HR in France

As one of the largest countries in Europe, making up one-fifth of the continent's total population and ranking as the sixth largest economy in the world, France is steadily advancing on the back of a usually strong economy. Recent studies noted that France also leads the G8 countries in terms of productivity (measured as GDP per hour worked); and the diverse country also currently ranks as the world's top tourist destination ahead of Spain (55.6 million in 2005) and the US (49.4 million in 2005), with 79.1 million foreign tourists visiting its shores in 2006 alone.

Yet despite a generally burgeoning economy, a range of developing sectors and figures which indicate a higher productivity per hour worked than in the US - France's GDP per capita is significantly lower than the US GDP per capita, being in fact comparable to the GDP per capita of the other European countries - which is on average 30% below the US level.

The reason for this is that a much smaller percentage of the French population is working compared to the US, lowering the GDP per capita of France, in spite of its higher productivity overall. In fact, France has one of the lowest percentages of its population aged 15-64 years at work among the OECD countries.

France At A Glance

Even though France has a highly-educated labour force, unemployment is still a major problem, which has been exacerbated by a slow down in the economy in the first half of 2007.

And although France's economic stumble is on the mend - with exports now improving, business investment accelerating once again and the lull in French consumption likely to pick up as the year advances - the main problem of chronically high unemployment, which has plagued France since the 1970s, continues.

Talent challenges and strategies

In 2006, just over 60% of the French population aged 15-64 years was employed - compared to 68% in Germany, 70% in Japan, 73% in the UK, and 72% in the US and Australia.

This is the culmination of almost 30 years of massive unemployment in France, which has led directly to a reduction in the size of the working population. About 8.7% of the active population (2006) is without a job; students delay as long as possible their entry into the labour market; and the French government gives various incentives to workers to retire in their early 50s, although these are now receding.

Many economists have stressed repeatedly that the main issue with the French economy is not an issue of productivity, but rather a need for structural reform of the country's rigid labour market.

Both Liberal and Keynesian parties see different ways to tackle the problem, but the key lies in fundamentally rethinking and re-inventing the notion, width and depth of job contracts and tweaking the social security scheme (la protection sociale) - whose two tier employee/employer financing is at the heart of the troubled French labour market.

But, given the very complicated structure of France's labour market, practical fix-all solutions are hard to come by, and even recent government attempts at adjusting the major issue of the youth labour market, to combat unemployment, have met with fierce resistance.

Consequently, turning over a new leaf to reinvent and refresh the French labour market overall is one of the main priorities for the French government in 2007, and there have been a number of policy changes and incentives put into place to boost the nation's human capital, with more to come in the face of the new administration by president Nicolas Sarkozy.

· Youth unemployment:

Over the last 20 years, youth unemployment has become a major issue of the French labour market situation, and therefore a key challenge for all successive governments. Figures for 2006 from Eurostat indicate that 23.1% of youth in the age group of 15-24 years were unemployed.

The government of Dominique de Villepin implemented several measures to promote job creation:

- Financial incentives
- Income tax cut totalling SGD3.5bn
- Encouraging unemployed young adults to work in sectors with labour shortages (hotel industry, restaurants, etc) by offering them a SGD1,000 tax cut per year
- Offering a one-off financial reward of SGD1,000 to a long-term unemployed person who finds a job
- Cutting taxes and social security contributions for businesses that hire apprentices
- Cutting taxes and social security contributions for businesses that provide 'face-to-face' services (hairdressers at home, helping the elderly, childcare)
- Removing a 'fine' for businesses that fire seniors

Creation of new employment contracts:

The French government has found it necessary to introduce new types of contracts to help those who are most likely to be unemployed, particularly young adults.

- The 'New Employment Contract' (or CNE, meaning Contrat Nouvelle Embauche) concerns micro-enterprises (business with less than 20 employees). It rewards employers who want to rapidly expand the size of their business by reducing social security contributions, eliminating financial disincentives to growth, and by reducing the amount of paperwork associated with hiring employees. The first two years of the contract are to be considered as a test period, during which the employee is exempted from unfair dismissal cover and will receive government assistance in case of dismissal. Once the two-year test period has lapsed, the employee will become a permanent full-time worker.

Employment opportunities:

- In 'sensitive high-risk urban areas' (Zones urbaines sensibles, ZUS), a bonus of SGD1,000 will be awarded to companies and public authorities that recruit young graduates from these neighbourhoods. The graduates will benefit from the support of a recruitment agency. Along with the 5,000 young people who are currently beneficiaries of this program, the government has announced 15,000 new places. Beneficiaries will also be able to make use of a new high-quality label concerning 'diversity and geographic equity', which should be taken into account in future recruitment.

- People over 50 years of age, who have been in receipt of the Specific Solidarity Allowance (Allocation spécifique de solidarité, ASS) for more than two years:

• benefit from assistance, similar to the CIVIS initiative for young people, in the form of 'training to adapt to a job, which has been identified by a company or the ANPE'
• will be able to sign a 'contract for the future' (Contrat d'avenir), which is totally financed by the state in the form of a 'social cohesion bonus' for companies. They will also receive individual assistance in their job-seeking efforts or for the purposes of a business start-up. 

Employment laws
France is an industrial economy where labour laws are designed to protect the interests of employees and yet are suited to the economic priorities of business. Labour relations are governed by the Labour Code and by industry-specific collective bargaining agreements that reflect the practices of each industry.

