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Why do the French often have a difficult relationship with work?

November 21st, 2011 7 comments

The Economist has an interesting business column that recently addressed the relationship that French workers have with their jobs. Over the past years, people abroad have heard of disgruntled factory workers “boss-napping”, holding different kinds of strikes and working 35 hour weeks. These are stereotypes, and most French workers are at the office more than 35 hours. In fact average work time for full-time employees is 41 hours) and all employees taken into account, 39.4 hours. I know I work more than that!

According to several studies, France has one of the world’s most productive work forces. As recent as 2009, they had the world’s most productive work force (description of productivity).

This site has some benefits of doing business in France, as well as some challenges.

Incidentally it appears that often management teams at many French companies are responsible in part for this unhealthy relationship, as many directors come from a few grandes écoles (elite schools) and thus career advancement can be hindered within companies that retain top-down power structures with a few elite at the reins.

However, the article (below with some boldfaced parts) cites companies such as Danone which has been refreshingly open to basing promotions on skills rather than which elite school an employee attended. Other companies cited are Alcatel-Lucent and Schneider Electric.

What do you think? Do you agree, disagree? What is your experience working in a French company with French workers?

Schumpeter
The French way of work

Managers must shoulder some of the blame for France’s troubled relationship with work
Nov 19th 2011 | from the print edition

EVERY year, Sophie de Menthon, a French entrepreneur, holds an event called J’aime ma boîte (I love my firm) in Paris. The idea is to counter the notion that the French don’t like work. Employees are enticed to make lip dubs (a video of them lip-synching to music, if you need to ask), massage each other, vote for the nicest colleague, arrange for the accountant to swap jobs with the secretary and other stunts to celebrate their firm.

The much-mocked campaign has not had much luck. In 2007 a national strike interrupted the festivities, and in 2009 a series of suicides at France Télécom spoilt the atmosphere. This year employees showed less love for their boîte than ever before. Only 64% of those polled liked their company, down from 79% in 2005.

A truer reflection of work attitudes came this summer when French workers covered office windows with huge pictures made up of Post-it notes. Employees at GDF-Suez, a utility, stuck thousands of them to the windows of its HQ near Paris to represent Tintin, a comic-strip hero. Société Générale’s bankers responded with a picture of Asterix and Obelix across six storeys. A few employers cracked down on the time-wasting, but most did not dare.

Many outsiders conclude that French workers are simply lazy. “Absolument Dé-bor-dée!” (“Absolutely Snowed Under”), a book which came out last year, described how state employees compete to do nothing at work. Another title in this bestselling genre on avoiding toil, “Bonjour Paresse” (“Hello Laziness”) by Corinne Maier, an economist, explained how she got away with doing nothing at EDF, another utility.

In fact studies suggest that the problem with French employees is less that they are work-shy, than that they are poorly managed. According to a report on national competitiveness by the World Economic Forum, the French rank and file has a much stronger work ethic than American, British or Dutch employees. They find great satisfaction in their work, but register profound discontent with the way their firms are run.

Two-fifths of employees, according to a 2010 study by BVA, a polling firm, actively dislike their firm’s top managers. France ranks last out of ten countries for workers’ opinion of company management, according to a report from 2007. Whereas two-thirds of American, British and German employees say they have friendly relations with their line manager, fewer than a third of French workers say the same. Many employees, in short, agree with Ms Maier, who recommends that chief executives be guillotined to the tune of “La Carmagnole”, a revolutionary song.

If French work attitudes are out of the ordinary, French management methods are also unusual. The vast majority of chief executives of big firms hail from one of a handful of grandes écoles, such as École Polytechnique, an elite science school. Through what is known as parachutage, they can arrive suddenly from the top ranks of the civil service. Air France KLM, for example, announced unexpectedly last month that its new chief executive would be Alexandre de Juniac, formerly chief of staff to Christine Lagarde when she was France’s finance minister.

Although the grandes écoles are superbly meritocratic—candidates compete against each other in a series of gruelling exams—their dominance of corporate hierarchies makes workplaces much less so. At a big French bank recently, a manager promoted an executive, only to be reproached by a furious rival who said he should have been given the job because he had done better in the final exams at the same grande école.

As Thomas Philippon, a French economist, pointed out in “Le Capitalisme d’Héritiers”, a 2007 book, too many big French companies rely on educational and governmental elites rather than promoting internally according to performance on the job. In the country’s many family firms, too, opportunity for promotion is limited for non-family members. This overall lack of upward mobility, argues Mr Philippon, contributes largely to ordinary French cadres’ dissatisfaction with corporate life. A study of seven leading economies by TNS Sofres in 2007 showed that France is unique in that middle management as well as the lower-level workforce is largely disengaged from their companies.

