Sustainability the true gospel

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Sam Hlabati

ASK any businessperson who was in Zimbabwe four years ago about the economic terrain in the country and he or she will tell you of hardships of economic survival. Some of the employees brave enough to hang on to their jobs survived on the generosity of their struggling employers.Often, we have discussed the phenomenon of the re-birthing of our economy. If anyone is still in doubt about that, they just have to look around to see the number of sprouting businesses. Old players in the fast food, transport, travel and tourism sectors have been working hard to defend their territories from new entrants who are willing to provide not only alternative but also cheaper goods and services.
During the last phase (2006-2008) of the economic turmoil in this country, business was drastically reduced to short-term interventions. Long-term strategic planning had become irrelevant due to bleakness and uncertainty.
Human capital initiatives in most organisations suffered at the expense of survival. Nurturing and developing talent was considered an unreasonable luxury, hence not worth pursuing. In some enterprises, the depleted business activities reduced the skills-demands to basic operations, resulting in highly skilled persons becoming an overkill. Organisations dispensed with some of the highly skilled and equally highly paid and yet underutilised personnel. The world job markets were ready to absorb these highly sought-after Zimbabweans who were voting with their feet, joining the Diaspora. The talent benches in organisations became nearly empty, and still are.
It had become next to useless to pay an employee their wage or salary. Instead, many companies took initiatives to cushion their employees by providing them with basic goods. In some cases, such initiatives led to the work environment being paternalistic. Increased employer proportional contributions and even full cost cover for benefits such as medical insurance and tuition for dependent children, among others, became part of acceptable and expectable remuneration. These initiatives got their impetus from the business leaders’ need to hang onto what was left of human capital and pure humane generosity in some instances.
Irrespective of the fact that we are now out of the woods, or making steps out of the dark corner, depending on how optimistic one feels about our country’s prospects, the remuneration terrain has been slow to reshape. Some of the perks that were meant to alleviate employees’ interim hardships have stuck on due to acquired legal rights and the sustained expectations. Any attempts to restructure these benefits without careful thought would ignite the ire of the recipients. Irrespective of the paternalistic benefits that the employees now enjoy in a number of organisations, the battle for cash remuneration continues to be waged against the employer by militant organised labour. The cost of labour for any employer is relatively higher now in this trying period of recovery as compared to the tame years before the economic decline.
The foregoing shows that organisations have two elusive targets: attracting talent and managing the wage bill. Consider the situation of an organisation that is reviving operations that had either been scaled down or discontinued during the economic crisis period. With reduced talent availability, the few skilled individuals that are in the country are hunted like the Marange diamond. Their relative price rises by the day, making their retention a tough task. An organisation that searches for talent from outside its confines would certainly push its remuneration costs through the ceiling. An organisation that trudges ahead into the future without talent is like an aeroplane on a long-haul flight but without enough fuel. Such an organisation will, much like the ill-fated plane, crash. Buying the talent on the market is not sustainable in the long-term as money is not always plentifully at the disposal of the organisation and the recipients seek more than just money: They seek an employee value proposition.
Human talent cannot be manufactured at an organisational level, thus producing persons with specified skills at the end of an assembly line is not possible. However, talent can be grown. The persons available in the organisation possess latent potential that can be developed into useful organisational capabilities. Growing internal talent does not only foster internal staff morale, it creates a special kind of talent that has institutional memory, which is not possessed by poached talent.
The remuneration mixes that prevail after the influence of the paternalistic approach to protect employees from hyperinflation may not be ideal for long-term financial sustainability. As much as organisations have to reshape the remuneration dispensations from paternalistic to more performance-based approaches, the market has to move in consensus. A single employer or industry may not reasonably succeed in the absence of significant financial trade-offs to buy off the benefits. In some economies, such paternalistic benefits disappear when the tax revenue collection authorities pounce. It may be gross irrationality for an organisation to spend money on a non-performing employee through exorbitant benefits not linked to productivity, but rather driven by personal social circumstances. Such a scenario, when compounded by multiples of employees in an organisation, dents sustainability.
The time for organisations to review their human capital management strategies is now. There is no better time than now to start growing talent, as the war would certainly be getting tougher as more enterprises open for business and some resurrect from dormancy. The victories in the war for talent gained by throwing money at prospective candidates will not be sustainable. The rewards have to move beyond cash remuneration and benefits to total rewards. The offer of employment has to be a compelling one, anchored by a reasonable employee-value proposition. It is not about business survival anymore, it is now about sustainability strategies to take organisations into the promising future. An organisation without a strategy to build its talent bench may do its shareholders a favour by selling off while the organisation still has economic value. Organisations that are stuck with expensive remuneration offerings have little to do than get value-for-money by seeking performance out of employees. However, it is the employee-value proposition that will get employees to perform.

 

  • Sam Hlabati specialises in Human Capital business strategies advisory services. You can contact him on samhlabati@gmail.com

 

 

 

 

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