Widespread use of part time work, resultant reduced wages, reduction of overtime… The crisis hit companies and forced them to change their organizational structure and general operation. Spotlight on changes in size that may well ultimately prove to be beneficial.
Government austerity plans, weaker purchasing power, decreased imports and exports, increased unemployment, economic and societal gloom… There are many effects of the crisis which has shaken the world in recent years. Although the immediate consequences have already been widely discussed, the International Labour Organization (ILO) now puts the finger on a deep change that has taken place within companies. Indeed, according to the 2012/2013 Global Wages Report many companies have been forced to adopt new business practices in response to the global economic crisis. Wages, working time and sharing of skills have therefore been redesigned, bringing their share of advantages and downright inconvenience.
Bleak wage prospects
The first sensitive point highlighted by the ILO conclusions is that on a global scale, wages and the number of hours worked by employees have not followed the dynamics of pervious decades. For example, in 2011, wages only advanced globally by an average of 1.2%. This rise is well below the rate of inflation and struggles to keep up in comparison with the 3% average rise recorded before the outbreak of the economic crisis in 2007. Overall, this meagre increase in workers’ pay cheques globally hides some major disparities. And while the West is struggling, from North America to Europe, the Latin American, Caribbean and even Asian countries have been able to keep up with small but up to date wage increases.
The slow development is explained by the reduced opportunity for overtime or by today’s massive use by companies of temporary or part-time work. In practise, many companies have replaced the traditional five-day work week with work weeks that are no more than three or four days. Another popular solution is reducing the length of the working day, with many companies reducing from eight or ten hours to four or six hours. Finally, in industry or construction periods without work have become widespread.
Work sharing and temporary work, essential for business?
Soberly, these initial conclusions of the 2012/2013 Global Wages Report certainly attest to a significant degradation in the wealth and purchasing power of employees worldwide. Difficulties that are still a concern for companies seem to be showing up behind the scenes. However, the picture doesn’t appear to be all that radically pessimistic. This is because it’s clear that new developments in working time, apart from being a certain source of savings, are also a useful excuse for dismissals. In effect, opting for sharing of working time allows for a reduction of payroll without necessarily having to say goodbye to employees. It is an anti-unemployment plan in the end, which of course includes asking employees to tighten their belts.
Although the economic difficulties that companies are still experiencing sometimes require different kinds of recruitment campaigns, temporary work seems to be an easily found and adaptable solution. Jacques Malenfant, specialist consultant in organizational development of labour relations and human resources management, also advises, “Why limit temporary management to simple replacement when greater benefit can be derived?"
Functional and not affected by the problems of lack of motivation often found with employees who have been too long occupied with the same task, temporary staff seems to have much to contribute in terms of skills and commitment. This aspect is confirmed by Jacques Malenfant, “using a temporary manager can help to inject fresh blood into the organization. He is functional as soon as he starts work. His diverse experience in a variety of industries, expertise in the field and organizational experience lets him quickly take a critical look at the area you have entrusted to him. He brings to the management team additional experience and an added value that can energize the staff and sometimes give it the necessary shot of adrenalin.”
Putting constraints on profits
The crisis is likely to have also interfered with people’s attitude and curbed employee motivation. New ways of using time and unexciting wages may give rise to employee uncertainty and anxiety, thus undermining their commitment and productivity. But everything then depends on how these changes are managed. As Pierre Boudreault, CRHA, MSc., senior consultant of IC Training, tells it, “from October 2010 to July 2012, a pharmaceutical company in the north of Montreal, recently acquired by a competitor, has faced several uncertain scenarios: an originally envisaged integration, through total sale of assets to closing of the site, to a new partial marketing plan and retaining one third of the jobs. Despite these many twists and turns, the division has experienced never before matched production records and product quality rates. Through innovative human resources management practices and implementation of practical processes and tools to support managers, a resilient and constructive attitude has emerged. This has allowed for, among other things, a high level of employee motivation, stabilizing the rate of turnover and significantly exceeding goals, despite a context of extreme uncertainty." It is a positive illustration, which is reflected in many other companies and fields of activity.
Here is what in the end appears to be providing a new unexpected and welcome aspect to the economic problems: despite difficulties and flagging wages, by forcing more flexibility and innovation relating to the use made of jobs and to structuring, the crisis has obliged a number of firms to revise their script.