The social policy preferences of EU employers’ organizations: An exploratory analysis

Abstract

Despite decades of European social dialogue, little is known about the social policy preferences of EU employers’ organizations (EEOs). Building on the literature on industrial relations and the role of business in welfare state development, this article explores the preferences of key EEOs (BusinessEurope, SGI Europe and SMEunited) in vocational education and training (VET), active and passive labour market policies, pensions and work–family reconciliation. Software-based qualitative content analysis of 75 position papers and 19 joint declarations, triangulated with four elite semi-structured interviews, is employed to assess employers’ preferences along four national and two European dimensions. Largely in line with the power resources theory, EEOs favour cost containment and social investment, by strengthening labour market flexicurity and reducing skills mismatches through VET. Conflicting logics of membership and influence guide the actions of EEOs: members are wary of legislation impinging on national social policy traditions; yet, greater European assertiveness makes lobbying efforts unavoidable.

Keywords

European social dialogue employers’ organizations preference formation business and welfare social policy lobbying

Introduction

Tensions between European economic integration and the Member States’ capacity to control national welfare states have often arisen despite the relatively qualified competences of the European Union (EU) in social policy. The opening up of national redistributive systems, external access to domestic welfare markets and limitations to the regulative capacity of national authorities have transformed European welfare states from sovereign to semi-sovereign entities (Ferrera, 2005). The principles embodied in the European Pillar of Social Rights (EPSR) and the social cohesion objectives of the NextGenerationEU package are some of the latest additions to EU’s increased reach over national social policy (Vesan et al., 2021; Corti, 2022).

EU employers’ organizations (EEOs) are among the collective actors whose constituencies are most affected by supranational policy decisions. They fulfil four distinct roles (Aranea et al., 2021): they are lobbyists that represent the interests of their members, seeking to influence EU institutions; they act as social partners engaging labour unions through social dialogue; they provide services, informing members about EU developments; they set standards via voluntary norms and codes of conduct. Whereas the four roles are intimately linked to one another, this article’s focus is on lobbying and social dialogue, where preferences are most clearly expressed.

As opposed to the orientations of the labour movement, what supranational employers think of welfare is still scarcely explored (for an international business perspective, see Farnsworth, 2005). Aranea et al. (2021) summarize the actions of EEOs as resistance against binding EU social or employment legislation and reluctance in engaging in social dialogue, with the aim to stall binding regulation. There is more than a grain of truth in such depiction, yet, both theoretically and empirically the details are nuanced and in need of investigation.

This paper provides a first mapping of these preferences. Empirically, the article focuses on the three cross-sectoral EEOs that fulfil the representativeness criteria set out by the Treaty on the Functioning of the EU and represent, thus, their members during consultations with the Commission and the negotiation of collective agreements. These are the Confederation of European Business (BusinessEurope), SGI Europe (Services of General Interest Europe) and the European Association of Craft, Small and Medium-sized Enterprises (SMEunited). Given their importance as social partners and lobby groups, the article explores their preferences in four social policy areas: pensions, vocational education and training (VET), passive and active labour market policy (ALMPs), and work–family reconciliation. Being the latter a multi-dimensional social policy, the research focus is on those social services that enable the labour market participation mainly of women.

The article represents an exploratory exercise that innovates the thin literature on EEOs and their preferences in three respects. First, it constructs a new typology of social policy dimensions based on continua between opposite extremes. It identifies six relevant dimensions. Four pertain to the national social policy sphere, covering welfare effort (ranging between increased spending and cost containment), welfare provision (public or private), welfare boundaries (from universal to occupational) and welfare orientation (towards social protection or social investment) (see Colombo et al., 2022). Two underscore the multilevel character and upward convergence of EU social policy, consisting of welfare regulation (hard law versus soft law solutions) and harmonization (one-size-fits-all versus subsidiary approaches). Taken together, the dimensions create a welfare space into which each actor can be placed.

Second, the article provides a systematic collection of evidence. The applied part of the paper examines a conspicuous number of documents through software-based qualitative content analysis. The analysis yields three types of information regarding employers’ preferences over social policy: the policy sectors that figure most prominently in the documents; the key themes for each policy sector and the EU’s initiatives most salient for business; the positioning of EEOs on the continua of the analytical welfare dimensions individuated in the theory. This evidence is triangulated with four elite semi-structured interviews.

Third, key hypotheses mainly inspired by the power resources (PR) theory are tested. In a nutshell, evidence proves employers mainly care about social investment policies, which improve the functioning of labour markets and facilitate the acquisition of new skills. In line with the power resources theory, while they are not against the expansion of the rights of employees, they fret about the connected costs. Given greater policy entrepreneurship of, especially, the European Commission since the global financial crisis, employers’ qualified support of EU-level initiatives is more widespread than generally assumed. Exceptions are policies that potentially increase red tape and give little consideration to national social policy differences, where the ‘logic of membership’ of EEOs still prevails over the ‘logic of influence’.

Studying employers at the European level

Aranea et al. (2021) individuate 136 EEOs, of which 70 are registered as social partner organizations at the European Commission. There are several reasons why this article focuses on BusinessEurope, SGI Europe and SMEunited. First, they are recognized cross-sectoral social partner organizations that, together with the European Trade Union Confederation (ETUC), participate in European social dialogue, holding the right to be consulted before the start of a legislative process on social policy. Second, they engage in extensive lobbying, thereby publishing a higher volume of position papers and joint declarations, than sectoral organizations; hence, individual preferences are easier to extract. It has to be stressed that there is a clear ranking among European employers’ organizations, whereby BusinessEurope is considered Brussels’ most powerful lobby. Third, the three organizations endeavour to coordinate positions on EU legislation and initiatives beyond their membership. BusinessEurope has an established forum, the European Employers Network, that coordinates non-member sectoral employers’ organizations, while SMEunited and SGI Europe are the reference fora for, respectively, Small and Medium-sized Enterprises and public service employers (see Aranea et al., 2021).

BusinessEurope’s origins can be traced to 1949 and the European Coal and Steel Community. Following the Treaty of Rome, in 1958, the Union des Industries de la Communauté européenne (UNICE) was founded, representing eight confederations of the six founding Member States. In 2007, UNICE changed its name to BusinessEurope, which is a non-sectoral employers’ confederation, representing the interests of 40 federations including companies of all sizes in 35 EU and non-EU countries.

