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Human Resources Outlook for 2019

Editorial Team
23/01/2019 4:42 PM

The year 2019 is here and my predictions are that there will be a lot of things happening on the human resources front. Given that most human resources issues are linked to business performance lets first look at the business side of 2019.

Although I have seen a lot of people being pessimistic about the economy in 2019. I am confident that if the painful changes we are going through are sustained and managed well we should start seeing some positive improvements by end of first quarter. However, if there are no positives by that time the government may need to start looking at the loose ends in terms of policy. I have listened to economists/analyst proffering solutions to the current challenges and I am convinced now that none among them is certain what they are prescribing will work. Some are saying fix the currency challenges and the economy will be fine. On the other hand, others are saying fix the macroeconomic environment and the currency issue will be easy to resolve. My big question is don't we have experts in simulations who can simulate the various options with all the variables and give us the best available solution. My major worry is that most of what is being suggested now are all experiments which have never been tested. I will leave this to economists to resolve.

On the human resources front, there are so many challenges facing the business community. The number one challenge is that most businesses are sitting on a huge fixed cost structure largely driven by labour costs. The remuneration systems we have in the country do not take into consideration how the business is performing. In both bad and good times you are forced to pay the same fixed remuneration or even more. Until this issue is resolved through a social contract with legal provisions, most businesses will retrench in 2019.

The second problem emanating from the first one is that the cost of living has generally increased, hence employees will demand wage and salary adjustments. The adjustment demands have nothing to do with business performance but more to do with the general economic environment. What the labour unions forget is that the same environment affects employers as well. For those organisations that can afford some form of adjustment or payment to employees, be cautious when making the adjustments. It is better to give periodic once-off payments to cushion employees than give fixed and permanent adjustments especially when you are not assured of business sustainability.

I understand others who are earning foreign currency have started paying a portion of the remuneration to their employees in foreign currency. This is commendable given that in the current environment employees are likely to move to another employer for a few extra dollars.

While others will be able to afford some form of a salary adjustment, there are others that will not be able to do so without affecting the going concern of their business. Such employers will need to engage their employees so that a win-win situation can be achieved without putting employment at risk.

Given all the above scenarios we will see in 2019 some unions mobilising their members to engage in collective job action. Collective job action should always be the last resort for any progressive union. One rule of negotiation that a number of union leaders forget is that, you only negotiate for something you know exists. It is a waste of time to go and negotiate for something you know your employer will never be able to give due to incapacity.

There is likely to be more strikes in the public service than any other sector of the economy in 2019. In the private sector, I see no strikes taking place. State-run enterprises employing large numbers of people may try their luck on job action. The private sector will not go on strike because of the collective bargaining framework is much more refined than in the public sector. The private sector has permanent structures handling collective bargaining issues through the National Employment Councils. The second reason why the private sector will not have strikes is that the private sector can deal swiftly with those engaging in illegal job action through the Labour Act provisions. They have options to terminate employment easily making anyone contemplating engaging in illegal strike think twice before embarking on such a strike. The public sector seems more tolerant and is slow in dealing with such matters.

In 2019, we are likely to see more organisations relooking at their headcount as part of rationalisation. It is very likely that if demands for higher wages are not tied to company performance we will see more retrenchments in 2019.

The key message for every company is that the best way to win is to select people on merit. Putting people in jobs beyond their capacity in whatever role will derail your plans to achieve your vision. This is one thing most companies take for granted but it affects the performance of any organisation.

Memory Nguwi is an Occupational Psychologist, Data Scientist, Speaker, & Managing Consultant - Industrial Psychology Consultants (Pvt) Ltd a management and human resources consulting firm. https://www.linkedin.com/in/memorynguwi/ Phone 481946-48/481950/2900276/2900966 or email: mnguwi@ipcconsultants.com or visit our website at www.ipcconsultants.com

Editorial Team

This article was written by one of the consultants at IPC

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