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Social Cause Marketing - The Regis Group Inc

Social Cause Marketing - The Regis Group Inc

INTERVIEW to shorten the

INTERVIEW to shorten the work week in coming months. What are the merits and demerits of this job saving scheme? This is the best way forward. Layoffs do not always work in a companyís favor. It might seem easy to ask people to leave but even that has a short term cost in terms of financial outgo. Also, often in the process of layoffs, a certain number of the best performers tend to depart which is not desirable. Also, remember bad times are not going to last forever. So when the economy begins to pick-up, we will all need those who left. At that point to get back the trained manpower, who had been aligned with company goals and philosophy is difficult. There is then a high cost that we would need to pay for hiring and training. Job saving schemes, like what we did at Apollo Tyres, is the best way forward, wherever possible. Two countries standout as having the most developed and systematic approach: Japan and Germany, which both provide government subsidies to companies who keep on workers even though thereís little or no work for them to do. Both have recently extended their schemes. What is your assessment of such a tacit support from government? Do you see merit in this approach or do you think this would end up doing more damage (in the long term) than the short-term good? Of course this is good. If governments can do this, it is favorable for the workforce. And we have to remember that both Japan and Germany have very high quality and efficient companies. They have trained, high-value workforces. As long as such systems do not encourage the unfit and inefficient to become part of the systems ñ which both Japan and Germany do ñ then this is good. However, not all governments are able to do this. Nor is it desirable or feasible across the board. We all need to work with the constraints and the positives of our own situations. Should every other country emulate these two countriesí prac- tices? In fact, OECD expects unemployment in Germany to rise from its current 8.6% to 11.5% by the end of 2010 ñ higher than many of its European neighbors. Japanís unemployment rate is expected to rise, although less dramatically, to above 5.5% next year from 4% in 2008. As I have mentioned above, each governmentís response will be shaped by two things. One, the crisis and its potential fallout. And two, governance policies and needs of the situation. Given the diverse countries across the world, there really cannot be a single formula which everyone can follow. OECDís chief economist, Klaus Schmidt-Hebbel argues forcefully that governments should do more to retrain workers and overhaul their labor-market policies to ensure that once recovery comes, new jobs are created in sufficient numbers to swiftly bring the jobless rate back down again. I agree. Actually all parties have a role to play in situations like this ñ the government, companies, unions, employees and even the financial or banking system. How effective the impact will eventually be is a direct fallout of coordinated action amongst all these diverse groups of people and systems, swiftness of action and proactive play. Even though it is one of the possible solutions, it is surely not an easy one to implement with success. Thereís immense political pressure on authorities to do something to slow growing joblessness. For instance, when Jet Airways (in India) laid off 1900 employees, the Civil Aviation Minister, Mr. Praful Patel said that ìministry would certainly not be very happy with the approach of Jet Airways.î Similarly when the French oil company, Total announced the closure of two refineries and the consequent loss of 550 jobs, it attracted a furious public outcry including denunciations from two government ministers. In both the cases, the companies had to withdraw their decisions. Do you think it is right to force the compa- nies to continue to save jobs even when they are bleeding from the downturn bruises? I agree with your argument, however in any nation jobs are a very sensitive issue and needs to be handled with a lot of sensitivity. I will not be right on my part to comment on either of these two cases since I am not familiar with exactly how they were handled internally, what was said, how it was undertaken, what the individual and community level communication was, were all the regulatory authorities and the unions taken into account, etc., ñ all these play a role. At the end of the day, two parties need to find ways to work towards a solution which minimises the pain across the board. We have seen across history that unilateral decisions favoring only a single party do not have a high shelf life. What do you think should be the greater and broader role of governments in such situations? Should they adopt job-preservation-schemes or should they concentrate more on job-creationschemes? As you have seen with the Indian government, our focus has always been on job creation. These have come in many ways, rural schemes, incentives to industries to move to backward areas, state incentives to invest in a particular state of industry, softer loan agreement and others. For the longer term this is the way to go. However, at certain points in time there is merit in undertaking limited job preservation schemes also, for a certain period of time to enable job seekers to find new avenues. This need not mean that people get paid to do no work ñ that really never works since it ends up impact the longer term work culture and morale of people. What works is redeployment. Moving people from non or low productive areas to higher impact, high productive areas, sectors, regions. However, all said and done, I would reiterate that none of this is easy to implement, especially in a government context where the governmentís focus should be on good governance. SEPTEMBER 2009 70 EFFECTIVE EXECUTIVE

THANE JANATA BANK SEPTEMBER 2009 71 EFFECTIVE EXECUTIVE

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