Often portrayed as the public sector counterpart of BusinessEurope, SGI Europe was founded in 1961 under the name European Centre of Employers and Enterprises providing Public Services and Services of General Interest (CEEP). SGI Europe represents enterprises providing services of general interest. Its members, 16 based in 17 EU Member States plus Turkey and the United Kingdom, are active in several sectors including healthcare, education, energy and transport. It moreover represents three sectoral federations: the European Broadcasting Union, the European Hospital and Healthcare Employers Association and the European Federation of Education Employers. SGI Europe has a dedicated social affairs and sustainability board.

SMEunited was founded as Union Européenne de l’Artisanat et des Petites et Moyennes Enterprises (UEAPME) in 1980 in Germany and then moved to Brussel in 1991. It was renamed as SMEunited in 2018. The organization has circa 70 member organizations from over 30 EU and non-EU countries. SMEunited claims to speak on behalf of the 22.5 million SMEs in Europe that employ almost 82.4 million people. Yet, SMEunited did not always actively participate in European social dialogue. Through a cooperation agreement, BusinessEurope represents enterprises of all sizes, including SMEs, while accepting SMEunited’s consultative role in European social dialogue (Welz, 2008).

The preferences of EEOs

Preferences of EEOs are defined here in terms of the concrete manifestation of ideal interests that refer to courses of action. They are based on some link between a problem and a solution (Colombo et al., 2022). The power resources theory posits that employers are often hostile to welfare development because of cost concerns. Business organizations are antagonists or, at best, unenthusiastic consenters to the introduction or expansion of social policies, mainly for tactical reasons linked to the distribution of political power resources, for example, a compulsory minimum scheme is accepted, when the alternative is the parliament or government unilaterally introducing a more generous one (Culpepper, 2015; Paster, 2012; Korpi, 2006). Research on varieties of capitalism is slightly more upbeat: employers are depicted as protagonists in welfare state formation, having the chief aim of securing a skilled workforce (Estevez-Abe et al., 2001). Recent literature has qualified both views, in that the preferences of employers are more varied, updating the factions of capital approach (see Mares, 2001, 2003). Such heterogeneity depends on a firm’s sector, size or territory and has led, in the face of disruptive external forces, to the stabilization of aspects of industrial relations and welfare regimes including, for example, collective bargaining in continental and southern Europe (Bulfone and Afonso, 2020; Pernicka et al., 2021) and VET in Switzerland (Trampusch, 2020).

Whichever view is espoused, the political/industrial relations and economic contexts matter for the formation of employers' preferences as do new ideas gaining legitimacy (Korpi, 1983; Münnich, 2011). Preferences are not exogenously given, but they are defined in response to the interaction with other political and socioeconomic actors in different institutional settings (Hall, 2005; Oude Nijhuis, 2020; Trampusch, 2013).

Thus, it becomes possible to distinguish between employers’ genuine and strategic preferences. In our case, the former are revealed in the position papers of individual EEOs; the latter in joint declarations issued together with other employers’ organizations or with the labour unions. Due to the industrial relation context, genuine employers’ preferences that are too distant from those of labour become unavailable and have to be substituted with strategic preferences that are least harmful for business (Paster, 2015). A necessary condition, however, to attribute strategic preferences to individual signatories of joint declaration is to know how these have been negotiated.

With regards, instead, to the intermediary role of EEOs, tensions in preference formation may arise due to the conflicting logics of membership and influence (Schmitter and Streeck, 1999; Schneider and Grote, 2005). If an organization transmits unfiltered demands from its members to political interlocutors, it may become politically marginalized. Similarly, heterogeneous interests at the membership level may hamper the capacity of the organization to act consistently. If, instead, the organization acts autonomously, it may gain political influence, but it may also estrange its members.

How do the two logics apply to EEOs? Although the literature debates the extent to which employers’ organizations aggregate the preferences of their members or, rather, shape them, all our interviews confirm that preference formation follows the aggregation of the preferences of the individual employers that constitute the collective actor. Being EEOs (at least) second-order organizations, they aggregate the preferences of national confederations only (on average, there are 3.4 employers’ confederations in every Member State; see Visser, 2019), otherwise they ‘would go crazy’ (INT2). Two considerations are due. First, at the European level, the ‘massive structural differences’ (INT3) in labour markets and welfare systems are fully exposed, thereby generating a natural inclination towards subsidiary solutions. Second, not all issues at hand elicit the same amount of collective effort (see Dialer and Richter, 2019). Issues that attract considerable public attention and generate conflict trigger greater collective action than highly technical policy areas, which require working arrangements and expert knowledge from a smaller number of actors, in line with ‘minilateralism’ (see Cotton and Gumbrell-McCormick, 2012). Consequently, few salient dossiers elicit the responses from most members of EEOs, examples being the Minimum Wages Directive, proposed by the Commission in October 2020, or the European Pillar of Social Rights.

Due to the involved complexity, preference aggregation is often a two-step process. For example, BusinessEurope has eight working groups (Industrial relations, Education and training, Employment and so on) within its Social Affairs Committee. The first step is the preparation of positions at the technical level in the working groups. Once the positions are technically sound, they are discussed for adoption in the Social Affairs Committee, to which all member federations are invited. Similarly, SMEunited has a Social Affairs Committee and SGI Europe a Social Affairs Board used to hammer out common positions. When unanimity is unattainable, position papers point out which members do not agree. An example is SMEunited’s position on the Platform Work Directive, not shared by the French members Union des Entreprises de Proximité (‘U2P) and CMA France.

As for the EEOs’ specific interest in social welfare, how does social policy rank vis-à-vis other policies dear to business? Of the 573 position papers published online by BusinessEurope (November 2021) that have unambiguously assigned topics, 151 refer to better regulation, 110 to social issues, 103 to the corporate and legal field, 75 to trade and 69 to economy and finance. Not all of the 110 position papers refer to social policies proper, though. Only 67 papers deal with labour markets and social policy, diversity and equal opportunities, gender equality, social policies and social protection, working conditions, education training and skills. The rest relate to topics such as industrial relations and social corporate responsibility.

