, i.e. the closing down and delocalisation of many organisations, the Government should intervene nationalising the affected organisations under its own control.
The massive use of public spending to save the “biggest burglars” of the planet, i.e. the financiers, represents a further affront and insult to the workers and to the general public.
Those who are favourable to banks nationalisation, claims that the Government, after having acquired banks’ capital, should control their activity, operate and take decisions that are sounding and useful for the wider community. One example could be represented by the nationalisation, carried out in Chile by Allende, of a copper company, which still is the biggest copper producer in the world and gives work to a large number of people there.
As claimed by the Spanish Economics Secretary of State, David Vegara, if the government hasn’t yet made any capitalisation move is because it hasn’t been necessary so far. Of the same viewpoint is Mr Jaime Echegoyen, Bankinter CEO, who claimed that there is no need for any government intervention, in that Spanish banks are sufficiently capitalised.
Notwithstanding, on October 2008 the Spanish Prime Minister, Mr José Luis Rodrigo Zapatero, convened an extraordinary meeting of his ministers to urgently approve a “Royal Law Decree”. This law allows the government to acquire banks capital: “Exceptionally and till December, 31st 2009, the Treasury and Finance Ministry is allowed to acquire stocks issued by banks residents in Spain, whenever these institutions need to consolidate their assets and request this kind of intervention”.
As explained by Mr. Vegara, the law approved by the government include the possibility that the government can fully intervene on the capitalisation of a financial institution, only if it should be judged necessary.
The law was signed even though the Vice PM, Mr Pedro Solbes and Mr Vergara himself had judged “unnecessary” the law just the day before the urgent minister’s meeting was held.
The Italian solid banking system
According to the Italian Premier there is no possibility at all to nationalise any banks in Italy, and he currently excludes any intention of the government to do so. The Italian banking system is considered solid and strong, in that Italians are traditionally a population incline to save and deposit money into bank accounts.
Notwithstanding, the government has made available to the banking system huge sums of money, in the form of bonds taking the name of the Italian Finances Minister, i.e. Tremonti’s Bonds.
Some banks have showed interest on this formula but just as a further means to support the banking system, not because they are truly running any serious danger.
All the boards of the main Italian banks have categorically excluded the possibility of their nationalisation, simply because there are no reasons for doing so.
This opinion is shared by the President of the Italian Banking Association (ABI), Corrado Faissola, and by the president of the Stock Exchange Control Authority (CONSOB), Lamberto Cardia.
To cut a long story short, nobody, in Italy, seems to be interested on the nationalisation of the Italian banking system.
The Swedish style
The Swedish credit and real estate sectors experienced a real boom in the late 1980s. In the early 1990s, as a backlash of the previous decade, Sweden fell into a severe financial crunch. The Swedish government push then banks to clearly state their losses and then either raise their capital or accept to be restructured by the government.
Banks unable to meet the requirements set by the government, namely Forsta Sparbanken, Nordbanken and Gota Bank, were nationalised and their assets separated into good and bad banks. The good banks merged and were sold to privates. The bad banks were managed by asset management who, in approximately four years, divested the assets of these banks in an orderly manner.
The process was completed earlier than scheduled, in nearly four years, and, more importantly, at a lower cost than expected. This method is, to some degree, still recognised as a model.
Can the PESTLE analysis help?
Comparing the Swedish case against the American one can help to answer the question. Let’s compare, in fact, the Sweden state of play, when the crisis occurred, and the current America’s one:
Sweden USA
Number of banks 500 ca 7500 ca
Assets concentration 90% in 6 banks 55% in 15 banks
Level of economic complexity Very low Very high
In Sweden the government activity was made easier by the size of the economy and by the fact that the government played a relevant role in the country’s economy.
Both the economic and politic aspects, then, are very relevant on the decision making process.
In Sweden the political and economic pictured made it possible the nationalisation of the banking system in a relatively easy way.
This should be much more difficult to achieve in a complex and big economy like the American one.
Staying on the Swedish case, interestingly enough, we can see that the PESTLE analysis could also help to anticipate the cause of the problem.
During the financial crisis of the late 1980s, early 1990s, in fact many other actors came to play:
Political the government imposed restriction on borrowing money in the mid 1980s;
Economic • several currencies devaluation which boosted exports,
• a not properly managed effort by the government to borrow only in Swedish Kronas in local market that, in the end, caused more risks on banks than on the government.
• the development of a shadow banking system where unregulated companies financed their operations via commercial paper.