For those farther down the ladder, French companies are hierarchical, holding no truck with Anglo-Saxon notions of “empowerment”. And bosses are more distant than ever. A big change in French management, says Jean-Pierre Basilien of Entreprise & Personnel, a Paris research centre, is that industrial managers now seldom rise through the ranks. Fifteen years ago a leading graduate would have worked in factories before moving to headquarters. Now many come up via finance or strategy.

From the ranks

There are important exceptions. Danone, a food-products firm, is one. It has made a big effort to promote people solely on competence, says Charles-Henri Besseyre des Horts, a professor at HEC, a business school which is one of the elite grandes écoles. The 2006 merger of Alcatel, a French telecoms-equipment firm, and Lucent, an American one, created a less hierarchical group. Alcatel-Lucent even encourages teleworking, uncommon in France because it means trusting workers not to goof off. Jean-Pascal Tricoire, chief executive of Schneider Electric, an ambitious energy-management firm, came up from the ranks.

French companies have particular reason to worry now about their bad boss-worker relations. An important factor in the growing gap in industrial competitiveness between France and Germany, said a recent study by Coe-Rexecode, an economic-research centre, is that German bosses and employees are better than French ones at working together. French bosses badly need to follow in the footsteps of Danone and other modernisers. If they try and fail, then at least they can blame the workers.

Mideast turmoil, record gas (petrol) prices in France

Prices at the pump are at record levels in France, largely due to the rise in oil prices which in turn can be explained by the instability in the Middle East, especially in Libya, (when is it ever stable? I guess I should say exceptional instability). Of course it’s necessary to take into account the VAT (value-added-tax) at 19.6% (tax that goes to the French state). But there is also the TIPP (taxe intérieure sur les produits pétroliers), a tax on petrol-based products explained in detail here.

Right now the average price for unleaded 95 grade is 1.5067 euros per liter (according to report by BFM TV). You can watch the video here in French. This is the first time it’s surpassed 1.50, or about $7.92 per US gallon at today’s exchange rate. Some analysts even predict prices may continue to rise and surpass the 2 euro mark.

News sites like RTL are showing anger against these price hikes, blaming it on the State and the oil companies. You can follow energy prices here at Bloomberg.

France to eliminate tax cap, reform wealth tax

France is unfortunately known for its high taxes. One of the recent fiscal measures, le bouclier fiscal or the tax cap (a.k.a. tax shield) limited all direct income taxes to 50% no matter the income bracket. I wrote about this recently on Bonjour Paris. Those who defended it said it lightened the load of taxes, but those opposed to it reckoned it protected the wealthy while not contributing to reducing the deficit and debt.

Recent debate lead up to today’s decision, announced today by Prime Minister François Fillon, to end the policy. (However, some sort of tax cap will remain in place, at an unspecified percentage, for the less well-off, which make up 52% of the beneficiaries). You can see the French article from Le Point at the link above, and the video from BFM TV below.

Below the video, excerpts from this Wall Street Journal article. Next on the agenda: reforming or abolishing the wealth tax (see more in WSJ and Bonjour Paris articles as well as a detailed report by Le Figaro), which could help as many as 300,000 households pay less tax.

What are your thoughts on these developments?

EUROPE BUSINESS NEWSMARCH 3, 2011, 7:38 A.M. ET
French Prime Minister Says Tax Shield to be Abolished

By WILLIAM HOROBIN

PARIS—French Prime Minister François Fillon Thursday confirmed the government intends to abolish a tax shield that has become a controversial hallmark of Nicolas Sarkozy’s presidency.

Mr. Sarkozy decreased the threshold of the tax shield shortly after coming to power in 2007 so that no taxpayer pays more than half their income in taxes. But his ratings have hit record lows and the tax shield has become a thorn in his side as many voters see it as a measure benefiting the wealthy few.

“We have to face up to reality: the tax shield has been misunderstood, and the crisis has probably made our citizens more sensitive to some of its effects,” Mr. Fillon told a conference, organized to discuss the reform of property and capital taxes that Mr. Sarkozy has promised for the first half of 2011.

The tax shield was designed in part to limit the impact of France’s wealth tax, which Mr. Sarkozy also intends to reform before the presidential elections in May 2012.

The government says it will either do away with the wealth tax completely or significantly modify it. Mr. Fillon said Thursday said the reform will free 300,000 households from the wealth tax.

Yet the government is insisting the reform must have a neutral impact on public finances at a time when France is fighting to rein in deficits. If the wealth tax and the tax shield are abolished, the government will need around €3.2 billion ($4.44 billion) to make up the shortfall.

“We won’t finance this reform with debt. Balancing the budget will be strictly respected,” Mr. Fillon said.

