05 Jul Communicate to limit wage impasse
The current series of protracted wage negotiations that are underway in the country’s mining, manufacturing, steel, engineering and public sectors highlight the need for companies to implement constructive communication channels to prevent damaging effects on their productivity and profitability levels.
This is according to Chris Jacobs, director of a leading international business consultancy firm, OIM.
He said it was critically important to establish a conducive working culture and environment through effective communication channels and regularly communicated common goals, values, personal responsibilities and the company’s performance.
This is so that all parties were informed and had realistic expectations by the time it came to the negotiating table.
“If you create the right climate of mutual understanding, then wage negotiations will take on a completely different tone,” he said.
“Establishing open feedback channels allows for management to address issues as they are raised, creating a constructive negotiating climate that will help avert protracted negotiations and possible strikes. This open climate creates a greater level of trust, which is necessary to conduct proper negotiations.”
Jacobs’ observation coincides with the wage negotiation process taking place in the country’s mining, manufacturing, steel and engineering, and public sectors.
Unions and employers are in their mid-year bargaining session, with various unions seeking a wage increase more than double the country’s 4.6% inflation rate.
More than 250 000 engineering workers, affiliated to the National Union of Metalworkers of South Africa (Numsa) have already begun a countrywide strike, demanding wage increases of 13%, down from an initial demand of 20%. The employer’s offer is 4.1%. The mining industry is expected to meet again next week with trade unions to further discuss wage proposals. In the public service sector, unions were consulting members about government’s recent wage offer of 6.8% against employees’ 8% demand.
Jacobs said the socio-economic development in South Africa had raised wage expectations.
At the same time, however, many companies were under pressure from rising costs and an economy that was still not firing on all cylinders.
“As such, there has to be a realistic and responsible way of sharing success. A company’s finances are easily affected by unpredictable changes in the world market and it is critical that employees are made aware of these as and when they occur.
“Therefore, it is vital to create a culture of commonality so that employees understand the business’ objectives and performances and are in sync with a common future,” he said.
“This shifts employee attitudes in favour of their responsibilities, causing them to strive towards the values that are communicated to them and become more passionate about the business and its success.”
Jacobs further said this type of environment was conducive to higher productivity levels, which was a dire need in South Africa.
“Lower than benchmark productivity levels and comparatively high wages makes our products uncompetitive in the global market. This is contributing to a cycle of more job losses and therefore greater poverty,” he said.
He pointed to poor education as a key contributor to a general lack of understanding in and about the business environment. He said this led to dissatisfaction among workers and makes increasing efficiency a particular challenge.
“By creating a business culture of mutual understanding, you keep people informed and engaged, regardless of their education level or job title.
“This culture of understanding establishes an environment where employees know where and how to address grievances or concerns, are up to date and more likely to be motivated to perform at their best levels of productivity,” he added.