The CIPD has warned employers 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.
“While we don’t know really know the full consequences of
the euro, it will
certainly impact on personnel and HR functions. It could mean a possible
brain-drain as workers compare pay rates across the eurozone,” said Philpott.
"HR
will therefore have to construct more sophisticated reward systems to attract
and retain talent and where necessary establish mechanisms for dealing with
euro-wide bargaining. This
may be particularly important for a relatively low productivity/low wage
economy like the UK.”
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
can be tackled by applying good people management through effective on-the-job
learning, team-working and non-hierarchical structures, all of which can enhance business
performance.
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"Many
organisations in the UK are already doing this – but not all.”
