“No matter where in the world or in which sector, the crisis is having a dramatic impact on the world’s workforce”
–International Labour Organisation document, April 2020
The International Labour Organisation document cited in the opening paragraph alludes to the unfolding impact of the coronavirus pandemic on the economy and society worldwide. The ugly scenario is buttressed by recent news coming out of the United States depicting what has been called the worst job report since the Great Depression of the early 1930s. It is estimated that close to 20 million private sector jobs will be affected in the US, while the spate of lay-offs is indicated by the recent worker retrenchment by Uber, which just shed 14% of its workforce, outdone narrowly by its closest rival, Lyft, which had sacked 17% of its work strength. Several other countries in both the developed and developing world are equally hard hit. One projection for the United Kingdom by modelling technocrats informs that over one-fifth of labour in that country is unlikely to survive the pandemic downturn. In what has been described as a pandemic of hunger, a challenge to existence is overlaid by, or competing with another existential threat to the livelihood of workers.
Nigeria, which was already in a sense, on the brink of another recession before the health emergency, is clearly in the throes of economic and social crises symptomised by pay cuts of between 20% and 50%, as well as retrenchment blues. Earlier this week, the Central Bank of Nigeria averted, at least for now, a looming mass sack across the banking industry. As the lender of last resort, the Central Bank could do this because commercial banks are required to clear such issues with the regulator. What is not clear, however, is whether the fiat of the apex bank suffices to resolve what, in some cases, may well be underlying structural issues. There is also the case of pay cuts affecting bank workers across the industry in the month of April. Besides, the practice, as well as outright retrenchments would appear to have been widespread in several corporate organisations, with some of them claiming to have posted severe losses because of the lockdown. For example, it was reported earlier this week that 400 members of staff were laid off in one fell swoop at the American University of Nigeria, Yola. Depending on the organisation, retrenchment of various sizes and hues would appear to be the automatic response of employers to real or exaggerated distress caused by the pandemic.
It would appear, going by economic forecasts, that many state governments may be incapacitated from paying wages to their workers from the month of June, while some others like Kogi are already openly dangling the axe of retrenchment as a way of tidying over the economic downswing. To be sure, institutions, public or private, that do not survive or introduce survival strategies early enough may go down in the anticipated recession projected to bite deep into an already fragile economy. Nonetheless, however, it is suggested that massive lay-off of workers such as occurred at the American University of Nigeria, be avoided, or at the very least, undertaken in phases in order to mitigate the suffering of workers struggling to endure the ravages unleashed by the global pandemic.
All too often, and as human resources experts never tire of pointing out, resort of employers to lay-offs and deep wage cuts never seems to translate to profitability, especially in the absence of corporate reinvention. Take for instance, the outcome of a research project whose findings were published a few years back, in the Wall Street Journal, concerning 1,000 firms in the US which had downsized through job layoffs. The study found out that only 46% of the firms actually managed to reduce expenditure with 32% realising a bulge in profit, 22% experienced increases in productivity, and 22% successfully reduced bureaucracy. Worse still, there were negative spinoffs such as public image deficits, loss of morale and fear of being sacked among the workers who survived, as well as psychological dislocation evident among survivors, and of course, those who were laid off. It is for this reason and the fact of choking up an already congested labour market that experts increasingly suggest alternatives to mass sack or where lay-offs become inevitable, investing the exercise with a human face. Corporate best practices in this area include offering workers job placements within the organisation that would throw them a lifeline, setting up counselling and mentoring sessions aimed at easing career lockdowns and the angst of adjustment, as well as, as part of corporate social responsibility, helping those affected to set up themselves in business. Others include transparency and clear public communication regarding such events and democratic decision making as far as this can go. Obviously, struggling enterprises on a shoestring may be unable to afford some of the processes and cautionary routines enumerated above; the bottom line however, is not to be oblivious of the need to balance corporate profitability with human rights and the psychological consequences of retrenchment, especially when they are done on a large scale.
The significance of the Central Bank intervention on the proposed retrenchment in the banking sector, was to teach the lesson, from a governmental point of view, that there are wider social concerns that need to be taken along before embarking on such journeys. For instance, while in any context, retrenchment and pay cuts carry with them, deleterious consequences for individual workers, in the Nigerian and African circumstances, it is even more so for a variety of reasons, cultural, social and economic. For countries and climes that have social safety nets, there is a mitigation of the impact of job losses with the corollary that where they do not exist, or are fickle, retrenched workers are out in the cold. That is even more the case where we have the double whammy of a medical and economic emergency. Connected to the discourse are such factors as the escalating inflation rate which last month reached 12.26%, the bureaucratic jungle that surrounds efforts to raise loans from our banks, the cultural symbolism and reality of retrenchments being the equivalent of a social earthquake affecting relations and dependants, as well as the practical difficulty of finding alternative jobs in a situation where many who were qualified have been in the job queue for years. Add to that list, the well-known woes of infrastructural deficits which make startups uphill undertakings and you get an idea of the magnitude and depth of the problem.
In order to avoid a basket situation which will compound an extremely vulnerable situation, it is suggested that job cuts and pay cuts be calibrated in ways that do not leave workers to their own devices and with evident show of social responsibility that can douse the fires of frustration. Of course, government cannot stop employers from implementing policies which they believe to be crucial for their survival. Nonetheless, it can restrain them from excesses and practices that can have serious consequences for human survival.
In conclusion, what is advocated in these lean times is to walk the tight rope between profitability and social practices that can keep us all afloat in the midst of multiplying challenges.
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