He also ruled out a variety of options that have been suggested in recent months. The government will not tax gains on the sale of main residences, will not reverse its reduction of inheritance tax, and will not introduce an additional tax bracket, Mr. Fillon said.

Mr. Fillon also said the reform of capital and property tax is one of the reforms necessary for greater tax convergence in the euro zone.

European leaders are negotiating a competitiveness pact for members of the euro zone. Some countries have balked at Franco-German proposals that they fear would compromise their sovereignty in sensitive areas like pensions and salaries.

Mr. Fillon said France and Germany should aim to harmonize corporate taxes, starting with the base of these taxes before looking at the rates.

French strikes set for Nov. 23, but don’t expect large turnout

November 22nd, 2010 No comments

The contested pension reform has become French law, but some unions (CFDT, CGT, FSU, Solidaires, Unsacette) and other opponents to the measure are insisting that the strikes must go on. But it likely won’t have any important impact, except for annoying commuters and parents. However, traffic will not be nearly as disrupted as other days. It has been a long road of reform and protest, as France24 writes.

Le Volontaire has a list of strikes organized around France, by départment (and city).

Left-wing newspaper L’Humanité unsurprisingly calls this an “unjust reform” and supports the strikes, with a list of cities participating (similiar to the one above, with some variation). In Paris, the action will start at metro Opéra at noon, pass by la rue du Quatre Septembre, la Bourse des Valeurs, palais Brongniart and finish at place de la Bourse around 2pm.

On the other side of the political spectrum, business newspaper Les Echos (like the French Wall Street Journal) is calling this the “last-ditch stand” (baroud d’honneur) of unions.

According to the SNCF’s site, TGV, Téoz and Intercité trains will not be affected. However, certain regional TER trains could be (look by region). So far the Paris area RATP website is not updated with strike information, but will likely have delays on certain bus lines that go to métro Opéra.

THIS JUST IN: The following bus lines will be interrupted with irregular intervals between about noon and 2pm tomorrow in Paris: 20, 21, 22, 27, 29, 39, 42, 48, 52, 53, 66, 67, 68, 74, 81, 85, 95 and Roissybus. This is especially important for those planning on taking Roissybus from Opera to CDG Airport. If you think this may disrupt your plans, you can opt for RER B at about an equal cost (around 9 euros), or taxis will run you about 35-40 euros. The

For updates on RER suburban line trains, you can see this site. Lyon’s TCL transport system will not be affected. For updates on other cities’ transport systems, you can check this link from a previous strike day. You can check the status of trains in major stations at this site.

French CAC 40 stock market up on US Fed news

November 4th, 2010 No comments

The CAC 40 stock market rose above 3900 points Thursday morning, its highest point in six months. This represents nearly a 2% rise. For background on the Federal Reserve’s decision to inject a further $600 billion into the US economy in a second round of “Quantitative Easing”, you can check out BBC’s special report and their Q&A feature. The Economist also presents sound analysis of the Fed’s move.

For further analysis in French, you can read this article from Les Echos, the French equivalent of the Wall Street Journal, which itself features in-depth coverage of the Fed’s move.

EU faces significant economic growth challenges

In a related WSJ piece, the conclusion is made that despite signs of improvement in the EU economy, there are underlying challenges that could surface as big problems. Excerpts below…to read more click on the link.

“…According to Markit, an expanding service sector is increasing French private sector output “at a strong pace,” and employment growth in that sector rose in July for the third consecutive month. And outside the euro zone Britain seems to be adding a bit of optimism to European-wide sentiment: The U.K. economy grew 1.1% in the second quarter from the first quarter—or an annual rate of about 5%—twice what forecasters had predicted and the fastest rate in more than four years….So much for what is obvious to the analyst’s naked eye. Look below the surface and we see something very different…”

Revitalizing French business and making France more competitive

This engaging piece in the Wall Street Journal Europe features the Director of MEDEF, the national employers’ association, Laurence Parisot, talking about the challenges facing French business and the EU in general, and how to overcome them to implement growth. What is your experience with French business, and how do practices in France differ from those in your home country?

Because WSJ is often paid-only access, I’ve posted the entire article below. Happy reading.

Breaking France’s Business Mold
EUROPE BUSINESS NEWS AUGUST 2, 2010

By CARL MORTISHED

Laurence Parisot is a household name in France. In a recent poll by Sunday newspaper Journal du Dimanche, the boss of French employers’ organization Medef featured alongside famous actresses as one of the country’s most popular women.

Until recently, the job of running Medef was an attractive sinecure for a retired industrialist, but the diminutive Frenchwoman has broken the mold, using the Medef platform to make business politically sexy; no mean feat in France, where for decades it was a dirty word.

