Saturday, October 01, 2011

PALEA: When Unionism Becomes Anachronistic

I think unions are becoming anachronistic, a bit out of step in a time when jobs are no longer 'manufacturing centered' but 'information and skills centered'.

We live in an age where Filipinos can be employed by companies abroad without having to leave their homeland. Yes, I am referring to BPO's -- not just call centers, but the entire spectrum of BDO services.

Unions were basically formed by workers to guard against abuses by "management" and acting as a group, the idea was that unions could act en masse to pressure management into adopting more 'worker friendly' management practices.

Unionism has given birth to minimum wage, 8-hour working days, rest days, over time pay, annual salary increases, job security, financial benefits, retirement benefits, medical insurance, life insurance and a whole slew of other things.

Of course, these things adds costs to "management" and "management" will always try to get away with paying as little as possible for as much work as possible.

Obviously, the solution here really, is for management to hire people who will not necessarily do the job best but those who can do the job reasonably well at a much lower wage and with as little benefits as possible.

Rather than deal with CBAs and wages made higher because of "benefits", most companies opt for contractual arrangements with workers.  Which isn't really a bad thing.

Looking at it from the point of view of an entrepreneur, it makes perfect sense.

Labor is cheap in the Philippines and as long as the job you need to be done doesn't need a Rocket Science degree, any of the 60 million able bodied Filipinos will do.

Moreover, there is a thing about Filipino employees that make them difficult to handle after a couple of years...

Take a master carpenter we usually hire for jobs around the house. First time we had him do a project, he did it in less time and at less cost than we expected.  The next job we gave him, he did the project slightly longer than it should take him and we spent more than we expected.  Third job we gave him, he slacked off and not only did the project go beyond the deadline.... It cost us more because of the botched job he did.

If we were locked into keeping him employed from project to project, we'd be deep in debt.  Thankfully, we weren't and we were able to contract another master carpenter for the next slew of projects.

The thing is, there are master carpenters that have been with us for 10 years and none of them have any assurance from us that we will keep them employed, yet they are continuously employed -- if not with us, then with some of our relatives or friends or associates.  To retain their services, those who hire them gladly pay more as long as they are assured of the same quality as their last job.

In other situations, employees who last with a company for more than a year begin to develop a sense of entitlement and what were first given to them as privileges soon become thought of as rights.  Bonuses are usually given for exceptional performance, but these days, employees think that bonuses are a right -- it is not.

Another thing is security of tenure or job security...  perhaps that's all right for a government agency, but not so for a privately owned company which isn't assured of income at all.

These days, job security in companies is mistakenly thought of as a RIGHT.

It is not.

Have you heard of Profit Security?

No? Try Googling it/  Click here and you will see that nothing that turns up on google actually comes close to the idea that companies or entrepreneurs are assured of an income.

1 comment:

Chino said...

If PALEA members knew better, they would have supported the current efforts to change the economic provisions to the constitutions. If ever it happens, more companies could come in that would give them better jobs, or PAL could take on investment to increase salaries and benefits. Employees really need education on how businesses and investment, especially foreign investment, work.

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