On 26th February, 2020, Pakistan confirmed its first 2 cases of corona virus. 4 Weeks since the 1st case broke out in Pakistan, the whole country is now on a lock down. These last 4 weeks have been full of anticipation & fear. Not just because of the corona virus but also due to the global world shutting down. The indecisive future has taken a toll on all working individuals: Entrepreneurs, white collar working staff & blue collar working staff.
Entrepreneurs mostly from the manufacturing and export organisations have seen customers closedown region wise over the last couple of weeks. Italy was the first to shut down as the number of COVID-19 cases were increasing by the day. Followed up by Spain that announced lock down soon after Italy. People from the textile garment industry would highlight these 2 cities as the fashion premiers of garments as most of the Europe follows the trends set in these markets by brands/designers etc. The inevitable was soon to come. UK , USA and the other mass markets soon closed down.
Practically everyone working in this industry has been fearful for loosing their jobs. More so for people who are working in sales and marketing who have seen the projections, future orders and other viable committments being put on hold. Sales and Marketing departments accurately forecast the downsizing for any company as they are in direct communication with the buyer and well aware of the global present situations and lockdowns. The management & other financial service departments have been working over time to access the cost benefit analysis of the present situation, more so working out the redundant costs soon to be eliminated in the foreseeable future. These redundant costs primarily include downsizing. In the first hit the skilled & unskilled blue colour workforce will be targeted as the capacities of all present manufacturing companies out weighs against the current requirements /orders of the customer. In-turn we will be seeing a massive down sizing of companies soon after the lock down is over (i.e 6th April, 2020). The beautiful prevailing human resource practices will indicate that workers will be send home with nothing but the earned salary of the previous month. As the word contemplation on the categorisation of workforce in the outdated laws of factories and workplaces, most of the skilled workers/ helpers/ junior assistants/ coordinators/ un skilled staff will be be set free and in most cases without notice pay, long term benefits or any other incentivised schemes.
So its convenient to let them go . Mind you these are the same people who are the back bone of the actual production of goods. These are the same people who work day and night to achieve the targets set by the planning department of the companies. The same people who put their heart and soul into their work to meet the deadline and the targets. These people are the bread winners of their house and usually on an average they have a family of 5 or more to support
One might wander why would the junior most staff be let go in the first hit.
The answer is Simple: "These workers are at the bottom of the food chain"
So its convenient to let them go . Mind you these are the same people who are the back bone of the actual production of goods. These are the same people who work day and night to achieve the targets set by the planning department of the companies. The same people who put their heart and soul into their work to meet the deadline and the targets. These people are the bread winners of their house and usually on an average they have a family of 5 or more to support
The word disposable actually fits in the real categorisation of these employees. As in any unforeseen event, these workers will be the first to be laid off. Usually such workers would also find instant work in other companies in the normal events because of their skill set. They will be hired again on similar work contracts, by other companies who have longer orders projections. But this time around, these disposable workers will not find instant work. As the entire industry is facing a shut out due to global lock down of buyers. This will not just be for a couple of weeks but will remain so for at-least the next 2 to 3 months at the very least. Because all brands/stores and companies are globally off. And even so that we all truly and dearly pray that things get better, buying textile products (garments and other amenities) would be the last concern for any consumers in the coming months.
Q1: So what would happen when there will be abundant skilled resource with no jobs?
Mass unemployment increases poverty. It also aids to stress, mental health, amongst other issues in the unemployed individuals. In a country like Pakistan, where there are no unemployment funds, there is no cost of unemployment. One of the most feared things in mass unemployment is suicide. I will not touch here other elements such as increase in crime activity, social distancing, effects on health. My major focus here is (God Forbid) suicide and its correlation to mass unemployment.
