“After massive downsizing exercises, it is sometimes hard to tell who is less fortunate- employees who have had to leave or those who are left behind commonly termed the working wounded”.
– Juanita Simpson
Next to the saga of ever increasing arrears of salaries owed to workers by close to 30 states, is the anguish of job layoffs across the country, both obviously signs of the upsetting times. Variously described euphemistically as downsizing or rightsizing, the firing of workers across a wide spectrum of the economy has become a frightening marker of the current recession, mitigated in part by the Federal Government’s commendable policy of not sacking its employees.
The current phase of massive job cuts began with the financial institutions, especially the banks, which in June began to lay off sizeable proportions of their workers. The scale of the exercises was so alarming that the Minister for Labour and Employment, Chris Ngige, blew the whistle by threatening sanctions on the affected banks. This did not however, completely arrest the dangling axe of retrenchment or prevent it from roaming to other service sectors. Even the media were not left out, as the sacking by a national newspaper of its Managing Director, three consultants and over 40 journalists two months ago demonstrated.
As Juanita Simpson, an expert on corporate strategy, quoted at the beginning of this write-up, warned however, downsizing of the magnitude that the country is currently witnessing has serious consequences, psychological, economic and social for both the categories of people fired and those that survive. The phenomenon of layoff survivors as they are called with their well-known feelings of having narrowly escaped being axed, loss of morale, uncertainty and identification with those affected by the layoff are too well-known to require recapitulation.
To be sure, job cuts for a variety of reasons are a worldwide trend that is not about to go away. Most of the industrialised countries have had their share of this bitter pill. For example, China, one of the world’s strongest economies, is about to embark on massive labour shedding forecast to run into millions in what is projected as the biggest retrenchment programme in 20 years. But that is not the end of the story, for two affected industries, namely the coal and steel sectors, the country has budgeted the equivalent of $23bn in order to ease the woes and fallout of the exercise. In other words, China’s version of the developmental state is not one that throws its workers into the bitter cold without providing them with protective garments.
Similarly, it should be noted that the inflation rate in that country for 2016 hovers around three per cent, a far cry from the ascending double digit inflation rate that currently bedevils Nigeria. What is the implication of this? A lower rate of inflation suggests that citizens are better able to survive in austere times because the price of foodstuffs and other essential items basically remain low. A high inflation rate on the other hand, indicates that survival margins are slim and made slimmer still because of the lack of safety nets and social protection for the unemployed, the poor and the aged in Nigeria. Whether we realise it or not, the ongoing wave of retrenchment will have consequences for human survival and the prospects of economic recovery well beyond the current season.
Conventional wisdom especially among private sector operatives was to see retrenchment of workers as a quick fix to lower cost and increase profitability. In recent years however, experts especially those working in Human Resources have increasingly questioned this superficial assumption. Study after study have shown that there is no automatic relationship between job layoffs and lower cost or increased profitability. The Wall Street Journal published the outcome of a research involving 1000 firms which had carried out downsizing. The study discovered that only 46 per cent of the firms reduced expenditure, 32 per cent experienced bulges in profit while only 22 per cent increased productivity. Worse still, several companies that carried out layoffs did not survive, causing some Human Resources experts to quip, “downsize, rightsize, capsize”.
Obviously, the unrealised expectations of massive job cuts may have to do with such factors as the loss of intellectual capital and know how attendant upon firing experienced personnel, the negative image fallout of job retrenchment and the sense of insecurity bred by them, the implication of saddling those who survive with more responsibilities that they can wisely carry, as well as declining productivity arising from the feeling that any of those who survive may be the target of subsequent retrenchment programmes.
The other disturbing factor about the ongoing job layoffs is the failure in almost all cases to adhere to best practices in implementing them. In several cases, especially in the private sector, highly skilled workers who had put in over 20 years were ambushed by letters of sack boldly so designated, upon arrival in the company premises to resume the day’s work. The only concession was the payment of one-month salary in lieu of notice. This brings to mind, the Yoruba wise crack that the rod that was employed to chase out the senior wife is still very much around waiting to be used on the younger wife. It is a pity that we as a people, have refused to do things right and continuously undervalue human capital which is the prime agent of innovation, progress and development. It will be better for all, if employers of labour were to incorporate into their organisations, principles of fairness and justice in employer-employee relations which should also guide them in handling the often traumatic and wrenching exercises of labour shedding. Perhaps, here, we can take a leaf from South Africa whose labour laws are calculatedly rigid with respect to retrenchment of workers. In other words, the legal structure does not tolerate wanton and unannounced sacking of workers as ambushes.
The implication of this, is that rather than face litigation that they are almost sure to lose, employers are encouraged to seek alternatives to job layoffs. As mentioned earlier, the Federal Government by its resolute determination not to retrench workers is setting an example that should be copied widely in both the public and private sectors. For, obviously, sending thousands of Nigerians to an already saturated labour market in a country totally bereft of social safety nets is not only to worsen the unemployment crisis but to throw the crime rate into an upward spin. Economic policies must be applied in cultural specific contexts and it is clear that in our situation, job losses are like mini earthquakes that rupture the social universe of relations, dependants and a host of others. It is time therefore to hold conversations around creative ways of avoiding job retrenchment and the attendant tremors they produce.
Is it not possible for example, to experiment more with ways of blocking leaking pots in our organisations, freezing new employment for a season, implementing agreed pay cuts as well as seeking new ways of increasing revenue? At a minimum, alternatives to the current massive retrenchment should be encouraged, with sanctions meted out to those who fail to comply.
END
Be the first to comment