Another interesting example, of the PESTLE analisys application, can be represented by the Italian case, where since the banking system, paraphrasing the words of Mr. Berlusconi, “is solid”, made it even useless to develop a serious debate. In this case is clearly the economic arm of the PESTLE which comes to play. But it’s not all, there is possibly another PESTLE aspect which requires adequate attention and consideration, i.e. the Social one. In fact, the presence of a solid banking system is arguably due to the fact that Italians are openly recognised as people who are used to save a large part of their income.
As we have seen, in Germany, the government resorted to law in order to impose, even though as a last resort, the nationalisation of the bank which didn’t met the imposed requirements, in this case is the legal/political aspect which plays an important and resolute role. To some extent, we could also argue that the economical situation influenced the legal aspect of the PESTLE.
This is also the case of Spain where the problem is not yet concrete, but a Real Decree is already into force to eventually allow the governemnt to nationalise banks.
In France the government action is rather influenced by the opposition and part of the public opinion orientation on the subject, nationalise just taking real control of the banks involved. The political/legal side of the PESTLE is clearly influenced by the Social one.
In all the cases investigated the Social factor has emerged as a relevant and influential feature, the debate on nationalisation and, in some cases, the actions following a financial crunch, where many people lost their jobs, putting in further danger their savings or their (or their organisations’) ability to access credit would obviously be considered much more dangerous and harmful.
In France, by and large, everybody seems to be favourable to the bailout of the banking system.
But there are different points of views on how to achieve this purpose.
The Government has lent to the banks very large sums of money, but it has acquired the capital of just one bank, Dexia.
What has caused the opposition party, namely Mrs Royale, to criticise the move in that in her opinion, it’s necessary privatising, even partially, banks in order them to return to their original activity, i.e. “financially help employers”.
Just lending money to banks will keep allowing them to do whatever they want, the government won’t be interfering on their activity and banks will, then, able to continue in their dangerous and risky investment activity.
Those banks which have received money from the Government are doing everything they can to avoid the Government interference on their management and running activity.
Professor Xavier Freixas, of the Toulouse School of Economics, suggests to nationalise banks acquiring the majority of their assets, then redeem their toxic ones, through a specific organisation, in order to avoid that the stakeholders could get any advantage by this process. This is actually a point of view supported by a large number of experts.
The German approach
In Germany in all those cases in which the Government has contributed to a bank capitalisation, Managers’ bonuses and stock-options, of the bank involved, have been abolished and their salaries capped at 500.000,00 €, which, according to the German Finances Minister, Peer Steinbrück, is a reasonable amount of money.
In order to sort things out, German President Horst Koehler has signed a bill into law that gives the government:
• the power to take control of institutions whose insolvency could endanger the stability of the whole financial sector,
• the power to expropriate banks shareholders, even though “as a last resort”, i.e. after all of the other possible options have been deemed unviable.
Conservative Party sharply criticised the law, saying that a forced takeover could be tantamount to communism.
The law has also been opposed by Hypo Real Estate, first target of the law, shareholder J. Christopher Flowers, who coordinates an investor group that holds nearly 24% of HRE.
On the one hand the government had declared that in order to recapitalise the company a fundamental prerequisite was that the government could “gain full control” of the lender.
On the other hand of it, it must be pointed out that HRE had registered a loss, in 2008, of over 5.4 billion Euros and wouldn’t objectively have any hope to survive without the government intervention.
Hypo RE shareholders will, anyway, receive an appropriate compensation.
The Spanish debate
In Spain there is a strong movement against the bank nationalisation, the movement claims that the cost of the credit crunch has to be paid by capitalists and that the Government shouldn’t give a single penny (cent in Spain) to those whom enriched at the expenses of the general populace. According to this movement, public spending should just be used to save and create new jobs. In order to oppose the current situation, i.e. the closing down and delocalisation of many organisations, the Government should intervene nationalising the affected organisations under its own control.
The massive use of public spending to save the “biggest burglars” of the planet, i.e. the financiers, represents a further affront and insult to the workers and to the general public.
Those who are favourable to banks nationalisation, claims that the Government, after having acquired banks’ capital, should control their activity, operate and take decisions that are sounding and useful for the wider community. One example could be represented by the nationalisation, carried out in Chile by Allende, of a copper company, which still is the biggest copper producer in the world and gives work to a large number of people there.
As claimed by the Spanish Economics Secretary of State, David Vegara, if the government hasn’t yet made any capitalisation move is because it hasn’t been necessary so far. Of the same viewpoint is Mr Jaime Echegoyen, Bankinter CEO, who claimed that there is no need for any government intervention, in that Spanish banks are sufficiently capitalised.
Notwithstanding, on October 2008 the Spanish Prime Minister, Mr José Luis Rodrigo Zapatero, convened an extraordinary meeting of his ministers to urgently approve a “Royal Law Decree”. This law allows the government to acquire banks capital: “Exceptionally and till December, 31st 2009, the Treasury and Finance Ministry is allowed to acquire stocks issued by banks residents in Spain, whenever these institutions need to consolidate their assets and request this kind of intervention”.