As for the logic of influence, two conflicting developments can be singled out. On the one hand, several obstacles exist in the way of developing genuine collective bargaining at the European level. The absence of a highly developed state protagonist (Traxler, 1996) explains why Europeanization in industrial relations has added social dialogue levels and actors, but not replaced the national level. While in the 1990s, cross-sectoral social dialogue scored important legislative results, only voluntary framework agreements were hammered out afterwards. EEOs seem to be reluctant to engage in cross-sectoral social dialogue, owing both to their aversion to binding new regulations (Aranea et al., 2021) and to the fact that forging such agreements is a daunting enterprise due to the many interests to be reconciled (Keune and Marginson, 2013). To a certain extent, such weak regulatory capacity characterizes European sectoral social dialogue as well (Léonard, 2008).

On the other hand, despite the supporting or shared competence conferred on the EU by the Treaties in social policy, the activism of the European Commission has been on the rise since the global financial crisis (see Corti, 2022). If regulatory outcomes may be expected, lobbying has become the de facto obliged route to influence legislation for EEOs. Traxler (2004) already noted such reorientation of employers’ organizations at the national level. Recent literature has reprised and deepened the argument. Demougin et al. (2019) posit that the decline in trade union power and lower collective bargaining coverage have resulted in expanded political representation and lobbying efforts by employers’ organizations, with the aim of influencing labour and employment legislation. Within such transformation, the state is not a passive bystander. Rather it plays the role, according to Busemeyer et al. (2022), of orchestrator through the deployment of ideational and institutional resources aimed to mobilize intermediary actors, including employers’ organizations, on a voluntary basis in pursuit of joint government goals.

The similarities with the supranational level are nontrivial. Lobbying in the EU is marked by an exchange logic, where interest groups provide ‘information to decision-makers in exchange for legitimate access to the EU policy-making process and hence the opportunity to impact legislative outcomes and future policy developments in their favour’ (Dialer and Richter, 2019: 2). Position papers and joint declarations fulfil this dual role: they are both aimed at providing expert knowledge as well as at trying to influence future legislation. The act of lobbying, instead, happens through different channels and at different times: for EEOs it mainly boils down to consultations with the European Commission, meetings with its staff and participation in its expert groups. Lobbying the European Parliament is, instead, relatively less widespread (Aranea et al., 2021).

Preference operationalization

In a seminal study, Mares (2003) conceptualized four ideal types of employers’ preferences for social policies: (i) no social policy – employers are not interested in any form of social coverage; (ii) private social policy – employers opt for occupational welfare as the answer to social needs, which means leaving to companies and, eventually, social partners the choice to develop social programmes; (iii) contributory social policy – employers accept social policies financed by compulsory social contributions; (iv) universalistic social policy – employers agree to general taxation financing.

The four preference ideal types not only represent different costs for firms but also generate different redistributive and social dialogue effects. They are influenced by the characteristics of the enterprise, such as the type of labour force sought after, size and exposure to social risks (Mares, 2003). Consequently, the formation of collective preferences and, later, policy positions, happens through negotiation within the different business factions and political exchange with trade unions and governments.

While the typology above still holds today, the politics of social policy have changed in the new millennium in three respects (Bonoli and Natali, 2012). First, post-industrial workforce transformation has led to more evident divisions between sectors, occupations and skills (Beramendi et al., 2015: 3). Second, social policy reforms have proven to be difficult and consistent with redistributive conflicts between social groups. Third, new social risks have emerged, ranging from reconciliation needs for working parents to various forms of human capital investment. These generate trade-offs with respect to old social risks, such as unemployment and income maintenance (Colombo et al., 2022).

Hence, whereas Mares’s ideal types still wield explanatory power, two further issues need to be considered (Beramendi et al., 2015). The first is about the orientation of welfare reforms from consumption- to investment-oriented social policies. The former insure against the loss of income, either due to old age (pensions), skill redundancy (unemployment insurance) or illness (disability benefits and sick leave, medical diagnostics and therapy). The latter prepare people to participate in the labour market, via policies such as education, childcare, labour market activation, research and development and public infrastructure. The second issue to consider has to do with different policy reform goals and the access to welfare, depending on the individual’s position and income in the labour market (marketization) as well as the type of contract or economic sector workers belong to (segmentation).

The typologies can be integrated into a single analytical framework consisting of four dimensions (Colombo et al., 2022). The first dimension measures welfare effort, that is, whether employers’ organizations favour increased spending or cost containment. The second dimension is about the roles of the state and the market in welfare provision, that is, whether social risks shall be addressed through public or private social policies. The third dimension draws welfare boundaries in terms of solidarity. Social policies may be universalistic, often financed through general taxation, or occupational, traditionally financed through social contributions. The fourth dimension addresses the logic of intervention: social policy may protect against risks (social protection) or prevent them through investment in human capital (social investment). The four dimensions overlap and interact. For instance, cost containment in pensions often coexists with increased spending on social investment, such as VET.

Finally, studying a multilevel setting, a further European integration dimension has to be added. Several party competition studies (Hix and Lord, 1997; Kriesi et al., 2012) have posited that the potential of Europeanization structuring party competition depends on the extent to which policy preferences on EU integration are orthogonal to the dominant left-right dimension. Such orthogonality has been then analyzed by Otjes and Katsanidou (2017), who have shown that a cultural European dimension (mainly pro- and against immigration) prevails in Northern European countries and an economic European dimension in Southern Europe. The latter largely overlaps with the left-right, against- and pro-austerity axis.

