The writer is the author of the book “The Ruling of the Ungovernable”.
The feasibility study for investing in a trained, healthy, enthusiastic and satisfied workforce to increase productivity is quite straightforward as previously announced. The PIDE study estimated that increasing productivity from the current level to 3 percent and above could increase GDP growth to more than 6 percent. The hard part is how to achieve this high productivity. In the following paragraphs we outline some points to think about.
Since in-house training by each company individually has higher private costs, it is suggested that this task be done collectively. All export companies in particular must organize themselves and form sectoral export boards under a set of transparent rules and self-regulation. Only real issuers should be part of the board. The provincial and federal governments shall hand over the management and operation of certain technical and vocational institutes related to the export sectors to these councils.
For example, all TEVTA-affiliated institutes engaged in sporting goods, surgical instruments, leather garments, gloves and manufactures in Sialkot must be handed over to the respective sectoral councils. These institutes will design, develop and deliver hands-on training courses to bridge the gaps in the skill sets required now and in the future by these companies. Those who are selected and registered at these institutes must receive practical training through short attachments with the exporting companies. There should be a constant flow of short courses as well to introduce them to new techniques, methods and processes. Upon satisfactory completion of the courses, trainees can obtain apprenticeships in companies, and those who excel and do well can be given regular jobs.
This shift from a supply-based or certification-based approach to performance-based, demand-driven, and privately-operated and apprenticeship training will raise overall productivity and bring better values to our quality-enhanced products. The wages of employees of the exporting firms must be variable—one constant component is related to the average rate of inflation and the other variable is performance related. They should have a decent wage level that motivates them to work hard and stay in the company. Experienced workers add to productivity.
Regional TEVTAs and NAVTTC at the federal level should be given legal, regulatory, and financial responsibilities for setting standards, facilitating linkages with international accrediting bodies, providing financial assistance to needy but talented students—particularly women—bringing foreign experts to these institutes, and sending selected faculty members who have demonstrated Promising performance to overseas institutes such as Germany, Turkey, etc. Competitive grants for innovation and applied research and development should be offered to faculty members of these institutes as well as universities and colleges.
Family health care as well as educational facilities for children of workers and employees is another motivating factor for their retention. Owners must mediate company arrangements with social security organizations or charitable hospitals and clinics or ensure that Sehat health cards are provided to them. The proper proper factor would reduce absenteeism or procrastination. Likewise, schools like TCF and many others provide quality education to children from low-income families. Owners should use their good offices to enroll children in schools near their residence.
Contributions to the Workers’ Welfare Fund should not be collected by the government because the track record of use and efficacy is not very satisfactory. This money must be raised by sectoral export boards and can be supplemented with mortgage loans from banks for low-cost housing for workers and their families. Mental satisfaction with owning a home and the security it creates are two highly motivating factors for better performance. TDAP should only monitor whether the funds are being used properly and for the intended purpose.
Every organization has some young middle level managers who want to set up their own business. Companies should encourage them by linking arrangements with purchase agreements for materials, components, logistics and other services needed by employers. Intimate knowledge of these managers about the business and specific requirements will lead to low cost solutions. Thus the loyalty relationship will extend to these suppliers as well.
Another area that deserves some attention is the professionalism of the administrative staff. It is gratifying to note that some of the sons and daughters of our first generation of industry giants may or return home with academic training at some of the most reputable universities, are imbued with innovative ideas and should be given the opportunity to translate the ideas into practice. But in principle, relatives, relatives and friends should be assimilated and assimilated into the company provided that they are suitably qualified, adequately trained and able to contribute.
Loyalty and commitment to family owned businesses are important but these traits must be combined with professional and technical skills to realize productivity potential. Let them compete with other professionals from outside the company, and if they are comparable, then preference should be given to family members. Professionalism will be effective if accompanied by automation and digitization. Many companies have installed ERP systems but have to bypass that first step.
The tasks of management and continuous modernization of production, distribution and marketing are becoming more and more complex and to maintain competitive advantage must be entrusted to those who have the required capabilities. When IBA graduates are asked why they prefer joining multinational corporations rather than Pakistan-owned companies, they generally answer that their career advancement and past career achievement depended on their performance. In some Pakistani Sith mindset firms, they fear that they will be pressured by some relatives, and that their chances of advancement are fading regardless of their hard work, dedication and performance.
Export companies should recruit professionals, compensate them in line with market practices, provide them with opportunities to rise to the top and give them profit sharing incentives. The gains to be made by the firms will again be a large multiplier of the petty costs incurred. At the same time, incompetent and dead timber should be cleared without any considerations of luck, marwat, sprues etc.
Management consulting firms should be involved to consider strategic positioning, business processes, plant layouts, inventory management, logistics and supply chain management with reference to standards observed by competitors in other countries, design strategies and specific recommendations for implementation. Indian companies regularly work with international consulting firms that have helped them acquire billions of dollars in assets around the world, attract foreign direct investment to India, and facilitate joint ventures with foreign partners or marketing arrangements. Most of the multinational companies, including giants like Amazon and Apple, are chasing Indian companies to partner with. These consulting firms act as informal ambassadors for their clients’ companies in India and keep them informed of future opportunities.
Our companies have been shy from global consulting firms to develop future strategic plans because they simply think in terms of high costs without considering the significant benefits that will accrue to them over time. According to the UNCTAD World Investment Report, multinational companies from developing countries are becoming the fastest growing companies but we are losing in this area. Imagine the influence of Pakistani multinationals in promoting exports from Pakistan in the markets in which they will be located.