Cuatrecasas International Institute for Legal Strategy on Human Resources

In 2009, due to the lack of forums on strategic innovation in human resources in Spain, particularly for those social and labor matters that will shape future company development against a backdrop of constant digital transformation and globalization, the Cuatrecasas International Institute for Legal Strategy on Human Resources was established.

This innovation forum is aimed at reflecting on strategic issues relating to the development of the human resources regulatory framework, and focuses on aspects of organizational relevance in companies’ strategic policies. In carrying out its activity, the institute channels its ideas in reports, debates and proposals, seeking a balance between essential and strategic issues with immediate effects and other issues, also of a strategic nature, that are more relevant and increasing in the mid and long term, while contributing to the decision making of leading Spanish and international companies and of other labor market operators.

The institute, chaired by Salvador del Rey (partner of Cuatrecasas Labor and Employment Practice and professor of labor law and social security law) and managed by Guillermo Tena (counsel of Cuatrecasas Labor and Employment Practice), has always fomented a proactive search for innovation regarding the organization of what is and what will be a differentiating element in the competitiveness of companies: human capital.

With an international outlook and the objective to influence public debate on the strategic issues, the institute has five areas of action:

1) Reform of institutional framework of labor relations: This has three components: a) continuous assessment of the application of the labor reforms implemented in recent years, particularly from 2012, and particularly considering their application in collective bargaining and by the labor courts; b) promotion of changes in the institutional framework to correct any dysfunctions detected in those labor reforms; and c) new reforms guaranteeing a permanent adaptation of the institutional framework to the evolution of human resources and of labor relations.

2) Technological innovation; new ways of organizing work, human resources and the institutional framework: In a context in which disruptive technologies will increasingly have an important role in the organizational structures of companies, which have had their digitalization processes accelerated as a result of the effects of the COVID-19 pandemic on the business models up until now considered traditional, are observing constant technological innovation, and are already experiencing and will experience an exponential growth in the coming years, we identify three essential areas: (i) social media; (ii) additive manufacturing (3D printing); and (iii) artificial intelligence, particularly robotics. All these technologies are provoking radical changes in the organization of work, leading to important transformations in human resource policies. These transformations would require important changes in the legal framework of labor relations to ensure the efficiency and competitiveness of that organization and, thus, in companies. It is in this area where the institute focuses the TECHNOS PROJECT (2016-2021), whose primary mission is to identify the changes that new technologies are generating and will generate in corporate organizational structures, analyzing their impact on the labor market. This includes the impact on employment and on the qualifications required, and the requirements that will define how people are managed, as well as the resulting implications for the regulatory framework, both in relation to the labor market itself and to the laws governing labor relations.

3) Globalization, international strategy of human resources and transnational legal framework (international labor standards): Spanish companies have developed international expansion processes obliging them to implement global strategies in their human resource policies. This means more than only considering the different institutional frameworks of the different countries; it means also considering the internal regulatory policies of a transnational nature—international framework agreements, codes of conduct, compliance policies—and the application of international regulations that establish minimum conditions to be observed in employment contracts by all multinationals (international labor standards). This will help consolidate an international institutional framework that will increasingly define multinational companies’ transnational human resource strategies. At the institute, we are aware of the new dimension that globalization brings to the business ecosystem: we are in an era in which there is massive and global access to data that requires new business models and the creation of global markets where, traditionally, the focus was local. The new cost structure of international data-based communications and transactions generates new business opportunities, digitalizing the globalization process, which leads us to analyze its impact on people management and on the regulatory framework.

4) Demography, diversity and social changes: An essential area of action for the institute is the analysis of the impact of the demographic and social changes in current society on the business models and on people management strategies: population aging, the coexistence of different generations at organizational level, gender diversity and global mobility are realities that large companies have to handle to ensure competitiveness levels aligned with the areas mentioned earlier. Also within the previous context, and more specifically, the diversity of the workforce based on personal circumstances, such as gender and age, pose important challenges, both due to (i) the accumulation of different generations in companies, with more and more characteristics and features, particularly from the perspective of the technological culture; and (ii) the need to establish more suitable legal and social mechanisms to help the transition of older workers towards retirement, thus establishing different bridge employment possibilities depending on the varying circumstances of those workers. Equally important, and in parallel to the actions arising from the active aging of the working population, the role of women in the labor market, as well as their access to senior positions, is being reinforced. Without doubt, it is more and more evident that the diversity of the workforce has become a necessity for companies and the source of their strategic plans.

5) Environmental sustainability policies in companies and their impact on the management of human resources and labor relations: The generation of new business models and their subsequent impact on the labor market has been triggered, considerably fast and in a predictable way, by a number of megatrends that the institute has been analyzing and studying in recent years and which we indicated in the three previous points: (i) the adoption (and adaptation) of new technologies, (ii) globalization, and (iii) demographic changes. To all these factors, the institute adds a new strategic focus that will be subject of analysis due to its undeniable current and future importance for business strategies, social responsibility policies and human resource management: the impact that climate change and environmental management have on organizations in relation to ensuring sustainable, responsible and profitable business models in the mid and long term. The commitment to sustainability has become a priority for companies as a consequence of the COVID-19 pandemic, and the gradual and so necessary acceleration of measures against climate change can strengthen our economies and contribute—as a result of the ecological transition—to job creation. Consequently, this will have an impact on (i) companies’ reputations, (ii) their capacity to attract and retain talent, and (iii) the need for companies to engage in a management policy that mobilizes and creates awareness among their human capital and to promote solid social responsibility policies, leading to a correct adaptation of the regulatory framework for the benefit of the planet’s sustainability.

Although the regulatory framework has improved in recent decades, we are facing challenges arising from historical transformations that condition the activity of companies and of workers. Implementing changes in our regulatory framework requires a strategic approach not just an economic one, assessing the different options. However, it is also necessary to have the consolidated experience of human resources directors, to define the future of an efficient management. Therefore, the institute has an advisory committee, made up of the senior directors of human resources and legal departments in 49 companies, of recognized standing and experience in the different facets of social and labor relations, and whose professional performance is at the highest level of strategic development and operation.

In its 11 years of existence, and given its objective to continue leading change, the institute has established itself as a meeting point to work with businesses and other representatives to (i) identify operational strategies, (ii) promote improvements in the labor regulatory framework, and (iii) improve human resource management efficiency.