Post-Covid labor relations
THE National Conciliation and Mediation Board-National Capital Region (NCMB-NCR) and A Society of Advocates of Peace and Progress Inc. (Asapp) invited me on Nov. 18, 2022 to discuss post-pandemic labor relations challenges in their annual convention, attended by labor and management representatives from different industries. Labor Undersecretary Benedicto Ernesto R. Bitonio Jr., Industrial Global Union President Ramon Certeza, Asapp President Jennet U. Cacho, NCMBNCR Director Cynthia C. Foncardas, and NCMB Executive Director Maria Teresita D. Lacsamana-Cancio graced the occasion.
The following are excerpts from my talk.
Trying times
Indeed, these are trying times for employers and employees. Since the onset of the Covid-19 pandemic, collective bargaining agreement (CBA) negotiations often deadlocked. However, the NCMB successfully did its job of making the negotiating parties agree to a compromise to avert a strike where nobody wins. In some cases, modest wage increases, or even a zero increase and financial assistance, were agreed at the negotiating table or granted through DoLE arbitral awards just to preserve the workers’ jobs and allow the companies to continue operating.
I opened my presentation with this statement, “It is not easy to predict the challenges in labor relations in a post-Covid world. As we speak, the pandemic is still in our midst, and experts cannot seem to predict when it will end.”
“To create a more sustainable and mutually beneficial employer-employee relationship, we must first understand what could happen in the future. Then, we should try to develop an inspiring vision to address the challenges that that future could bring. As a blessing in disguise, the pandemic has brought about uncertainties that helped many employer and worker organizations evolve. I personally hope that the pandemic has underscored the need for them to work together for mutual gain.”
Rewind and reset
In the distant past, particularly during the First Industrial Revolution, factory owners and managers were more focused on efficiency, productivity and profits. At that time, workers were almost simply considered an integral part of the production process, much like raw materials, processes, and tools and equipment. Sweatshops once existed — a shame and disgrace. Then, the markets shifted and demanded a higher level of workers’ skills. In the 1990s, the War for Talent began, and workers moved to caring employers with great employee value propositions (EVP) beyond higher pay. I thought then that the Era of the Employee was about to arrive.
Then in 2020, the coronavirus came and accelerated whatever slow changes in employer-employee relations were about to take place within a few years or a decade. Covid-19 compelled employers to support their workers’ health, livelihood and dignity, if they wanted to continue operating. With Covid-19 threatening their jobs, workers suddenly showed resilience and adaptability and helped businesses create an innovative customer experience. There were problems and challenges in employer-employee relationships, but the parties knew that they were both affected by inflation, supply chain disruptions, rising cost of materials, supplies, and putting food on the table. This mutual understanding rendered labor relations more relatively peaceful and stable, even in trying times today.
On one hand, the pandemic tested the worker-employer relationship. On the other hand, it opened the eyes of workers and employers to harsh realities. The developments and evolving modus vivendi in labor relations that could have played over years or decades were compressed into a matter of months. Labor and management learned new ways and practices. Should they undo these practices when the pandemic is over? How should labor relations (LR) further evolve?
Evolving labor relations
There could be a number of LR scenarios in the future, depending on the nature of work, government impact, technology, climate change and natural calamities, demographic shift, social divide in education, health, and wealth, and other factors. Like it or not, the market shall continue to determine whether a businessman will still have a business, or whether a worker will have a job. The market continues to change its requirement for skills and, unless there is a government-led massive reskilling and upskilling, employers will find difficulty in hiring the right people, and workers will not qualify for jobs that need a changing mix of technical and human skills.
The London-based global consulting firm Deloitte ran a 2021 survey with chief executive officers (CEOs) to determine their views about the changing workplace. Based on the survey, CEOs believe that “work will evolve in different alternative scenarios — work as fashion, war between talent, work is work, and purpose unleashed. Depending on which scenario materializes, employers will have three different levels of responses — instinctive, survive and thrive.”
According to the Deloitte survey, in Work as Fashion, employers will REACT to worker sentiments, competitor actions and market dynamics. In a War between Talent scenario, workers will compete for limited jobs amid a talent surplus. They are easily replaceable, and worker-employer relations would be IMPERSONAL. In a Work is Work scenario, responsibility and personal fulfillment are separate domains, and relationship will be PROFESSIONAL. In the more ideal scenario where Purpose is Unleashed, there will be a COMMUNAL relationship driven by shared purpose and values.
The three levels of employer responses are: 1) Instinctive — this is simply a knee-jerk or gut reaction rather than strategic, and therefore RISKY; 2) Survive — this is a short-term tactic to do whatever is necessary to survive and succeed today; it’s MYOPIC; and 3) Thrive — this is the superior response based on a mindset of succeeding over the long-term and using today’s disruptions as catalyst to drive the organization forward; this response is SUSTAINABLE.
These alternative scenarios and responses will be further affected by the country’s economic growth, technology, climate change issues and unexpected calamities, social inequities and how they are being addressed, talent supply, and government impact.
Conclusion
Sadly, employers cannot choose the Scenario that will unfold. However, based on 3,900 responses to the Deloitte 2021 survey, 41 percent of respondents think that “Work is Work” is the dominant future, while 28 percent think that “War between Talent” will actually materialize. Personally, I believe that employers must adopt the Thrive mindset, regardless of however the future unfolds.
The following factors could stand in the way of a stable employer-employee relationship: mutual disrespect, arrogance, fake sincerity, indifference and apathy. To cultivate a more ideal relationship, labor and management must make the following mutual obligations: mutual respect, authenticity, flexibility, interdependence, and acceptance of each other’s role and expectations.
Largely agreeing with the Deloitte survey, I said at the tripartite forum, “We must recognize that the disruptions we are seeing now could be continual rather than episodic. Instead of complaining or using these disruptions as an excuse for an undesirable relationship, employers and employees must leverage these disruptions to catalyze their relationship and create value not only for themselves, but for the other stakeholders that together they serve.”
Are we moving from stockholder capitalism to stakeholder capitalism?
Ernie Cecilia is the chairman of the Human Capital Committee and the Publication Committee of the American Chamber of Commerce of the Philippines (AmCham); chairman of the Employers Confederation of the Philippines’ (ECOP’s) TWG on Labor Policy and Social Issues; and past president of the People Management Association of the Philippines (PMAP). He can be reached at erniececilia@gmail.com)