Instead of collapsing the cultural and economic aspects of Europeanization in social policy on a one-dimensional space of less to more sovereignty ceded to Brussels, both dimensions can be identified with regards to the EEOs’ attitude to EU integration. EEOs may favour or oppose supranational regulatory solutions either ‘economically’, that is, supranational rules may add or reduce costs for the employers themselves; or ‘culturally’, that is, EU-wide harmonization may infringe on their national members’ autonomy (or not). Thus, we individuate two specifically European dimensions: i) welfare regulation – the EU resorts either to hard or soft law to dictate or rather monitor and supervise national social policies. The regulation dimension mostly involves legal considerations on behalf of EEOs on whether the EU has sufficient competence in a determinate social policy area to justify the introduction of hard legislation; ii) welfare harmonization – ranging from a one-size-fits-all approach to perfect subsidiarity. Here, EEOs listen to their national members, which have preferences on the optimal degree of upward convergence achievable through EU legislation. Such consultations entail checks on whether the impact assessments accompanying the proposed laws have not been biased towards a preferred policy solution and whether they include analyses of alternatives as well. The two dimensions, again, partly overlap as issues of competence and subsidiarity are never entirely separated. Alongside the results for position papers (the analysis appears towards the end of the article), Table 1 presents the six dimensions, including their opposite extremes.

Table 1.

Employers organizations’ preferences according to the opposite extremes.

		Opposite extremes	Coded text passages in absolute and percentage values (N = 132)
National dimensions	Welfare effort	Cost containment	18 (15%)
	Welfare effort	Increased spending	1 (1%)
	Welfare boundaries	Occupational	5 (4%)
	Welfare boundaries	Universal	—
	Welfare provision	Private	9 (7%)
	Welfare provision	Public	—
	Welfare orientation	Social investment	38 (31%)
	Welfare orientation	Social protection	4 (3%)
European dimensions	Welfare regulation	Hard law	3 (2%)
	Welfare regulation	Soft law	24 (18%)
	Welfare harmonization	One-size-fits-all	—
	Welfare harmonization	Subsidiarity	30 (23%)

Notes: N = number of coded text passages in position papers.

Methods and data

A total of 94 documents were analyzed: 75 position papers (PPs) and 19 joint declarations (JDs), which are listed in Table A.1 in the Appendix. Again showing its primus inter pares status, 47 position papers were authored by BusinessEurope (PP1–PP47), followed by SGI Europe (PP48–PP61) and SMEunited (PP62–PP75), which authored 14 position papers each. As for joint declarations (JD1–JD19), while 13 of them were co-authored by the EEOs (also sectoral) in the context of the consultations with European social partners, 6 were published together with the unions (mainly the European Trade Union Confederation). The analysis covers the period from 2012 to 2022.¹ Text data have been examined through qualitative content analysis using NVivo. The units of coding consist of documents, followed later by text passages (sentences or paragraphs) (Schreier, 2012).

A three-step coding process was undertaken. In the first step, we analyzed both position papers and joint declarations. In steps two and three, we have instead considered position papers only. In fact, the latter better reflect the employers’ genuine preferences. In principle, joint declarations contain the strategic preferences of EU employers. Yet, we cannot infer them since the negotiating process (between the employers and/or the unions) leading to the final text has not been the object of this research. However, the differences in the content of position papers and joint declarations are significant and are highlighted in the discussion of the findings. The analysis proceeded as follows.

First, the 94 documents were coded according to the policy sectors they refer to (pensions, VET, labour market and work–family reconciliation). Second, 124 text passages were coded according to the key themes for each policy sector, which we identified inductively. Contextually, employers’ support or opposition to the most discussed initiatives (e.g. the European Pillar of Social Rights) has been extracted (Table A.3 in the Appendix). Third, in order to assess employers’ preferences, 132 text passages were coded according to the six analytical dimensions in Table 1.

To increase the reliability of the findings, we triangulated documents with interview data. Four semi-structured interviews were conducted between February and July 2022 (Table A.2 in the Appendix). Interviewees were selected through snowball sampling and include representatives from the three EU employers’ organizations and from the European Commission. Interview questions were open-ended and adjusted to the interviewees’ profile.

Empirical analysis

Policy sectors

Several reasons inform the choice of policy sectors. First, no less than 60% of social expenditure in each Member State is attributable to the four policies (pensions are the largest item). Second, they both cover ‘old’ (pensions and unemployment) and ‘new’ social risks (reconciliation, labour market activation and youth transition to the labour market) (Bonoli, 2005), in addition to embodying a ‘social investment’ approach (skills formation, support for disadvantaged groups, etc.). Third, these policies cover issues ranging from labour market functioning (unemployment benefits and ALMPs), to social needs (family policies) and school-to-work transition (VET). Fourth, from an employers’ perspective, they represent both an economic cost and an opportunity to increase competitiveness.

As shown in Figure 1, work-related issues dominate over welfare policies. Almost nine-tenths of all documents discuss the labour market (81 out of 94), followed by more than two-fifths dealing with VET (37), one-fifth focussing on pension policy (18), and circa one-sixth on work–family reconciliation (13). In the remainder of the section, the key themes for each policy sector are presented.

Figure 1.

Presence of policy sectors in the documents (% of total). Notes: N = number of documents.

Labour market policy

Key labour market policy themes mainly refer to flexibility and flexicurity (10 out of 47 coded text passages), ALMPs and youth unemployment (6 each), demand for medium-highly skilled people, including in science, technology, engineering and mathematics (STEM), minimum wages and workers’ mobility (5 each). Other themes include the gender pay gap, labour shortages, minimum income, short-time working schemes and the need to reduce the tax wedge. Comparing the EEOs, labour market issues are less present in SGI Europe’s position papers, most likely due to the (partly) public nature of employment, which has undergone less dramatic changes than work in the private sector.

EEOs are serious about flexicurity, a concept that is still prominent in European official discourse (Bekker, 2018), that lies at the base of open, mobile and dynamic labour markets (PP22). The employers’ aim is to put internal (within the firm) and external flexibility (job-to-job transitions) of employees on an equal footing and create a level playing field through a European framework for labour market reform based on common flexicurity principles (JD5). Special emphasis is put on complementing passive labour market policies, such us unemployment insurance, by increasing the performance of ALMPs through greater participation of employers, in order to: i) facilitate transitions between jobs and sectors and ii) integrate the long-term unemployed in the labour force (PP13; PP19). BusinessEurope and SMEunited (INT4 and INT2) agree that labour market participation should be frictionless and is clearly the preferred option vis-à-vis inactivity, thereby minimizing moral hazard (see Barr, 2020).

