The year 2019 is getting to a close. It has been a very difficult year for both businesses and employees alike. It is a year when we witnessed some of the worst business challenges ever witnessed in Zimbabwe.
There is a shortage of power to drive industries. The country had poor agriculture season this year, affecting a number of value chains. The power cuts have affected output significantly across all industries. On average, companies reported a reduction in sales volume of around 40%. Nearly half of the business output was lost in 2019 compared to 2018.
On the labour front, this year we have witnessed some of the highest wage demands ever witnessed. Due to affordability and sustainability concerns, we have seen companies resorting to giving non-contractual cushioning or hardship allowances. A good move by employers, given the dire situation they find themselves in.
Most trade unions have pushed their members to declare incapacity to report for work as a bargaining strategy. The majority of employers have been served with such letters from their workers through their workers’ committee or through the trade unions.
Salaries across all sectors have been eroded by inflation and no sector paid in Zimbabwe dollar has been able to match the salary increases to inflation.
On the wage and salary front, things are not as dire in exporting companies when compared to the rest of the non-exporting companies.
Most employees are looking for opportunities in exporting companies, as these have pegged salaries to the United States dollar rate, even if in some instances they pay in the Zimbabwe dollar. People are also looking for opportunities in the non-governmental organisations sector.
Economists have given their outlooks for 2020. The majority of these points to tough times ahead. Based on these forecasts by economists, I now give what is see happening on the labour front in 2020.
Companies must expect more wage demands from employees, as long as inflation remains high. We are likely to see an exodus of skilled personnel.These will mainly go to South Africa and other regional countries. Groups likely to find it easy to get jobs outside are experienced professionals like engineers, artisans, financial experts, and bankers.
We are likely to witness more retrenchment in 2020 especially if the demand for higher wages continues. Most companies will realign their headcount in line with output (output has already fallen by 40%). If companies do go ahead and align their headcount, we are likely to see companies shedding off close to 20% of their staff. Most likely to be affected are the low skills categories of employees.
There will be nominal wage increases that will never match inflation. This is likely to lead to agitation within the workforce.
We are likely to see more strikes in the public sector than in the private sector. In the private sector, employers have more blunt legal instruments to deal with striking employees than in the public sector.
We are likely to see some business closing due to the difficult economic environment, but also due to competition.
While most companies will resort to retrenchment, we are also likely to see companies applying to the Labour Ministry not to pay anything at all or to pay a portion of the mandatory retrenchment package (two weeks salary for every year served).
Overall, we are likely to see employees who are disengaged and this will naturally influence the performance of most businesses. Companies would need to keep their employees updated on developments taking place in the business.
Nguwi is an occupational psychologist, data scientist, speaker and managing consultant at Industrial Psychology Consultants (Pvt) Ltd, a management and HR consulting firm. — https://www.linkedin.com/in/memorynguwi/ Phone: +263 4 481946-48/2900276 or mobile: +263 772 356 361 or e-mail: email@example.com or visit www.ipcconsultants.com