Crazy times call for crazy business and career strategies

On December 2, 2015, Syed RizwanFarook and wife Tashfeen Malik sprayed their 80 friends with bullets and instantly killed 14 and injured 22 during a Christmas party in San Bernardino County.  Two Presidential candidates challenged each other to a slapping, fistfight, or gun battle.  Autism awareness is promoted by an upstart café where customers are served by differently-abled staff. In Manila, shipping a cargo from China costs P16,000, and P50,000 from Cagayan de Oro. A 3D printer works like a mini-factory in your ordinary desktop.  An app, Enterprise Resource Planning (ERP), can enhance your customer relations, financial planning and control, supply chain, manufacturing, and human resources management. Once suspicious Asian businesses are now migrating into the Cloud. Mark Zuckerberg is going to donate 99 percent of his wealth. After three prequels of the Star Wars trilogy, the Force returns with a seventh movie, and grossed over $1 billion in 12 days without Jar Jar Binks. After 20 years, it will be Independence Day again in 2016, with a bigger alien invasion, but without Will Smith.

What’ll they think of next? Life, business and careers are getting wackier than ever.  In 1994, Tom Peters already said, “Crazy times call for crazy organizations.”

Wealth redefined

In the past, wealth consisted of physical things, things you see and touch – land, factories, inventories, precious metals and stones, and cold cash.  Recently, new sources of wealth emerged – ideas, information and relationships. In the words of one executive, “If you can touch it, it’s not real.”

Philip Morris bought Kraft for $12.9 billion.  After careful scrutiny, accountants found that tangible assets were only worth $1.3 billion. So, Philip Morris paid for $11.6 billion “other stuff” that can’t be seen or touched.  Boy, that’s 90 percent of the purchase price.

3M’s strategic planner George Heggsaid, “We are trying to sell more and more intellect and less and less materials.”

Fred Moody of The New York Times Magazine wrote, “Microsoft’s only factory asset is the human imagination.”

Of IBM’s few hundred thousands employees, only 6 percent work in factories. The 94% are in engineering, design, software development, accounting, human resources, logistics, finance, and analytics. Online in IBM Philippines, a hundred Filipinos are doing “intellectual” or “imaginative” work for large enterprises in North America.

Crazy, hard times

In 1854, Charles John Huffam Dickens wrote his tenth and shortest novel, “Hard Times.”Set in fictitious industrial Coketown, the novel highlighted difficulties of transitioning from farm to factory, and the protracted battle between capitalists and unionists. In 1867, Karl Marx published “Das Kapital” and proposed that the motivating force for capitalism is the exploitation of labor.  Dickens was more entertaining, but Marx moved the Bolsheviks, and the rest is history.

According to government statistics, as of October 2015, there were 39.779 million employed Filipinos – 54.5 percent in services, 29.6 percent in agriculture and 15.9 percent in the industry sectors.

Between 1994 and 2015, the unemployment rate in the Philippines ranged from a high of 13.9% to a low of 5.7%. In October 2015, of 2.372 million persons unemployed, 63.4 percentwere males. The age group 15 to 24 years comprised 48.0 percent, while the age group 25 to 34 was at 32.1 percent. Some 22.6 percent of the unemployed were college graduates, 13.3 percent were college undergraduates, and 43.6 percent were high school graduates.

There were 7.021 millionunemployed persons; 50 percent worked less than 40 hours a week. Among the underemployed, 40 percent in agriculture, 42.3 percent were in services, and 17.8 percent were in industry.

Here’s the crux: roughly eight of 10 workers are in the informal sector or underground economy. Of those in the formal sector, more than 99% are employed in micro, small, and medium enterprises (MSMEs).

Crazy ideas that work

My economist friend, Dr. CielHabito, wrote in his December 15 column, “It seems that ours is a government that is particularly fond of getting into people’s way, be it in doing business, obtaining a whole range of public services, or engaging in any kind of productive activity. One might blame government itself if our economy is unable to generate ample jobs for our workers and thereby reduce poverty here at home, given the way its various regulations only serve to stifle otherwise job-creating economic activity.” (underscoring mine)

I agree with Dr. Habito. Despite its all-time low, unemployment in the Philippines is still a serious concern, perhaps the highest in the ASEAN. Let’s explore crazy ideas on employment.

Invest heavily in education. The top 20 countries with the best education systems in the world are led by Japan, South Korea, United Kingdom, Singapore and Russia. These countries lead in primary, collegiate and technological education. The most common area where they excel and invest heavily in is childhood education.

In our country,public education up to high school is free but of poor quality. Our students cannot cramp in college and suddenly compete with the best in the world. Quality education must start in early childhood.

Encourage real apprenticeship.In 2016 alone, Thailand will probably have a million new apprentices (learners) in automotive and other industries.

Germany was practically rebuilt after WW II and became an economic power with help from Dualtech, an apprenticeship modality now being adopted by Thailand.Some 45 years after the National Manpower and Youth Council (now TESDA) was formed to spearhead vocational technical training, there are only 25,000 apprentices.

Thanks to my friend Rep. Karlo Nograles, the lower house passed the apprenticeship bill endorsed by the Department of Labor, employer representatives, and labor leaders.  The Senate continues to sit on it and will not pass it in this Congress, on mere suspicion that employers might unduly take advantage of apprenticeship to avoid hiring regular employees.

With mutual trust, the Germans and the Thais have created more jobs for their citizens.

Strengthen outsourcing, contracting and subcontracting. A few Presidentiables, including my friend Roy Señeres, declared war on this legitimate business activity.  Perhaps, the old practice by a few unscrupulous businessmen in perpetually keeping some employees in “contractual” payroll is to blame.  Hereunder are excerpts of an email from Jun, a lawyer friend from the South, who wants his name withheld.

Jun says, “First, the government is the number 1 employer of contract workers, through the so-called ‘job order’system. The LGU’s contractual employees under this system have no civil service eligibility (thus unqualified), but are backed by politicians in return for the former’s campaign support.

Second, this scheme is more prevalent in the malls, where large numbers are hired for Christmas and school opening, product launch or promotion, or other non-regular activities.

Third, if contractual employment is inherently wrong, why are OFWs (new heroes) allowed by government to work abroad under a non-regular employment contract? Is this scheme permissible for employment abroad but objectionable for local employment?

Fourth, TV networks hire talents on contractual basis. There are pending NLRC cases against TV stations filed by temporary workers in ‘teleseryes’ or short programs.  Big TV personalities and program hosts are also hired on this basis for the longest time. Is contractual hiring permissible if the compensation is big but not allowable if compensation is small?

Fifth, to be competitive in the ASEAN integration, several countries have relaxed their labor laws.How can we compete if our competitors are liberalizing, and we are retrogressing?

Sixth, BPO (Business Process Outsourcing) is essentially contractual, but employs 1.2 million Filipinos. Will the politicians hire all these 1.2 million Filipinos if they outlaw outsourcing and contracting?”

Yes, Jun, these are crazy times.

(Ernie is the 2013 Executive Director and 1999 President of the People Management Association of the Philippines (PMAP); Chair of the AMCHAM Human Capital Committee; and Co-Chair of ECOP’s TWG on Labor and Social Policy Issues. He also chairs the Accreditation Council for the PMAP Society of Fellows in People Management. He is President and CEO of EC Business Solutions and Career Center. Contact him at [email protected])