Among the four policy areas, subsidiarity concerns featured most prominently in the labour market. The employers bitterly criticized the proposed Minimum Wage Directive (e.g. PP37), what some authors call a paradigm shift in social Europe (Schulten and Müller, 2021). Too prescriptive solutions would usurp the social partners’ right to autonomously set wages (especially in the Nordic countries), thereby infringing the freedoms of association and collective bargaining. Similarly, EEOs questioned the need for more red tape with regards to the European Labour Authority (ELA), established in 2019 (e.g. PP24; PP54), and the 2018 reform of the Posting of Workers Directive (PP15). In particular, employers claimed that imposing an EU system of joint and several liability for minimum wages, social security contributions and taxes for posted workers would entail high costs for companies (see Corti, 2022). Activation measures, such as the Youth Guarantee, aimed to improve public employment services for young people, were instead met with greater favour (PP8).

Vocational education and training

The most discussed themes in VET relate to meeting the employers’ skills needs (18 out of 42 coded text passages), the role played by apprenticeships and traineeships (11) and the importance of acquiring digital and STEM skills (7). Other topics include digital learning platforms and the status of trainees. The importance of VET policies is confirmed by accounts of sectoral dialogue (Bechter et al., 2021) and interview data: ‘anything related to education and training, especially vocational education and training to successfully deliver […] green and digital skills […] is a key priority’ (INT3). According to BusinessEurope (INT4), employers shoulder some 90% of training costs in Europe; hence, their legitimate concerns are i) growing skills mismatches and labour force shortages; ii) weak partnerships between education providers and employers; and iii) limited labour market relevance of VET (JD12; PP3; PP30). Given the potential that digitalization has to increase competitiveness (particularly for SMEs), the need to close the skills gap through lifelong learning and VET is particularly important in the IT sector (JD13).

Several European initiatives on VET, for example, the 2013 European Alliance for Apprenticeships and the European Skills Agenda (linked to the EPSR), have been positively met by EEOs (PP12; PP46). In other cases, subsidiarity concerns prevailed. The Council’s 2014 Recommendation on a Quality Framework for Traineeships was deemed too prescriptive, in that minimum requirements for traineeships should better reflect national priorities (see Busemeyer and Trampusch, 2012). Similarly, attaining lifelong learning objectives through the setup of individual learning accounts, that is, virtual individual accounts in which training rights are accumulated over time, was also seen as too coercive and difficult to implement for SMEs (INT2).

Pension policy

As far as pension policy is concerned, EEOs have mostly discussed the need to promote occupational pensions (6 out of 18 coded text passages), to facilitate longer working lives (5) and ensure sustainability and adequacy (4), which are all priorities shared with the European Commission and its mission to modernize pensions through the European Semester (Guardiancich et al., 2022).

EEOs consider longer working lives as the antidote to unsustainable and inadequate pensions in a context of increasing life expectancy (PP1). Yet, this requires both the reform of statutory pensions at Member State level as well as companies adapting their work organization and skills to accommodate older workers (PP1). Moreover, EEOs promote occupational pensions (PP9), due to direct involvement in their management and the substantial state subsidies involved (Natali, 2018). SME United is the exception here: none of its position papers mentions pensions, which is in line with Mares (2001), who posits that lower control, for example, on occupational pensions, implies that there may be equal support for state-led (contributory or universalistic) solutions.

A specific piece of legislation, that is, the revision of the 2003 Institutions for Occupational Retirement Provision (IORP) Directive, elicited major protests by employers (PP9; PP36). The application of a harmonized solvency standard for IORPs, that is, Solvency II, a standard developed for insurance companies, was considered too prescriptive and costly (Guardiancich and Natali, 2017). The provision was ultimately dropped from the IORP II Directive’s final text.

Work–family reconciliation policy

Key themes in the field of work–family reconciliation policy have mainly revolved around the importance of improving facilities for children and older people (8 out of 17 coded text passages) and increasing the participation of women in the labour market (6). In some instances, it has been highlighted how the increase of employee rights could create new costs (3). EEOs have therefore emphasized the importance of investing in infrastructure for childcare, caring for the elderly and the disabled. These services ‘should be made more efficient in terms of affordability, opening hours and quality of services provided’ (JD11).

As EEOs believe that care services are key to ensure a higher participation of women in the labour market, without, crucially, reducing the employment rate of men (PP22, PP28), they implicitly aim for a gradual convergence towards defamilialized welfare (see Saraceno and Keck, 2011). Yet, EEOs also believe that the current EU legislative frameworks in the fields of work–life balance and gender equality are sufficiently robust and that an increase in employee rights would create new direct or indirect costs for companies, encouraging more parents and carers, men and women, to not work (PP14; PP20; PP38).

Welfare dimensions

In terms of the opposite extremes, the European and national dimensions are treated separately. Table 1 shows that within a multilevel setting fraught with cleavages between and within EEOs, the logic of membership prevails. EEOs are clearly against binding regulation and, when this is unpreventable, they push for the maximum degree of subsidiarity. In line with the power resources theory, the aims are to avoid additional costs, guarantee the greatest degree of autonomy to national social partners and respect different social policy and industrial relation traditions in the Member States. All three objectives were plainly stated with respect to the European Pillar of Social Rights, a meta-strategy covering different social policies launched in 2017 during the Juncker Commission. Despite being the initiative relatively toothless (Vesan et al., 2021), the employers criticized its one-size-fits-all approach to diverse European social policy traditions, emphasized that new social rights may increase non-wage labour costs and pointed out that instead of generating new social laws, the ones in place should be correctly implemented (PP16; PP22; PP39).

Yet, as shown above, such aversion to regulation is not unqualified. The logic of influence dictates that acceptable solutions need to be hammered out when existing legislation just needs to be amended (the Posting of Workers Directive, the IORP Directive), when the Commission has greater competence due to the cross-border character of social policies (e.g. the Supplementary Pension Rights Directive, see Guardiancich, 2016), when EU-level solutions are seen as beneficial (the European Skills Agenda, the Youth Guarantee). In all these cases, position papers criticized parts of the proposed regulations, but did not push for outright subsidiarity or no regulation at all.

