le 14 juin 2020
Workforce lending: a barrier against unemployment?

Tribune originally published in French in Les Echos on June, 14, 2020

In the two months it took the crisis to devastate employment, 12.9 million people have benefitted from the furlough scheme, i.e. more than one out of every two employees in the private sector. This government measure, which is highly effective in protecting jobs, also leans very heavily on state finances. « Wage nationalisation » has already cost the state almost 26 billion euros. Logically, the government is reviewing its legal arsenal to find alternative solutions that could take the baton from public spending.

Among these schemes, inter-company workforce lending is back in the spotlight. It boasts a lot of advantages in coping with the severe social aftermath of the Covid-19 epidemic.

Personalised support

The equation is quite simple: rather than putting its employees on part-time, a corporation in dire straits can lend some of its workforce employees to a sibling company lacking in resources. The « lending » company keeps the employees in its workforce, the host company rapidly finds itself bolstered by a skilled and available workforce, and the employees get their full salary. The mechanism is definitely win-win. Right, but here’s the thing, labour loans are nothing new. Enshrined in the labour code since 2008, their use by companies has so far remained highly confidential because they require formidable organisation skills.

To make it easy to use employee loans between companies, the government wants to relax go-ahead red tape. However, an employee’s switch from one company to another doesn’t just involve legal issues; it also takes personalised support plus an extra large portion of goodwill.

Psychological obstacles

The workforce lending scheme can certainly be an effective weapon to fight unemployment, provided that it takes the constraints of the companies and the employees involved into account. To put it bluntly, temporary secondment is not always a breeze. In a given job pool, it presupposes the existence of a sufficiently dense company population with reasonably consistent skills needs, and whose businesses have been impacted by the crisis in different ways.

In addition to this prerequisite, there are psychological obstacles. Employees volunteering to lend a hand will find it difficult to travel more than 25 kilometres from their homes. Very different worlds can hide behind two apparently similar job titles. Company cultures, requirement levels, the business sector, the materials in process, working hours, etc. are all reasons for destabilising employees and eventually threatening workforce lending with failure. Plus, the anxiety-ridden Covid-19 lockdown may lead some employees to prefer working part-time rather than going back to work in health and safety conditions perceived, rightly or wrongly, as insufficient. And who can blame them?

Voluntary basis

Nonetheless, I am convinced of the relevance of employee loans to limit the impact of the crisis on employment, provided that a tailor-made scheme is implemented. We have put this approach into practice with HR consultancy partners, our human resources consultants. Since 2019, our teams have been coordinating and running Agil’Agro, a workforce loan scheme available to agri-food companies in the Finistère. Fourteen companies have joined this collective, and have enabled us to identify the key drivers for a successful employee loan.

This is true because, for surefire success, the willingness of the companies and the motivation of the employees are essential, but not sufficient. Employees must first undergo an employability diagnosis designed to identify their transferable skills. On the company side, analysing the vacancy and an HR diagnosis can provide the right induction, integration and safety conditions. Labour loans operate on a voluntary basis. They are often the result of a meeting and, so to speak, of a process of seduction. But this mutual attraction cannot leave anything to chance.

The main challenge of economic recovery, both for the state and for companies and their employees, will be to curb the social impact of the crisis as much as possible. In this balancing act, the government rightly intends to gradually lift the partial employment scheme, which has brilliantly performed its role as a shock absorber, at the cost of a public debt that gets a little bigger every day. Provided they are well organised and encouraged, labour loans can definitively come into their own and become one of the cornerstones of the barrier we need to build against unemployment.

Frank Ribuot
President, Groupe Randstad France