The suicide rate in Pakistan is approximately 1.4 deaths per 100,000 inhabitants. Pakistan's death rate, as given by the World Bank, is 7.28 per 1000 people. A study suggests: Unemployment causes 45,000 suicides a year worldwide. Researchers say unemployment linked to more suicides than recession and that risk among jobless is stronger where more people are in work. So where does one go with mass un employment, poverty driven economy and high number of social dependents on the earning individuals. There hasn't been many studies conducted on the suicide rates in Pakistan. Many go un-reported, due to pressures of social, cultural and religious norms. But behind the veil of normality, Suicide & mental illness triggered by poverty pressures exists in abundance.
The suicide rate in Pakistan is approximately 1.4 deaths per 100,000 inhabitants. Pakistan's death rate, as given by the World Bank, is 7.28 per 1000 people. A study suggests: Unemployment causes 45,000 suicides a year worldwide. Researchers say unemployment linked to more suicides than recession and that risk among jobless is stronger where more people are in work. So where does one go with mass un employment, poverty driven economy and high number of social dependents on the earning individuals. There hasn't been many studies conducted on the suicide rates in Pakistan. Many go un-reported, due to pressures of social, cultural and religious norms. But behind the veil of normality, Suicide & mental illness triggered by poverty pressures exists in abundance.
Q2: My 2nd question here is when companies do layoff junior White collar & Blue collar workers, why does this have to be instant?
Why aren't their any notice periods/ notice payments/ gratuity or long term benefits payments?
I am a part of this social group which discusses and focuses on the industry related issues. The topic of discussion over the last month has been retrenchment. It is surprising to say that most companies talked about down sizing. However none of the companies publicly addressed any compensation or benefits programme being offered to the people being down sized. I guess this is a confidential topic and most companies and their respective officials would choose not to share their strategies in public. Even if retrenchment is the only strategy available to all the corporations, there are still better ways to execute them. Give everyone a fair chance and let them be compensated financially as per the law in the truest spirit. But rest assured, in most companies the history will repeat its self and primitive layoff standards would come into play. These actions will be represented as deemed necessary, whereas in reality they are nothing more than a sugar coating on a sharp knife. 
The second part of the question is, why wont these laid off people served with notice periods/ be paid notice pays or any other long term benefit. Its mostly seen as convenient. I am not saying that all companies will do this. But after reviewing historical data, historical employment practices, most of the companies will do this. The Trump card at play here is that globally the markets and the customers are off and their is no work at present. So it is deemed necessary for the companies to let go of all such employees. Business ethics will have no role to play here as numbers will speak for its self. All calculations here will denote to reduce the fixed costs. The most appropriate fixed cost to reduce is the salaries. So therefore all rationale will indicate, supported by the numbers/calculations to immediate go for massive reduction of employee force. I have said it in many forums and seminars that corporations are far powerful than the individuals. In a third word country like Pakistan, corporations are much more stronger than individuals can ever be. Any resistance to any retrenchment strategy is futile. As seen in most cases of the past, this time would be similar as well.
The social cultural norms of our society tend to follow the examples set by the west in most of our lives. I have been following the media and internet on how companies are globally reacting to the threat of Corona Virus. Most Companies have not announced lay offs as yet. But-their Governments have come forward with unemployment relief funds and so does Pakistan government as well. But my question is to the entrepreneurs of the Pakistan is that Governments will play their role in relief, how will companies act in this time? If we follow the west so well, why cant we follow them in their HR practices as well. This is not just the time to add or subtract numbers but to reflect and come forward in owning your people and owning your human resource.
Downsizing is inevitable, Agreed!! Why cant there be a better way to do it? why cant people be compensated in the truest spirit of the law. We don't need riddlers in form of HR practitioners who twist and turn the law in the favour of the corporations. we need people with better understanding of human experience. We need people who understand, incorporate and act in the truest spirit of Human resource and corporate social responsibility. Its time to show the best standard. Have the spirit of giving. Have the spirit of looking after one another. We need to sustain this period as whole, as a group and not just for individuals. There is no other way to sustain it.
