International Human Resources

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Minimum wages- The year 2014 saw the introduction of a statutory minimum wage of €8.50 per hour. This wage is a base that covers all industries and sectors. We couldn't get an exact figure for wages at Ikea in Germany but we do know that salaries vary between departments such as cashier, sales, warehouse and logistic roles.

Part-time work- Part-time work is a very widespread form of female employment in Germany. In response to the West German male breadwinner/single earner model the labour market reforms of the early 2000s promoted part-time work as a way of raising employment among women. The Institute for Employment Research IAB finds that in 2014, 57.8% of all working women and 20.1% of all male workers worked part time

Training - Under the laws of the regional states (Bundeslaender), workers have the right to take five days of education leave per year (Bildungsurlaub). This form of paid leave can be taken for adult education (languages, health, political, societal topics) or for occupation-related training

Ikea describes their HR strategy as being one in which “The company's human resource philosophy subscribed to the belief that employees were more productive and committed when the company took care of them and their needs.” However due to employees requiring individual needs the holistic approach to HR wasn’t successful.

Part B

Standardization of human resources management practice, is aiming at reaching the consistency between the local workforce and the corporates norms, as well as aligning the local workforce with corporates’ common principle and objective (Evans, Pucik & Bjorkman, 2005). In seeking to have a standard approach in different functions of human resources management adopted in Germany, the (1) German laws and societal values, (2) industrial relations and (3) the vocational education and training system in Germany, are needed to be taken into consideration while these challenges, or compatible elements, pose an explicit impact on and associated with IKEA’s adoption of standardized method.

Laws and Societal Values in Germany

As addressed in Part A, “Employee Protection Laws” are often be referred in protecting and preserving employees’ right. IKEA has to face the challenge in designing and implementing the reward and compensation system of the human resources practice in Germany, by making sure those policies are meet with the requirement of different labor laws like the minimum wages, retirement age and different employee benefits. IKEA has to strike a great balance in fulfilling the policies and meanwhile taking the cost reduction in standardization into account when it is seeking to have a standard approach in the reward and reimbursement functions of human resources management in Germany.

In addition, IKEA not only needs to meet the local minimum law requirements, but also need to pay more efforts in maintaining attractiveness on staff benefits and rewards so as to ensure IKEA in the labor market is staying at a competitive place and therefore, a sufficient and efficient amount of skilled workers and talents can be attracted in recruiting. Especially when Germany is now facing a vital fact that the local labor force is projected to decrease sharply in the next few decades (The Economist, 2016), the competition between corporates and companies in attaining their targeted employees with the right skills as well as at the right time will increase and more intense. Thus, a company possessing an attractive employment package, which is appealing to their potential employees, is definitely an advantage and also challenges the human resources managers in designing it by taking different stakeholders’ benefits into account.

Industrial Relations in Germany

Concerning and more efforts put in industrial relations in HRM practice is particularly important in Germany as it is characterized by “workplace codetermination” among different work councils and corporates (Heiner Dribbusch and Peter Birke, 2012). German Confederation of Trade Unions is regarded as the most important labor organization that comprised over 6 million people and representing workers across entire sectors (Deutscher Gewerkschaftsbund, 2016). More cooperating work and connection between IKEA’s HRM practice and German Confederation of Trade Unions are needed and critical when designing, developing and implementing different strategies throughout different human resources functions in Germany, so as to create and maintain a harmony relationship with labor or employees, meanwhile getting their support and gaining their trust. On top of it, the attention to individual trade unions is also essential as well because they are playing an main role in policy decision making, the negotiation and bargaining with organizations and companies at the same time.

Moreover, highlighted after and in wake of the financial crisis, various collectively agreed and company-level instruments are set up in contributing to employee’s job security, policies on flexible working time, and further financial concessions on the part of employees (Heiner Dribbusch and Peter Birke, 2012). Facing such emerging situational factors arising from unions also challenges IKEA in seeking to have a standard approach to HRM adopted in Germany, which is affecting HRM in structuring the entire flow of human resources planning in achieving the long term goals, like enhancing both the individual and societal well-being and the organization effectiveness, of our corporate.

Vocational Training in Germany – The Dual Vocational Training System

Vocational education and training is widely respected and embedded in German society, which offers qualifications in diverse professions for the apprentices and pushing them to adapt to the changing demands of the labor market. In the “dual” vocational training system, apprentices are trained in two places: the company and the vocational school. One of the main characteristics of this system is that it involves high degree of corporates’ engagement and investment throughout this training system. In 2013, the cost in vocational training borne by corporates is estimated to be 23 billion Euros and 500 thousand companies are involved (Hamburg, 2013).

Yet, even it requests corporate’s time and monetary investment in this training system, the business community in Germany generally views the training expense as a sort of investment, as benefits are accrued to employers in returns from productive performance of trainees (Kathrin Hoeckel, 2008). Upon such a supportive training system in Germany, it