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EMU membership will mean that employment will decline in Greek banking and that the sector's industrial relations will need to be altered in the direction of a consultative model. These are the conclusions of a study completed in April 1999 by the Institute of Labour of the Greek Federation of Bank Employee Unions (OTOE).
In the framework of research being carried out by the Institute of Labour of the Greek Federation of Bank Employee Unions (OTOE), in April 1999 an extensive study was completed on the effects of future Greek membership of EU Economic and Monetary Union (EMU) on employment and industrial relations in the banking sector (Greece did not enter EMU in the first wave, but is planning to join in 2001). The conclusion reached by the study, which is in the process of being published, is that employment will decline and that industrial relations need to be altered so as to develop a consultative model.
The study sought to examine the opinions of staff in the banking sector on the prospects for employment in view of EMU and the speed-up of the structural changes which it is expected to bring about. This investigation was conducted by means of questionnaires addressed to 33 bank employees. The changes staff expect to see are lower employment in traditional jobs (allocations, deposits, administration etc) and higher employment in "emerging" activities such as computerisation, organisation, private banking and the capital market. The overall trend is towards a decrease in employment.
As regards the prospects for expansion of the sector due to membership in EMU, the attitude of the respondents could be described as one of restrained optimism. Given that such optimism, albeit restrained, was expressed both with regard to expansion of the sector and to acceleration of economic growth in Greece as part of EMU, the anticipated decrease in employment should be of the order of 1%-2%. According to the responses to the questionnaire, surplus staff was seen to be of the order of 5%. However, because certain banks are over-represented in the sample, in which banks not considered to have surplus staff were not represented at all, the final figure may well be of the order of 2%. Thus, the final estimated change in employment, whether according to analysis of statistical data on employment in banks in Greece or according to the responses of banking sector staff recorded in the questionnaire, is a reduction of the order of 2% in the medium term (five years), with a greater reduction expected in the long term.
The structural changes taking place in the banking sector, which are expected to accelerate when Greece joins EMU, are also accompanied by, or rather are also causing, a series of changes in labour relations in the sector.
The main industrial relations or work organisation issues found to be coming to the fore as a result of structural changes in the sector are: longer banking hours (on a daily or weekly basis); better vocational training procedures; the question of retention or abolition of strictly administrative hierarchical structures; the ability of staff to make effective use of new technologies; outsourcing; use of computer and telecommunications applications on a wider scale; the motivation of workers to take initiatives; assigning responsibilities to lower grades in the employment hierarchy; simplification of work organisation; performance-based pay; suitability and clarity of company objectives; labour market flexibility; dissemination of information among staff; part-time employment; fixed-term contracts; the development of new systems for evaluating employees' work; working time flexibility; relationship of pay to business performance; dissociation of career advancement from length of time employed; the existence of moral incentives to increase productivity and the quality of services provided; temporary employment; separation of activity from the main workplace (bank premises); the attraction of "ready-to-work" staff from the labour market; the decline of "internal labour markets"; and the reduction of working time with or without a reduction in pay (currently the key issue in collective bargaining in the sector - GR9904124N).
For developments in the area of labour relations, the study again used a questionnaire addressed to 33 staff members in the banking sector.
With regard to the present situation, the responses suggest that that banks still have an important gap to fill in terms of the general and special knowledge and skills of the people they employ. Even less positive was the response to the question of whether the staff has all the knowledge and skills needed, especially for making the best use of the new technologies. Employees indicated in their responses that there is a strong need for changes in work organisation in order to increase the productivity of labour and the quality of services provided. The lack of flexibility is accompanied, in the respondents' view, by a serious lack of employee adaptability to changes in work organisation, although the problem lies primarily in work organisation and less in staff adaptability. To the questions of whether the prevailing mentality, "social climate" and industrial relations motivate staff to increase productivity and improve the quality of the services provided, the responses were not particularly positive.
The views of staff regarding the most important coming changes may be summed up as follows:
The banking sector in Greece has exhibited rapid growth since the mid-1980s. This growth was sustained by the expansion of the sector - ie an increased number of bank branches, geographical expansion and an increased number of employees. This extensive accumulation of capital appears to be coming to an end, and from now on development of the sector will take place through productivity increases, organisational changes and structural changes. The inclusion of the Greek economy in EMU will act as a catalyst for these changes and is expected to have effects on labour relations and employment. The OTOE study examines these effects and notes that while employment will decrease, industrial relations should change from the current "administrative" model to a "participatory" model based on trust and consultation between employees and management, determination of objectives through discussion and two-way communication.
The study also notes that these developments in the banking sector are dependent to an important degree on the ability of the Greek economy to grow rapidly in the new competitive environment that EMU will create.
These conclusions of the OTOE study indirectly suggest certain guidelines for trade union intervention in the next few years: first, intensification of efforts to reduce working time in order to save jobs that are in jeopardy; and second, the formulation of proposals for changes to industrial relations aimed at establishing a "consultative" model which will dispense as soon as possible with the outdated features of the administrative model. (Elias Ioakimoglou, external consultant, INE/GSEE and INE/OTOE)