As explained by Mr. Vegara, the law approved by the government include the possibility that the government can fully intervene on the capitalisation of a financial institution, only if it should be judged necessary.
The law was signed even though the Vice PM, Mr Pedro Solbes and Mr Vergara himself had judged “unnecessary” the law just the day before the urgent minister’s meeting was held.
The Italian solid banking system
According to the Italian Premier there is no possibility at all to nationalise any banks in Italy, and he currently excludes any intention of the government to do so. The Italian banking system is considered solid and strong, in that Italians are traditionally a population incline to save and deposit money into bank accounts.
Notwithstanding, the government has made available to the banking system huge sums of money, in the form of bonds taking the name of the Italian Finances Minister, i.e. Tremonti’s Bonds.
Some banks have showed interest on this formula but just as a further means to support the banking system, not because they are truly running any serious danger.
All the boards of the main Italian banks have categorically excluded the possibility of their nationalisation, simply because there are no reasons for doing so.
This opinion is shared by the President of the Italian Banking Association (ABI), Corrado Faissola, and by the president of the Stock Exchange Control Authority (CONSOB), Lamberto Cardia.
To cut a long story short, nobody, in Italy, seems to be interested on the nationalisation of the Italian banking system.
The Swedish style
The Swedish credit and real estate sectors experienced a real boom in the late 1980s. In the early 1990s, as a backlash of the previous decade, Sweden fell into a severe financial crunch. The Swedish government push then banks to clearly state their losses and then either raise their capital or accept to be restructured by the government.
Banks unable to meet the requirements set by the government, namely Forsta Sparbanken, Nordbanken and Gota Bank, were nationalised and their assets separated into good and bad banks. The good banks merged and were sold to privates. The bad banks were managed by asset management who, in approximately four years, divested the assets of these banks in an orderly manner.
The process was completed earlier than scheduled, in nearly four years, and, more importantly, at a lower cost than expected. This method is, to some degree, still recognised as a model.
Can the PESTLE analysis help?
Comparing the Swedish case against the American one can help to answer the question. Let’s compare, in fact, the Sweden state of play, when the crisis occurred, and the current America’s one:
Sweden USA
Number of banks 500 ca 7500 ca
Assets concentration 90% in 6 banks 55% in 15 banks
Level of economic complexity Very low Very high
In Sweden the government activity was made easier by the size of the economy and by the fact that the government played a relevant role in the country’s economy.
Both the economic and politic aspects, then, are very relevant on the decision making process.
In Sweden the political and economic pictured made it possible the nationalisation of the banking system in a relatively easy way.
This should be much more difficult to achieve in a complex and big economy like the American one.
Staying on the Swedish case, interestingly enough, we can see that the PESTLE analysis could also help to anticipate the cause of the problem.
During the financial crisis of the late 1980s, early 1990s, in fact many other actors came to play:
Political the government imposed restriction on borrowing money in the mid 1980s;
Economic • several currencies devaluation which boosted exports,
• a not properly managed effort by the government to borrow only in Swedish Kronas in local market that, in the end, caused more risks on banks than on the government.
• the development of a shadow banking system where unregulated companies financed their operations via commercial paper.
Another interesting example, of the PESTLE analisys application, can be represented by the Italian case, where since the banking system, paraphrasing the words of Mr. Berlusconi, “is solid”, made it even useless to develop a serious debate. In this case is clearly the economic arm of the PESTLE which comes to play. But it’s not all, there is possibly another PESTLE aspect which requires adequate attention and consideration, i.e. the Social one. In fact, the presence of a solid banking system is arguably due to the fact that Italians are openly recognised as people who are used to save a large part of their income.
As we have seen, in Germany, the government resorted to law in order to impose, even though as a last resort, the nationalisation of the bank which didn’t met the imposed requirements, in this case is the legal/political aspect which plays an important and resolute role. To some extent, we could also argue that the economical situation influenced the legal aspect of the PESTLE.
This is also the case of Spain where the problem is not yet concrete, but a Real Decree is already into force to eventually allow the governemnt to nationalise banks.
In France the government action is rather influenced by the opposition and part of the public opinion orientation on the subject, nationalise just taking real control of the banks involved. The political/legal side of the PESTLE is clearly influenced by the Social one.
In all the cases investigated the Social factor has emerged as a relevant and influential feature, the debate on nationalisation and, in some cases, the actions following a financial crunch, where many people lost their jobs, putting in further danger their savings or their (or their organisations’) ability to access credit would obviously be considered much more dangerous and harmful.