A friend and confidante of President Nicolas Sarkozy, whom she met at Sciences Po, the elite political-science school, Ms. Parisot has just been re-elected for a second five-year term at Medef. Now, she wants to go further and use Medef to promote the interests of business across Europe, and she is looking to the Confederation of British Industry in London, the BDI in Berlin and Confindustria, the Italian employers’ lobby, to achieve that goal.

“In September we will make some initiatives between employers’ organizations between key European countries,” she says.

Ms. Parisot acknowledges that bringing national business interests together will be difficult and will require compromise. Each country has its strengths and its challenges.

Britain’s problem, she says, is its decision a decade ago to focus on financial services—a mono-industry, as she describes it—while France’s Achilles’ heel has been its slowness to bring about structural reforms.

“For Germany, the main problem is they are first in class and they are waiting for others to arrive at their level,” she says.

Ms. Parisot wants EU governments to rally round European champions. For example, she says, “London is the City. As a French person I would prefer it to be Paris, but as a European, I really prefer that we keep the City in London than that some new regulations, such as Basel III, push all the financial people to Hong Kong or Singapore.”

The Basel III reforms to banking regulation are a key concern for Ms. Parisot, who considers the tightened solvency rules a potential threat to the EU financial sector. The drive for tighter regulation is inspired in Washington, she says, even though the U.S. was slow to implement the Basel II rules.

“The danger comes from the U.S., and the impact on the cost of credit and volume of credit will be very significant. This is a very important competitiveness issue,” she says.

Last week she co-wrote with CBI Director-General Richard Lambert and the boss of the BDI a joint letter to the British, French and German environment ministers, castigating them for their support for deeper cuts in carbon-dioxide emissions.

The letter came after Chris Huhne, the U.K. energy secretary, and his French and German counterparts, Jean-Louis Borloo and Norbert Röttgen, earlier in July called on the EU to raise its target for reducing greenhouse-gas emissions to 30% by 2020 from 20%.

“We were very upset,” Ms. Parisot says. “We wrote a tough letter to these ministers. To reduce by 20% our CO2 by 2020 is a big step which costs a lot and which is quite harmful in competitiveness.”

Ms. Parisot reckons Mr. Borloo’s stance hasn’t secured wide support within the French government, but Britain has set out its stall to be at the cutting edge of climate-change legislation. Ms. Parisot is worried climate change is one of many policy areas in which European business risks losing its competitive edge.

She also criticizes DG Competition, the EU’s antitrust directorate, for being too focused on the internal market, thereby hindering European businesses keen to join forces in order to face global competitors.

“DG Competition is less harsh towards Microsoft when it seeks to establish itself in Europe than when two Europeans wish to grow together. I am in favor of competition but it must be on the right scale. The scale today is the planet, with powerful new forces being built in Brazil, India, Indonesia. We must raise the bar together.”

Ms. Parisot wants European employers’ organizations to find common ground for some projects, even in the area of industrial policy, a subject she describes as taboo in Britain. For example, she argues, Europe needs to coordinate its efforts in nuclear power.

“Areva and Siemens split. Siemens is looking towards Russia and Areva towards Japan. Isn’t it crazy? We all know energy will be the most important thing for 20 years forward,” she says.

Ms. Parisot insists she is not an interventionist, and she has a track record in France of being on the political right, an economic liberal, opposing subsidies and campaigning for economic reform. She is a businesswoman to the core, having inherited Parisot Group, her family’s private furniture business. And with family backing, she bought 75% of Ifop, the French polling organization. In her first term at Medef she promoted key economic reforms, including raising France’s state pension age by two years, and she recently forced the government to retreat on measures such as the imposition of a carbon tax and curbs on executive pay.

She also describes herself as a “very strong feminist” and has promoted a new law, currently in Parliament, requiring that women make up 40% of the boards of leading companies.

It is a reform that strikes a personal chord for Ms. Parisot. Aged 50 and unmarried, she says she has battled discrimination at every stage of her career, and she reckons the climate for French professional women has deteriorated over the past decade.

“I encountered misogyny every day, every morning. Sometimes you don’t see it. Sometimes I didn’t understand why I didn’t get a contract,” she says.

She believes Europe needs to harmonize. Even on taxes? Yes, she says, and that means bringing business leaders to the political table. In the past, progress in Europe depended on good relationships between the French president and the German chancellor. Today, she says it has become too complex for governments alone to form policy and do deals. There must be a compromise and business must be part of the deal.

“That is why I push my colleagues from CBI, from BDI and from Confindustria. If we think European competitiveness is an issue, we have part of the responsibility to move forward,” she says, adding “If we continue [the way we are going], I am pretty sure we will be weaker and weaker. L’union fait la force. The potential if you put the U.K., France and Germany together. Can you imagine the potential that represents? If we don’t react, China will swallow us. And India, too.”

—Carl Mortished is a writer living in London.

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