Labour unrest - The bane of India Inc
Young HR professionals exhibit very little knowledge and sensitivity towards socio-political and economic issues of the workers
Though contract labour comprises 60-70 per cent of the blue collar workforce, employers shy away from dealing with the issues of this group
Of late, one has seen considerable labour unrest in Indian enterprises. These cases of labour unrest, which range from strikes, lockouts and violence leading to deaths, were not a flash in the pan. Tension had been simmering for a long while now for higher pay, better working conditions or parity with temporary workers. On the company side, many managers and supervisors have been threatened, abusive language is common and indiscipline rampant on the shop floor. Talks between the management and the labour workforce unions has hit a new low. What has led to the sudden spurt of such unrest? Were the companies caught napping when the unrest broke out? What could have they done proactively and what can they do now to mitigate the situation?
We have to take a holistic view of the prevailing industrial relations climate. In spite of the major demographic advantage, a stable government at the Centre and the GDP growth stabilizing, will India become an economic super power? My guess is “No” unless the Indian corporate houses focus on productivity, innovation, deep employee engagement and skills development. Unfortunately, the manufacturing sector and some service sectors are also struggling with labor unrest. It is time for all of us to do some soul searching. Isolated problems that we end up seeing are the manifestation of much deep rooted issues. Let us examine some of them.
Industrial relations or employee relations somehow is deemed as a necessary evil rather than an important management function in most of the companies. After late 80s, as the knowledge industry started blossoming in India, the managements—even in the manufacturing sector—shifted the focus of talent development and talent management from the blue collared employees to the knowledge workers. The traditional joint consultative forums that existed in the past have become dysfunctional or have vanished. The only time managements engage with the unions is the occasion of the long-term settlements or some significant unrest. Proactive engagement is just missing.
Changes in labour laws are necessary because many of our laws are very old and irrelevant in today’s context. There are too many and often contradictory laws, many are un-enforceable and are poorly administered. Most labour laws do not support free economic principles; they have taken away employer’s freedom and flexibility and therefore lead them to indulge in unfair practices.
However, just changing the laws will not solve the problem. The attitude of the management will also have to change leading to developing cooperation within enterprises and determining a set of win-win goals. A culture of continuous improvement in the enterprise, ensuring its continued competitiveness and growth should be a common objective of the labour as well as management. Today, a large proportion of the blue collared employees working in the organized sector are agency/contract labor.
In most cases, these are dummy contractors who have no interest in the welfare, skills development or employee engagement type of initiatives. Archaic labor laws have led to this type of scenario. It will be observed that this huge contingent of workers are not supported by any of the HR policies and programs. The traditional personnel management groups in the manufacturing sector are just focused on legal compliances in respect of these employees and solving reactively issues if any, as they arise. Proactive work in the arena of the Industrial relations in most of the corporations has taken a back seat.
In the 90s, the traditional Personnel Management function was divided into HR and IR. The HR function was expected to focus on white collared employees, whereas the IR professionals managed the blue collared employees. Consequently, the best and the brightest chose to opt out of IR as they didn’t find it interesting and attractive. In addition, IR professionals were paid lesser than their HR counterparts. As a result, the quality of IR professionals has eroded and the lesser emphasis from the HR function has resulted in the lowering of standards in the man-management and allied activities.
It is also my observation that today young HR professionals are completely distanced from the ground realities; they exhibit very little knowledge and sensitivity towards socio-political and economic issues of the workers and society as a whole.
Like HR professionals, young engineers who hold supervisory positions in the factories are least interested in management of people. In addition, the administrative staff in factories and offices who are generally not well qualified or are trained in people management deal with huge contingent of contract workers; their insensitivity and / or incapability has led to considerable IR problems.
Contract labour has taken over the centre stage in the Industrial relations space today. They comprise 60-70 per cent of the blue collared workforce but the employers shy away from dealing with the issues of this group. It is reported that in some factories the ratio of permanent workers to contract workers has been 10:90. Most IR issues are cropping up from this segment of the workforce as they are treated unfairly in terms of their welfare, skill upgradation and fair wages. This in turn has a domino effect on the establishment as it leads to low productivity, lack of innovation and industrial dis-harmony.
To build competitive businesses especially in the manufacturing sector, the managements will have to focus on collaboration, engagement, creativity, talent upgradation and evolve a culture of productivity, quality and efficiency. Unfortunately, the management focus on this vital population is cost arbitrage and flexibility. Over time we have created two distinct classes among the blue collared workers–one is the permanent worker who is diminishing and aging and the other class of contract workers who are deprived of the basics. We, as a society, have not only been unfair to this class of workers but also deprived ourselves of the advantage that can accrue as a result of the unleashing of their potential. The potential of the large Indian workforce can never be harnessed with the traditional non-trusting relationships. This will be a fundamental shift in paradigm wherein both managements and unions will have to change. One of the ILO reports has pointed out that in 2013 the productivity (as measured in output) of Indian worker was $3,067 while that of Brazilian worker was $11,761 and that of china was $6,298.
The HR community talks a lot about human capital management. However, the discussion is centered on the white collar talent. Somewhere, they have completely ignored the blue collared workforce. Working towards industrial peace and harmony is not a rocket science. What’s needed is fair and equitable treatment, focusing on development, hygiene factors, engaging and motivating them and just treating them as fellow human beings.