Committee on Technical Cooperation
FOURTH ITEM ON THE AGENDA
Report of the International Symposium on the
Future of Employers' Organizations
(Geneva, 19-21 April 1999)
1. The International Symposium on the Future of Employers' Organizations was held in Geneva from 19 to 21 April 1999. Twenty-four participants attended. Observers were present from the International Organization of Employers.
2. The purpose of the Symposium was to identify:
3. Participants examined the findings of a survey of employers' organizations from around the world, which indicated current and future trends in membership and financial resources; issues and priorities; opportunities and constraints; and key themes and issues for discussion at the Symposium. The results of the discussion that followed included advice to the Office on its programme of assistance to employers' organizations and a set of conclusions, which is appended. The full report of the Symposium is not reproduced here, but is available on request.
4. The participants recognized that the future of employers' organizations lay in the added value they brought to enterprises. With the constant and rapid change of the operating environment, enterprises had new needs and expectations, and employers' organizations had to change in order to respond to them. The basic objective of an employers' organization remained that of enabling enterprises to be competitive by improving the policy environment and providing direct services to improve the performance of individual enterprises. In this context, establishing members' needs and evaluating their own performance were important. Employers' organizations had to widen the scope of their activities and the partners with whom they deal. Labour market issues were not independent of economic and other social issues. Employers' organizations had to focus on core competences, build new ones where necessary and develop alliances with other organizations in areas where they did not have sufficient competence. The core role of employers' organizations, as the voice of business, remained as vital as ever. Employer solidarity was a basic strength which business needed, and it existed only in business organizations.
5. The Committee may wish to recommend that the Governing Body take note of the Conclusions of the Symposium and request the Director General to take them into account in implementing future work of the Office in related areas.
Geneva, 7 September 1999.
Point for decision: Paragraph 5.
International Symposium on the
Future of Employers' Organizations
(Geneva, 19-21 April 1999 )
1. Constant and rapid change of the operating environment of enterprises requires employers' organizations to review their own roles and activities. The change agents are the globalization of markets and competition, regionalization, the greater role of the market in shaping economic policy, rapid advances in information and communications technology and new interest groups which influence policy. This situation presents employers' organizations with many challenges, as well as with opportunities to increase their relevance and usefulness to enterprises.
2. Globalization has resulted in pressure on business to demonstrate greater social responsibility. Employers' organizations have a unique advantage in being of service to enterprises in this area, which will increase in importance in the years to come.
3. Globalization and regionalization make it incumbent on employers' organizations to be more active at the regional and international levels. This implies greater participation in activities at those levels and more cooperation with similar organizations in other countries.
4. In this new environment enterprises have new needs and expectations, and employers' organizations will have to change in order to respond to them. The basic objective of an employers' organization is still to enable enterprises to be competitive by improving the policy environment and by providing direct services which improve the performance of individual enterprises. However, the ways of achieving this objective and the factors to be taken account of have changed considerably. The justification for the continued operation of employers' organizations will lie in the added value they bring to their members. This requires them to seek greater efficiency and relevance. As organizations develop and refine their portfolio of services, establishing members' needs and evaluating performance become more important. They need to stay one step ahead of their members, anticipating needs, monitoring developments and advising on trends.
5. They need to widen the scope of their activities and the partners with whom they deal. Labour market issues cannot be dealt with independently of economic and other social issues. The lines separating the areas of specialization of different business organizations are becoming increasingly blurred. Employers' organizations need to focus on core competencies, build new ones where necessary and develop alliances with other organizations in areas where they do not have sufficient competence.
Relationships, alliances and networks
6. In the area of policy employers' organizations have to deal with a new set of actors -- non-governmental and community organizations -- in addition to their traditional partners. These new actors do not necessarily participate in existing structures or forums for policy debate, but can have considerable impact on the policy environment for business. Employers' organizations have therefore to engage in dialogue with them, and to shape future debate. This activity is also related to the development of democracy, which is essential for the market economy, and to improving the public perception of private enterprise.
