The CIPD has warned employers that the introduction of the euro means HR
departments will have to be more innovative to prevent a ‘brain drain’ of top
staff.
Philpott, the CIPD’s chief economist, said employers will have to compete
even harder to recruit and retain the best workers because the euro will make
pay rates across the eurozone increasingly transparent.
He said: "While we don’t really know the full consequences of the
introduction of the euro, it will certainly impact on personnel and HR
functions. It could mean a brain drain as workers compare pay rates across the
eurozone."
"HR will have to construct more sophisticated reward systems to attract
and retain talent and where necessary establish mechanisms for dealing with
euro-wide bargaining."
Philpott also expressed concerns that UK companies may fall behind their
European counterparts while the country remains outside the new currency.
"As consumers compare prices across Europe, the pressure on
organisations to become more efficient and produce higher quality goods will
increase.
"This could be tackled by applying good people management through
effective on-the-job learning, team-working and non-hierarchical
structures."
