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Euro will impact on HR

John Philpott, chief economist at the Chartered Institute of Personnel and Development (CIPD)

John Philpott, chief economist at the Chartered Institute of Personnel and Development (CIPD), warns that the euro is a challenge to many organisations in the UK. Philpott says, ìWhile the UK remains outside the zone, UK organisations risk falling behind to the competition generated by the euro. 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 enhance business performance. Many organisations in the UK are already doing this - but not allî.

While planning for Europeís new currency has been a preoccupation for the finance function and many UK businesses, its impact goes much further says the CIPD. Philpott adds, ìWhile we do not really know the full consequences of the euro, it will certainly impact on the personnel and HR functions. It could mean a possible brain-drain as workers compare pay rates across the eurozone. The personnel function 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. The latter may be particularly important for a relatively low productivity/low wage economy like the UKî.

www.cipd.co.uk