· Minimum working age (to work full-time): 16 (but limitations until 18)
· Working hours: A lack of employment opportunities for college graduates made way for legislation passed in 1998 to shorten the legal workweek from 39 to 35 hours. The working week is Monday to Friday. The working day depends on the company, its sector, corporate culture, size and location in France. 
· Trade unions: Approximately 1.38 million people in France - 5% of the working population - are union members. This is the lowest percentage in the EU.

· Leave: Employees are required to have worked for at least one month (four weeks or 24 days) before becoming eligible to take first holidays. You earn two and a half days holiday per month worked, which is five weeks per year.

· Maternity leave: All mothers have the right to a minimum of 16 weeks of paid maternity leave. Up to six weeks of the allowance may be taken as prenatal leave (repos prenatal), which is taken before the estimated birth date (la date présumé) and the remainder as postnatal leave (repos postnatal). After the third child, an employee can ask for longer maternity leave: eight weeks before the date of birth and 18 after.

· Paternity leave: All new fathers have the right to paternity leave of 11 days (18 days for twins or more)

Tax and contributions

Income tax is based on family income rather than individual income - so, for example, if both husband and wife are working, tax will be calculated on their joint income, with tax relief then being applied depending on the number of people in the family.

Minimum wage

On 1 July 2007, the guaranteed monthly minimum wage (salaire minimum interprofessionnel de croissance - SMIC) was SGD1,280.07 gross for a working week of 35 hours at an hourly rate of SGD8.44.

Overtime payments are usually fixed by collective agreement, but they have to be paid with at least 10% extra/hour. In the case of no other agreement, overtime is paid at 25% extra/hour for the first eight hours and then at 50% extra/hour.

Largest employers

Source: www.myglobalcareer.com; www.wrightreports.ecnext.com

Case study: Carrefour group, France

With over 456,000 employees - 140,000 of them in France - the Carrefour group ranks among the top 11 private employers in the world. In 2006, the group recruited 86,000 new employees globally, with 13,000 of them in France. Wherever it is in the world, Carrefour aspires to be seen as a benchmark in HR management and social responsibility. Attracting, training, supporting and securing the loyalty of employees are paramount.

The group makes every effort to support the development of its staff members - who they describe as its ambassadors in dealing with the company's customers - by providing employees with a choice of career paths, opportunity for specialisation in various areas of the worldwide company, and the training and development resources to do so. Teambuilding is also a key objective for the business.

Training, development and corporate culture

One of Carrefour's key goals is to be considered an exemplary employer. To help achieve this, the group has put in place feedback mechanisms that allow it to understand employee expectations regarding career development and to help them in acquiring new skills. The group gives priority to internal promotion, which it combines with an active policy of training and career management.

As a result of the group's approach to career management and support, employees are offered a range of opportunities for professional development. For example, they have the option to train towards different responsibilities and to progress to management if they have the potential. The Carrefour group also offers opportunities to transfer between its different divisions and geographical locations.

The professionalism of employees is a key factor that serves to differentiate Carrefour as a company and the company recognises the support that new skills acquisition provides for the personal development of their employees. It takes a proactive stance with regard to training - something that contributes to their collective performance and enables employees to develop their expertise.

Training is offered in all job roles, at all levels and at all stages of an employee's career. In 2005, 69% of the group's staff participated in at least one training module.

In addition, group companies run their own specific training schemes and seek to form partnerships with a range of external institutions. The Carrefour group has always supported local recruitment, and consequently bolsters the strengthening of skills by setting up training centres in those countries where it maintains a presence.

Facts and trivia
· French Prime Minister Dominique de Villepin introduced the First Employment Contract, (Contrat Première Embauche), in an attempt to introduce flexibility into French labour markets and bring down the stubbornly high unemployment rate among the country's youth.

The CPE would allow employers to hire workers under the age of 26 for a two-year probationary period, during which time their employment could be terminated without explanation. After probation, the employee would get the standard labour contract.

The legislation was greeted by mass protests by French students. Millions took to the streets to demonstrate against a measure that they claimed discriminated against them by denying them the protections afforded to other workers. They were joined by national labour unions, which called general strikes in support of the students. This proved too much for the Paris government, and after the CPE was passed into law in early April, President Jacques Chirac asked businesses not to apply it. Escalating protests forced President Chirac and Prime Minister de Villepin to backtrack completely. They used their parliamentary majority to quickly purge the law from the statutes and replace it with vocational training for young workers and financial incentives for employers to hire them, even though similar programs already existed.

· In France, once employees have worked for a company for more then three years, they can also ask for a year of sabbatical (année sabbatique). This is effectively unpaid leave, but social security coverage can be retained, as well as the right to return to the position or an equivalent in the company.

· Traditionally, holiday leave is taken in August. In France this month is 'sacred' and the country practically comes to a halt. Some companies officially close, and many small shops, restaurants and local service providers also shut their doors - with the exception of those in tourist areas, of course.

Sources:

· www.investinfrance.org/France/DoingBusiness/Employment/?l=en
· www.oecd.org/document/0/0,3343,en_33873108_33873376_38823744_1_1_1_1,00.html
· www.cia.gov/library/publications/the-world-factbook/geos/fr.html
· www.insee.fr/en/indicateur/analys_conj/conj_resume.htm
· www.oecd.org/els/employmentoutlook/2007
· www.carrefour.com