7. New relationships are also necessary with traditional partners. With employee relations becoming decentralized and moving closer to the workplace, employers have to develop different services through advice and training to enable enterprises to manage their workplace relations. The role of government in the economy is changing, as it divests ownership of business assets. In this context, employers' organizations need to promote good corporate and national governance.
8. Employers' organizations are in the business of supplying services to enterprises. In their representation and advocacy role, the main competition comes from other business associations. This is related to the fact that there is a blurring of the distinction between purely economic and labour market issues, and the traditional demarcation of areas of competence of different organizations is becoming difficult to sustain. This has resulted in mergers and alliances between organizations and other forms of cooperation to eliminate duplication, and that process will continue.
9. The core role of employers' organizations, as the voice of business, remains as vital today as it has ever been. They should develop a strong reputation and high public profile, which would in turn enhance the standing of employers who associate with them through membership. The sense of belonging to such organizations is a strong incentive for many employers to value membership in them. Employer solidarity is a basic strength which business needs, and it exists only in business organizations. However, paradoxically, their success in influencing policy leads to a corresponding reduction in the value of their lobbying function. It is therefore necessary to develop more direct services to enterprises, and to compete on the open market with other providers of such services, such as consultants, or to establish cooperative relationships with them. Employers' organizations are not immune from the rules of the market. They must either produce the service at a cost and quality acceptable to their members or else find that others will provide it. It is not in the interests of their membership for them to compete with other providers in areas where they do not have a comparative advantage. Instead, they should enter into strategic alliances with those suppliers who better meet the needs of their members.
Membership and income
10. On the one hand businesses are becoming larger -- mergers and alliances are creating large international companies. At the same time small and micro-enterprises are thriving. Neither is the traditional heartland of employers' organization membership. The organizations have to cater to the needs of both the headquarters and subsidiaries of large companies, which often have complex structures and relationships, including notably joint ventures, alliances and international supply chains.
11. Employers' organizations need to attract into membership businesses that are not traditional members in many countries, especially the self-employed and informal sector producers. There also needs to be a focus on new investors, young entrepreneurs and women in business.
12. While employers' organizations have for the most part noted increases in membership over the past several years, they need to actively work to retain those members by remaining responsive to their needs. Doing so requires investigating the needs of existing and potential members. Each category of member might require a different package of services. It is important to manage and nurture the relationship with every member, in order to retain membership. If members do leave, the reasons for their doing so should be analysed.
13. While there is a need to generate income from specialized services for which employers are prepared to pay, it is also necessary to maintain a balance between income from subscriptions and revenue from other sources, in order to maintain the identity of the employers' organization as one which is not a commercial enterprise.
Supplying services to enterprises
14. The key to providing relevant and useful services to members is to first identify their needs through mechanisms such as membership surveys and consultations through other means. Where it is not feasible to provide a necessary service, outsourcing and strategic alliances should be resorted to. All services need to be continuously assessed.
15. There is a need to be proactive, innovative and flexible in responding to identified needs of members. It may be necessary to create new organizational structures with separate funding and specializations to meet the needs of some segments of membership.
16. At the heart of an organization's ability to produce quality services are the skills at its disposal. Investment in skills creates potential for growth.
17. Knowledge needed by employers is one of the most valuable products an employers' organization can provide to members. With the development of information technology and the explosion of information, knowledge management is a new service area of great potential for employers' organizations. The challenge is to package the information in ways that make it immediately useful for enterprises. Employers' organizations should have a major advantage over others in being able to gather, analyse and package labour market information for members and potential members, including overseas investors. Cooperation with employers' organizations in other countries, and the use of their international network, can significantly add value to their information services.
18. With competitiveness being the most critical issue for enterprises, benchmarking could develop into a new service which employers' organizations can provide to members. International networking and collaboration arrangements to identify best practice can enhance the value of such a service.
Geneva, 21 April 1999.