With regards, instead, to national welfare dimensions, EEOs seem to strongly prefer social investment over social protection in welfare orientation and cost containment over increased spending in welfare effort. Weaker preferences are accorded to private over public welfare provision and to occupational over universal welfare boundaries.

Most of the analyzed position papers promote social investment: ALMPs as a key feature of flexicurity and the provision of marketable skills through efficient VET are not only key themes in the respective policy sectors, but they are also accorded greater attention than classical social protection schemes, such as old-age pensions and unemployment insurance. Mixed policies are also viewed through a social investment prism: the chief aim of, for example, work–family reconciliation is to improve the employability of women by unburdening them from care responsibilities.

Cost containment refers mainly to the need to reform statutory pension systems, which should ensure sustainability through the promotion of longer working lives. The leitmotiv is that financial resources for social protection schemes should be spent productively (PP5). Notwithstanding, EEOs are slightly at odds regarding their attitudes towards public spending on welfare and the needs of global competitiveness, mirroring the globalization-welfare state nexus debate (Meinhard and Potrafke, 2012). BusinessEurope is strongly preoccupied about global competitiveness as non-wage labour costs are highest in Europe, which may lead to ‘a comparative disadvantage compared to companies in other advanced economies and globally that have less of such costs’ (INT4). Due to its reliance on public spending, SGI Europe espouses instead the compensation thesis, squarely stating that publicly financed social protection and short-term working schemes have helped the survival of European economies during the COVID-19 crisis (INT3).

A qualified preference accorded to private over public welfare can be inferred from the importance EEOs place on public–private partnerships, both in policies promoting social investment, such as work–family reconciliation (PP20) and in social protection. BusinessEurope explains this point clearly (PP5): ‘social protection systems have to deliver more with less or stable resources […] businesses broadly welcome the focus on the social investment function of welfare systems. Closer cooperation between the public and private sectors can contribute to a better use of public resources in the delivery of social policies, in particular through Public Private Partnerships’.

Finally, some EEOs expressed a weak preference for occupational/private over universal/public income maintenance solutions: ‘Member States should facilitate subscribing to higher protection levels on a flexible and voluntary basis’ (PP40), especially regarding complementary pensions. BusinessEurope remarked that in times of strong labour demand and high levels of shortages of labour and skills, which perdure at the time of writing, one way forward is to develop in-work benefits, which allow for reallocations and, possibly, savings (INT4).

A final corollary is worth mentioning. As anticipated above, the differences between employers’ genuine and strategic preferences are not knowable because the negotiations leading to joint declarations were not addressed in this research. Yet, some notable discrepancies between position papers and joint declarations do emerge. In particular, divergence is more marked not between what the two types of documents say, but rather between what the position papers contain and the joint declarations do not. Prime examples are statements that link strengthened rights for employees to greater non-wage labour costs, favour a higher statutory retirement age and oppose the equalization between the statuses of trainees and workers. Such differences at least partly confirm that employers’ positions too distant from labour are expunged from joint declarations.

Conclusions

Despite the increasing salience of EU-level policymaking, the literature on the welfare preferences of organized business has somewhat neglected its supranational dimension, at times depicting the actions of EEOs as focussed only on preventing binding regulations from being adopted (see Aranea et al., 2021). This paper qualifies such a narrative by studying in detail the social policy preferences of three major EU employers’ organizations, of which BusinessEurope is by far the most powerful.

Analytically, the article has constructed a ‘welfare space’ consisting of four national (welfare effort, boundaries, provision and orientation) and two European dimensions (welfare regulation and harmonization), spanning between opposite extremes. Empirically, the article has analyzed a substantial number of position papers and joint declarations by EEOs dealing with active and passive labour market policies, pensions, VET and work–family reconciliation.

The power resources theory tells us that, mainly due to cost and competitiveness concerns, employers are, at best, reluctant consenters to social policy expansion, leaning towards cost containment in welfare effort. Yet, as they strongly prefer social investment in welfare orientation they also act as protagonists, perhaps less than recent national examples show, possibly due to different welfare policy competences at the supranational and domestic levels. Consequently, in EEOs’ position papers, social protection (retirement and unemployment insurance) trails behind social investment (ALMPs and VET) and mixed policies (work–family reconciliation). BusinessEurope, in particular, is rather adamant about increasing flexibility in tight labour markets: the provision of in-work benefits, the promotion of longer working lives, and occupational pensions, and the need for care facilities to improve the employability of women show that global competitiveness is a major concern. Few exceptions buck the trend: due to its reliance on tax financing, SGI Europe favours public spending also on social protection, while SMEunited finds a number of social investment solutions as too cumbersome for their nimble members.

Above and beyond their preferences over different social policy characteristics, EEOs act as intermediaries between national employers’ organizations and EU-level political or corporatist interlocutors, thus jostling between the membership and influence logics that drive their actions. On the one hand, greater internationalization and a widening EU have increased the structural differences between their members’ interests, which necessarily generated a widespread aversion against hard law in welfare regulation and, failing that, against one-size-fits-all solutions in welfare harmonization. On the other hand, the European Commission has stepped up its involvement in social policy after the sovereign debt crisis, thereby requiring robust interaction on behalf of EEOs. Lobbying efforts to influence existing legislation that needs to be amended, social policies having a cross-border dimension and welfare issues that are better tackled at the EU-level simply cannot be neglected. From this viewpoint, the logic underpinning employers’ lobbying at the EU level, whereby position papers are exchanged for access to policymaking, dovetails with the emergence of state orchestration at the national level, whereby ‘[s]tate actors make use of intermediaries to get access to expertise and specialized knowledge about pressing issues and to get legitimacy for policy choices and their effective implementation’ (Busemeyer et al., 2022: 236).

A potentially vast research agenda may stem from the aspects that this article could not exhaustively address. First, by focussing on just three major EEOs, the article neglects the wider sectoral social dialogue. Of course, the research design should change substantially as sectoral EEOs deal with more tangible and more focussed (social) policy issues. Second, the research identifies the genuine preferences of EEOs in various social policy domains, but it does not uncover how these are aggregated. To this end, the application of different theoretical frameworks, such as factions of capital and varieties of capitalism, to the study of EEOs would require the investigation of their internal bargaining over policy positions and how they evolve over time. Third and finally, studying the negotiations of joint declarations is also a worthy enterprise, as it would yield important information on the strategic preferences of employers’ organizations and other social partners at the European level.