Even China a country which remained closed & lockdown for almost 2 months has not announced any layoffs or retrenchment strategies. Governments, multinational corporations, airlines, everyone has announced emergency relief funds and programmes for their work forces and people. People have been working from home and they are being paid in full. Most textiles factories in Pakistan have not even paid the accrued salary of March, 2020 even though the banks are fully operational and people are at homes in the lock down. Government and other respective bodies are urging people to stay at home. Stock up on food and other amenities for the next two weeks. How does one expect any worker to buy food when they have not been paid their Salary of March, 2020. The lock down started in the last week of March, 2020 and will remain in force till 6th April, 2020. Most of the workers don't even know if they will be paid for the days off in lockdown or not. Historic practices do indicate that such leaves will be treated as leave without pay. Lets see time will unfold every thing in the next couple of weeks.
Downsizing is inevitable, Agreed!! Why cant there be a better way to do it? why cant people be compensated in the truest spirit of the law. We don't need riddlers in form of HR practitioners who twist and turn the law in the favour of the corporations. we need people with better understanding of human experience. We need people who understand, incorporate and act in the truest spirit of Human resource and corporate social responsibility. Its time to show the best standard. Have the spirit of giving. Have the spirit of looking after one another. We need to sustain this period as whole, as a group and not just for individuals. There is no other way to sustain it.
Even China a country which remained closed & lockdown for almost 2 months has not announced any layoffs or retrenchment strategies. Governments, multinational corporations, airlines, everyone has announced emergency relief funds and programmes for their work forces and people. People have been working from home and they are being paid in full. Most textiles factories in Pakistan have not even paid the accrued salary of March, 2020 even though the banks are fully operational and people are at homes in the lock down. Government and other respective bodies are urging people to stay at home. Stock up on food and other amenities for the next two weeks. How does one expect any worker to buy food when they have not been paid their Salary of March, 2020. The lock down started in the last week of March, 2020 and will remain in force till 6th April, 2020. Most of the workers don't even know if they will be paid for the days off in lockdown or not. Historic practices do indicate that such leaves will be treated as leave without pay. Lets see time will unfold every thing in the next couple of weeks.
As some on who has been associated with Textile (Garment Manufacturing) industry of Pakistan for the last 10 years. I feel this phase is different amongst all the other slumps that we have seen in the past. This is not a usual breakdown of activities. The impact of COVID-19 will last for months to come. I hope and pray that the world is able to counter this threat to the earliest. However the impact and aftermath is gonna stay with us for many months to come. I have been contacted by a number of junior associates, workers and other relevant people from the industry. Everyone reaching out in context to discuss what the future might hold. I try to give them hope & reassurance in this dire time. However I myself don't exactly know how things will be once the lock down is over. For the time being its just a wait, A wait for the Sting!!!I will say this globally every economy is going to suffer. However the deep impact on third world countries where majority of the population revolves around the poverty line will be impacted more. Corona may destroy human lives but the downfall in economies will impact everyone. We are headed towards another great depression and in the foreseeable future for the next 5 to 6 months the impact will be massive. The worst is yet to come!!!!!!!!
Last but not least,
My heart goes out to everyone affected through this terrible virus. May God Almighty give them good health and speedy recovery, Amen.
For those who departed from this world due to Corona Virus. I pray that you all are blessed with heaven and eternal peace. Because you all fought a very brave war.
I personally want to thank all the paramedics, doctors, nurses, medical staff, police, army and who so ever is out there trying to save people. You people are not just national heroes but global heroes. May God Bless you always.
For Everyone Stay Safe People, Stay inside.
God Bless.
Muhammad
31st March, 2020
Great and worth reading.
ReplyDeleteVery well written and highlights the real issues faced by this outbreak. Sad to see lack of support for especially lower income staff.
ReplyDeleteRightly said, even most of the workers might not have food in this period.
ReplyDeleteSome companies even paid full wages and salaries in advance to support their employees with some food package for low income employees.
So True and Thanks for highlighting inevitable results
ReplyDeleteIncase of Downsizing. In Pakistan people don't have Unemployment Insurance, Federal government should provide significant funding to help support unemployment programs around the country.