eBusiness Weekly
There is growing grumbling among employees in both private and public sectors, the recent strikes by junior doctors and nurses, and now reports that some in some workforces are debating the possibility of strike action.
To some extent employers have been taking their employees for granted, feeling that they should be very grateful that they have a job to start with. And if they want to leave then it would be fairly easy to have a queue of people wanting the vacancy.
We agree that levels of formal salaried employment are low in Zimbabwe, although we also need to be careful not to assume that everyone who is not on salary is unemployed. But while there are some self-employed who are earning far more than they would in a job, most self-employed, both rural and urban, are on fairly low to very low incomes, so there is some support for an attitude of: “Shut up and thank me for paying you.”
But this attitude is also self-defeating.
For a start there are far more voters who are employees than there are voters who are employers and this is an election year. If employers are way out of line then it is easy for politicians to make promises, and promises that they can keep, to tighten labour laws. It has taken Zimbabwe some time to come up with a set of labour laws that try sincerely to strike a reasonable balance between the real needs of employer and employee and while our Labour Act can always be improved, the legal changes made three years ago basically set us on a path that will neither frighten off investors nor allow workers to be exploited as semi-serfs.
Secondly in the modern economy every employer needs employees who can think for themselves, acquire and apply skills, and generally try to make themselves part of the team that pushes their employer’s business forward.
And to do this properly they need to be rewarded. Most employers, especially large ones, are sometime very nervous about staff costs and very often try and fix percentages of total costs that should be devoted to staff costs, regardless of the business. Such fixed percentages, a case of one size fits all, are a myth. A lot depends on the business. It seems obvious that in a business almost totally reliant on organising and selling skills, say writing software, staff costs are just about the only major cost and will obviously be a high percentage of total costs.
The number of businesses that use unskilled labour, or low-skilled workers, to process expensive materials is diminishing, and it is only these sort businesses that can justify a low percentage of costs allocated to staff. For everyone else staff costs will probably be a growing percentage of their business as they need ever more skills from their staff. So employers need to think carefully what sort of percentage of costs should go on labour in their particular business and not just apply a random figure on page one of the textbook.
This even goes for the Government. There are suggestions that staff cost percentages need to be reduced dramatically to free up money for “services”. But a lot depends on what sort of service. For example, the main job of an education ministry is to put a teacher in from of every 30 or 40 Zimbabwean children. This is the big service. The fact that the child should have the proper text books and the classroom should be adequately equipped cost far less than the cost of that teacher. So in that area the “services” cost is largely a staff cost.
There are obviously other areas of the Government where the main cost is a thing rather than a person. Again it simply means that someone has to carefully examine each function and calculate, rather than assume, what percentage of the costs should be staff costs.
Of course in Zimbabwe, as in many developing countries, there can be big swings in the economy and the experiences of the last two decades will make many employers every nervous about anything resembling permanent wage increases. But it is possible to have a proper bonus and profit sharing scheme in place, whereby it is not just the shareholders and big bosses who benefit when a company makes money; all staff should have a share.
And workers then need to accept that when times are bad, all might have to pull their belts tighter.
The third area where we need a fairly drastic upgrade is in resolving disputes. There are the macho types who call for strikes among employees or lockouts from employers. Neither will really solve anything. Those thinking about strikes need to realise that these only really work when there are large strike funds, that can keep workers housed and fed while they stay at home without pay. Almost any employer can starve out strikers in this country, simply because hardly anyone can go for more than a week or two without pay. The result will be a dispirited workforce admittedly.
But there are other solutions that are entering into industrial agreements in many countries, and that is compulsory arbitration. This does require a decent panel of highly competent arbiters, people with integrity and a good knowledge of business in general and the particular sector in particular, but they are not impossible to find.
An interesting advance on pure arbitration is pendulum arbitration. Here the party whose position is closest to the independent assessment wins all. For example, if the dispute is purely over a wage increase and the employer offers 4 percent, the union demands 10 percent and the arbiter reckons six percent is the right figure, then the award is 4 percent because that is the closest. But if the arbiter fixes 8 percent as fair then the award is 10 percent, because that is closer. This system very often produces a result much sooner simply because it rewards the party who is most reasonable, and places a premium on being the more reasonable. In a wage dispute this usually sees after a couple of rounds of offer and counter offer a gap of say 1 percent, which is so small that everyone agrees to split the difference.
We would like to see a far more open and informed debate between employers, unions and employees, perhaps at the level of national employment councils, where we can explore solutions that create viable businesses, attractive new investment and still offer the employees a stake in making these businesses and investments both viable and attractive.