Footnotes

Acknowledgements

Earlier versions of this article were presented at the XV Espanet Italia Conference, University of Bari, Italy (1–3 September 2022) and the 11th Biennial Conference of the ECPR Standing Group on the European Union, Luiss University, Rome, Italy (8–10 June 2022). We gratefully acknowledge the helpful suggestions made by the participants. We would also like to thank Emmanuele Pavolini, the editors and the two anonymous reviewers for their valuable comments.

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Funding

The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The work was supported by European Commission, (VP/2019/004/0008).

ORCID iDs

Igor Guardiancich

Andrea Terlizzi

Note

Table A.1.

List of position papers and joint declarations

Position papers
Title	Year	Identifier
BusinessEurope
White paper on pensions	2012	PP1
Enforcement of the Posting of Workers Directive	2012	PP2
Rethinking education	2013	PP3
Moving youth into employment	2013	PP4
Social investment package	2013	PP5
Quality framework for traineeships	2014	PP6
European area of skills and qualifications	2014	PP7
Youth guarantee	2014	PP8
Proposal for revision of IORP Directive	2014	PP9
Statement on workers' mobility	2015	PP10
Addressing the gender pay gap	2015	PP11
The European Alliance for Apprenticeships	2015	PP12
Labour market integration	2015	PP13
Addressing the challenges of work–life balance	2015	PP14
Revision of the posting of workers directive	2016	PP15
European Pillar of Social Rights	2016	PP16
New skills agenda for Europe	2016	PP17
Revision of social security coordination regulation	2017	PP18
Active Labour Market Policies	2017	PP19
Work–Life Balance for Working Parents and Carers	2017	PP20
Access to social protection	2017	PP21
European Pillar of Social Rights	2017	PP22
Access to social protection	2018	PP23
European Labour Authority	2018	PP24
European Framework for Quality and Effective Apprenticeships	2018	PP25
Council recommendation on access to social protection	2018	PP26
European Labour Authority	2018	PP27
EU Action Plan on tackling the gender pay gap	2018	PP28
The role and importance of science, technology, engineering and mathematics (STEM) skills	2018	PP29
Future of EU Vocational Education and Training Policy	2018	PP30
Key issues to strengthen gender equality	2019	PP31
Fair minimum wages	2020a	PP32
Fair minimum wages	2020b	PP33
EU Skills and Youth Package	2020	PP34
Priorities for reforms to vocational education and training systems	2020	PP35
Reforming active labour market policies in turbulent times	2020	PP36
EU Directive on fair minimum wages	2020	PP37
Adapting social protection systems to demographic change	2021	PP38
Possible action addressing the challenges related to working conditions in platform work	2021	PP39
Improving working conditions of platform workers	2021	PP40
Minimum income in the EU-27	2022	PP41
Labour force and skills shortages	2022	PP42
Access to training for people in diverse forms of work	2022	PP43
Access to training for people that are in-active and unemployed	2022	PP44
EU Skills and Talent Package	2022	PP45
Improving working conditions in platform work	2022a	PP46
Improving working conditions in platform work	2022b	PP47
SGI Europe
Quality Framework for Traineeships	2014	PP48
IORP II	2014	PP49
IORP II	2016	PP50
Gender equality	2016	PP51
European Pillar of Social Rights	2016	PP52
A shared vision for quality and effective apprenticeships and work-based learning	2016	PP53
European Labour Authority	2018	PP54
Action Plan for the Pillar of Social Rights	2020	PP55
Skills agenda for Europe	2020	PP56
Response to the open consultation on the Minimum Wage Directive Proposal	2020	PP57
Response to the public consultation on green paper on ageing	2021	PP58
Amendments to the minimum wage proposal	2021	PP59
Platform work	2021	PP60
Working conditions in platform work	2021	PP61
SMEunited
Access to social protection	2018	PP62
European Framework for Quality and Effective Apprenticeships	2018	PP63
European Labour Authority	2018	PP64
Access to social protection	2018	PP65
Future of vocational education and training post 2020	2018	PP66
Fair minimum wages	2020	PP67
VET	2020	PP68
European skills agenda	2020	PP69
Action addressing the challenges related to fair minimum wages	2020	PP70
Reinforcing the youth guarantee	2020	PP71
Action Plan for the implementation of the European Pillar of Social Rights	2020	PP72
Directive on adequate minimum wages in the EU	2021	PP73
Working conditions in platform work	2021	PP74
Working conditions in platform work	2022	PP75
Joint declarations
European Social Partners - Declaration on the European Alliance for Apprenticeships	2013	JD1
European Social Partners - Framework of Action of Youth Unemployment	2013	JD2
Employers' views on Annual Growth Survey	2015	JD3
Employers’ views on European Commission initiative on the long-term unemployed	2015	JD4
Employers' views on Annual Growth Survey	2016	JD5
Euro-Mediterranean Social Partners - Declaration on Social Dialogue	2016	JD6
European Social Partners - Towards a Shared Vision of Apprenticeships Joint statement	2016	JD7
Employers' key messages - more competitiveness to sustain the social dimension of Europe	2017	JD8
Employers' views on Annual Growth Survey	2017	JD9
European Social Partners - Joint statement on the occasion of Gothenburg summit	2017	JD10
Employers' views on Annual Growth Survey	2018	JD11
Employers' statement - reducing labour shortages by improving skills matching	2019	JD12
Employers' views on Annual Growth Survey	2019	JD13
Employers' views on Annual Growth Survey	2020	JD14
European Employers - Statement on the conditions for return to employment, job creation and better skills matching	2020	JD15
European Social Partner - Joint statement on childcare provisions in the EU	2020	JD16
European Employers - Statement on a future EU initiative aiming to improve training provision across Europe	2021	JD17
European Employers - Statement on pension adequacy report	2021	JD18
Employers' views on Annual Growth Survey	2022	JD19

Table A.2.

List of interviews.

DG Employment	16.02.2022	INT1
SMEunited	13.07.2022	INT2
SGI Europe	15.07.2022	INT3
BusinessEurope	12.07.2022	INT4

Table A.3.

