Kamal Ghorui
In the current economic world order as is developing, the employee is the weak link in the economic activity chain.
It would be a truism to say that a very large part of the World Economic Business is done by Corporates (whether private, public, listed – promoter managed / professional managed, etc).
The Corporate structure is the structure that creates the maximum organized employment opportunities for human beings to work in. Sadly, the entire concept of Employee is getting corroded from within. Corporate Managements & other Forces in many ways are working against the interests of Employees.
There are many reasons why the Corporates are working against the concept / idea of an Employee, as an essential and integral part of their structure.
Among all the supports that a Corporate Structure needs such as Finance (own or borrowed), Management, Suppliers of Goods and Services, Employees, Materials and components – the Employee is the most susceptible and vulnerable.
The reasons are:
Technology development which is reducing the Role of the Employees in Output. At the lowest levels of production – there is robotic & programmed output being done in many process industries. It is also claimed that the Job that the middle layer of employees was doing of digesting the data, planning corrective actions from the data to improve efficiency of work, executing the corrective measures through instructions to the lower level of Employees can be done by software programmes which issue action instructions.
It was always felt that software programming business would never face a business slack. However, with Artificial Intelligence – the IT (Infotech) revolution is devouring it’s own. Programmers are no longer a very sought after commodity and are being discharged and replaced in large numbers.
Corporate Managements have found that reduction of Employees count, through investments into Technology Upgradations and Business purchase and integrations through Mergers & Acquisitions activity, can facilitate reduced head count of employees, saving Employees’ costs. Whether helpful in the long term, nobody knows.
Even at senior employees’ levels at Corporates, Investors are becoming very demanding of Performance and Returns. Professional CEOs and Heads of Business / support functions are having shorter life spans in their positions. This is reducing focus on long term actions and short term actions with immediate payback are becoming the norm. How beneficial this is for business longevity and survival can be argued!
The above current way of Economic growth and efficiency improvement (thru Employees’ head count reduction) is ultimately not going to expand economic activity. One is heading towards reduced numbers on the lowest tier of employees, the middle tier is being totally squeezed out of existence. The TOP layer is under constant surveillance. The triangle of employment is being sharply flattened and this has worried Employees.
This flattening is going to create very major income disparities – the bottom part of the triangle cannot sustain the demand requirements of output and the upper layer is of billionaires who cannot drive demand for basics and relative luxuries beyond a certain point.
A billionaire cannot consume the equivalent of a billion consumers of basic goods. The current economic cycle with it’s pronounced accent on reduced employment is cutting at the roots of demand (income from employment), which will force reduced supplies, which will force recession / depression and business downturn.
We are in danger of a reduced demand downwards spiral in World Economies. The Business Model of reduction in Employees as proof of Efficiency is dangerous and counter-productive. Already, population degrowth in many large economies is creating demand issues and inability to sustain the social welfare state.
We must not forget that one of the effects of the industrial revolution and the income disparities that came along with loss of employment and meagre wages / salary payment was the Communist revolution.
The communist revolution was defeated by capitalism wearing a ‘human face’ in terms of minimum remuneration, regulation of corporates into the ‘can’t do’ for economic activity (operating under Laws and Regulations – Health, Safety, etc).
Also, the social effect of provision of good Education and Health facilities at reasonable rates and social security pension payments post-retirement cushioned the harsh effects of raw capitalism. Capitalism was brought under political and social control.
How the current Technology Revolution will play out, one does not know. Whether the unemployed across sectors will create and prepare the ground for another Revolution or whether the Rulers (Executive Branch of Government / Legislators / Business Heads – Owners of Corporates) realizing the dangers of loss of organized employment are able to put guard rails and ensure the economic life boats don’t sink, needs to be seen.
In India, we are at a very peculiar situation of Economic Development.
On the one hand we are in the Top Tier of IT development while our basic industry and agriculture are lagging in efficient & productive output. We have not fully grasped the importance of the Corporate sector in building our agriculture base.
Indian agriculture is serviced by Government agencies and co-operatives. Agriculture must see the corporate sector coming in. Initially, it will be difficult but life will settle down.
Indian IT never focused on India as a market. Indian IT needs to move into agriculture in a big way and not the baby steps taken till date. India needs to improve it’s Agriculture and Industry by a process of formalization, which includes corporatization. In many ways, India missed the benefits of IT usage which it provided to other countries.
The condition of the gig industry employees’ remuneration structure got improved under the new Labour Codes. India must concentrate on it’s Employees as resources and not Costs. Costs are to be controlled.
Resources are to be managed. The Employee has to be made central to India Economic Output and Economy management. We cannot treat our Employees with disdain.
To be demanding on Performance and fair on compensation and treatment needs to be the way, one sees Employees. After all, the term for Employees is Human Resources. You cannot just discard and throw when you desire.
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