A postcard from... Italy

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Our 'postcard from' series keeps you updated on key HR areas in different countries

Economic briefing

Italy has a diversified economy, which is divided into an industrial north dominated by private companies, and an agricultural south. The economy is largely driven by high-quality consumer goods manufactured by SMEs, many of them family-owned.

Public debt has increased steadily since 2007, reaching 133% of GDP in 2016. The government faces pressure from investors and European partners to sustain its efforts to address long-standing structural impediments to growth. Italy’s economy returned to modest growth in late 2014 for the first time since 2011.

Demographics

Italy is not particularly ethnically diverse, with most non-Italians coming from other European nations such as France, Germany and Greece. The country is highly religious; 80% of the population is Christian (overwhelmingly Roman Catholic). Italy has a higher death rate (10.3 deaths per 1,000 people) than birth rate (8.7 births per 1,000 people), meaning that the population is shrinking. With low levels of migration this trend is likely to continue.

Legal lowdown

Italy’s employment laws regulate almost every aspect of the employment relationship. However, compliance can be difficult as there are several different levels of rules; for example individual contracts, territorial or company labour agreements, Italian legislation, and EU rulings. “A recent reform package known as the ‘Jobs Act’ is revolutionising the Italian labour market. The Act aims to simplify the legislative framework and increase flexibility in the labour market, all in the light of new economic needs and trends,” explains Andrea Gangemi, head of the employment team at Italian law firm Portolano Cavallo.

From the HR frontline

Because the employment law situation in Italy is so complex most HR professionals will have detailed legal knowledge. “A lot of HR professionals have a legal background in Italy as people processes are overly complex and heavily regulated. It can be a minefield,” says Tea Colaianni, NED and chair of the RemCo at Mothercare and former group HRD at Merlin Entertainments.

Churn can be high, making recruitment and retention priorities for HRDs. “Many Italians nurture the dream of a job that lasts all of their professional lives, but unfortunately for them the Italian labour market is moving in the opposite direction,” Gangemi adds. “Permanent employment remains the main contractual type used by employers, but because of the new rules on termination introduced by the Jobs Act, ‘permanent’ no longer means ‘always’.”

“It is critical to invest in the development of internal capabilities and succession planning,” agrees Colaianni.

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