Support/opposition to specific provisions.

Provision/initiative	No. of documents	Position	Example of concerns
Action Plan of the European Pillar of Social Rights (2021)	2	++	It is of utmost importance that the actions adopted at EU level do not put unnecessary and disproportionate burdens and costs
Council recommendation on access to social protection (2018)	1	+ +	Overly prescriptive and could interfere with the functioning of social protection schemes at national level
Council recommendation on access to social protection for workers and the self-employed (2018)	1	+	Strong concerns with the mandatory approach to nearly all branches of social protection
Council recommendation on reinforcing the youth guarantee (2020)	1	+	Member States should keep the possibility to decide on the age range better suited to their national policies
Council recommendation on vocational education and training (2020)	1	+ + +
EU Action Plan on tackling the gender pay gap (2017)	1	+	Deep concerns about the reopening of the Recast Directive on gender equality
EU Directive on adequate minimum wage	5	--	The choice of the legal basis does not respect the subsidiarity principle. Moreover, the unclarity of the form and content of the text will give rise to court casesWe strongly warned against an EU directive as the wrong instrument. A directive by definition hands over power to the legislator and to the courts, not to the social partnersThe proposal on minimum wages is completely against the letter and spirit of the EU treaty on pay and collective bargainingThe proposal also goes against the well-recognised principle of freedom of association enshrined in the ILODifferent proposals included in the directive will harm statutory minimum wage systems and collective agreementsThe Commission wrongly supposes that the directive will ‘reinforce trust among Member States and social partners’. In fact, it will do the oppositeA directive on minimum wages is particularly damaging now, as our economies and societies are confronted with the unprecedented challenge of COVID-19
EU Directive on platform work (2022)	8	+	We agree that there is a need for action at the appropriate levels, to address the challenges related to working conditions in platform workIt would not be appropriate to introduce one-size-fits-all rules to try to deal with issues which may occur in some specific contextsWe did not call for a directive as the suitable instrument to deal with this issue in the first place. But we understand that this instrument chosen by the European Commission is now the basis for the legislative debateThe criteria introduced in the directive should remain non-binding and act as a guidance to Member StatesIt is crucial that the definition of the status of the people that perform work on digital platforms –and whether they are to be seen as employees or self-employed – remains at the national level in the hands of Member States, national social partners or national courtsThis diversity of platforms and of platform work goes against a ‘one-size-fits-all’ approach at EU level for the definition of the status of people performing work on digital platforms either as self-employed or employees
EU Skills and Youth Package (2020)	1	+ +	It is important that the youth guarantee is integrated with other activation measures and support services
European Alliance for Apprenticeships (2013)	2	+ +	Strengthen the link with relevant national efforts
European Framework for Quality and Effective Apprenticeships (2017)	2	+ + +
European Labour Authority (2018)	3	--	Doubts about the added value of the proposed authority
European Pillar of Social Rights (2017)	7	+	The sole focus on ‘social rights’ is not the right approachThe pillar should pave the way for the design of benchmarksNational social protection systems and rules on access and contributions are diverse. This should be better acknowledgedIntroducing new obligations risks making certain employment forms and self-employment less attractive for workers and employersIs not necessarily for the Pillar to produce new EU social legislation but to make sure that the existing one is still fit for purpose
European Skills Agenda (2020)	1	+ + +
Revision of IORP Directive (2014)	4	+	The approach of the commission regarding occupational pensions will not further support their provision within the overall pension system of Member States, quite on the contraryWe have strong concerns that the specific characteristics of occupational pensions provided by pension funds are neglected in the proposalsSeveral elements in the present IORP II directive might contradict an important goal of the EU which is to facilitate the development of complementary private retirement savings schemes
New Skills Agenda for Europe (2016)	1	+ + +
Revision of Posting of Workers Directive (2012 and 2016)	2	--	Instead of making it easier for companies and workers to access opportunities offered by the single market, the proposed Directive will increase bureaucracyImposing an EU system of joint and several liability for minimum wages, social security contributions and taxes would entail high costs for companiesThe provisions of the Posting of Workers Directive (96/71/EC) remain valid and there is no need to revise the DirectiveThe existing Posting Directive provides a fair and level playing fieldThe Commission’s proposal is an attack on the single marketThe imposition of joint and several liability scheme in subcontracting at EU level is not justified by evidence. Such a scheme would entail high costs for companies, especially SMEs, and would act as a barrier in the single market, while not bringing benefits for posted workers. We thus urge the European Council and the European Parliament to delete Article 12
Quality Framework of Traineeships (2014)	2	+	A too detailed proposal at the EU level regarding the specific form, dispositions and conditions a traineeship agreement should have might have detrimental effectsA more comprehensive approach regarding the reasonable duration of traineeships is needed. The closed approach chosen by the Commission regarding this issue is regrettableThere are already structures and regulations in place for the governance of traineeships at the national level and, therefore, no additional EU guidance is neededMinimum requirements for traineeships should not be set at the European level
Social Investment Package (2013)	1	+ + +
Revision of social security coordination regulation (2017)	1	+ +	Concerns regarding elements on unemployment benefits and posting of workers, where some changes to the proposals are needed
Youth Employment Initiative (2013)	1	+ +	While we believe that the youth guarantee can act as a vehicle for national reforms, it should not be seen as a structural reform in itself
Support = + + +Support but changes are needed = + +Support but significant changes are needed = +Opposition = --

Author biographies

Igor Guardiancich is an Assistant Professor at the Department of Political Science, Law, and International Studies, Università degli studi di Padova.

Andrea Terlizzi is a Postdoctoral Researcher at the Sant’Anna School of Advanced Studies in Pisa and Researcher at the Department of Public Policy and Governance of the Italian National School of Administration in Rome. Andrea’s main research interests include public and social policy, public administration and management, policy process theory and methods, and critical policy studies.

David Natali is Professor of EU and Comparative Politics at the Sant'Anna School of Advanced Studies in Pisa, Temporary Professor at the Italian National School of Administration in Rome for the European Cohesion Policy and Research Associate at the European Social Observatory in Brussels.

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