Tuesday, 3 November 2009
LONGING FOR A LONGER BREAK OR REALLY ILL?
According to the findings of a research carried out by Mercer, in the UK, employees are more likely to be sick on Monday.
The research, conducted over a sample of 11,000 private sectors employees, revealed that 35% of all sick absence at work is concentrated on a Monday. Attendance is then likely to increase as the week goes on.
Curiously enough, perhaps, on Fridays the percentage of sickness related absence accounts jut for 3%.
Reading among the lines of these findings, it clearly appears that the real reason for this so high level of absence on Mondays should not be related to long weekend plans, in this case, in fact, also the Fridays ratio should have been rather high, on the contrary, as we have seen, it is even the lowest. Somewhat like: it’s really hard to come back work after a weekend at home (or elsewhere), but once I’ve found the courage and the bravery to come back, then I can also resist till Friday, and I’m more likely to do so, if I’ll be able to go work on Tuesday and Wednesday.
The real reasons for this trend are, then, very likely linked to the lack of motivation and engagement. Line managers have a fundamental impact on this, in fact, if it’s true, as it is true, that people leave their managers, not their organisations, it is also very likely that employees are unwilling to come back to work, on any given Monday, because of their Managers too and that should provide food for our thoughts.
Back to the findings of the research, January revealed to be the month of the year with the highest level of absence, with January 3 and 4 the best (or rather the worst) day of the year, in these days, in fact, nearly 5% of the whole private employee population was sick in 2008.
Health and safety measures, nonetheless, need to be not neglected. Nearly a quarter of ill related absence (24%) were, in fact, linked to musculo-skeletal causes, so that maybe appropriate actions could be taken by employers to reduce this percentage.
Other common and, to some extent, classic causes were cold, flu and viral infections in general, which accounted for 17% of the total absence number.
These findings are, by and large, related to short periods of absence. Longer period of absence are, instead, mostly linked to stress conditions, with an incidence rate of, if anything, a lower rate (4%).
Female workers have taken 24% more days than their male colleagues. Absence for stress related reasons, e.g. depression, were higher among women (more than twice) than in male workers.
On the other hand of it, males are the “champions” in muscle sprains, fractures and other physical problems, yes many of us don’t consider ageing consequences when playing football on weekends.
All of these findings are actually very interesting and, taking advantage of the developments in processing and data management, each organisation could try to monitor data and, hopefully, inform employees about health and safety risks, especially men, who believes they are invulnerable and don’t need care.
The research, conducted over a sample of 11,000 private sectors employees, revealed that 35% of all sick absence at work is concentrated on a Monday. Attendance is then likely to increase as the week goes on.
Curiously enough, perhaps, on Fridays the percentage of sickness related absence accounts jut for 3%.
Reading among the lines of these findings, it clearly appears that the real reason for this so high level of absence on Mondays should not be related to long weekend plans, in this case, in fact, also the Fridays ratio should have been rather high, on the contrary, as we have seen, it is even the lowest. Somewhat like: it’s really hard to come back work after a weekend at home (or elsewhere), but once I’ve found the courage and the bravery to come back, then I can also resist till Friday, and I’m more likely to do so, if I’ll be able to go work on Tuesday and Wednesday.
The real reasons for this trend are, then, very likely linked to the lack of motivation and engagement. Line managers have a fundamental impact on this, in fact, if it’s true, as it is true, that people leave their managers, not their organisations, it is also very likely that employees are unwilling to come back to work, on any given Monday, because of their Managers too and that should provide food for our thoughts.
Back to the findings of the research, January revealed to be the month of the year with the highest level of absence, with January 3 and 4 the best (or rather the worst) day of the year, in these days, in fact, nearly 5% of the whole private employee population was sick in 2008.
Health and safety measures, nonetheless, need to be not neglected. Nearly a quarter of ill related absence (24%) were, in fact, linked to musculo-skeletal causes, so that maybe appropriate actions could be taken by employers to reduce this percentage.
Other common and, to some extent, classic causes were cold, flu and viral infections in general, which accounted for 17% of the total absence number.
These findings are, by and large, related to short periods of absence. Longer period of absence are, instead, mostly linked to stress conditions, with an incidence rate of, if anything, a lower rate (4%).
Female workers have taken 24% more days than their male colleagues. Absence for stress related reasons, e.g. depression, were higher among women (more than twice) than in male workers.
On the other hand of it, males are the “champions” in muscle sprains, fractures and other physical problems, yes many of us don’t consider ageing consequences when playing football on weekends.
All of these findings are actually very interesting and, taking advantage of the developments in processing and data management, each organisation could try to monitor data and, hopefully, inform employees about health and safety risks, especially men, who believes they are invulnerable and don’t need care.
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