Companies may think they save money if they hire contractual workers who do not stay long enough to be entitled to benefits and promotion in pay, but this may be a misconception.
On the contrary, firms that hire regular workers on a long-term basis and invest in increasing their productivity are the ones that would eventually become successful and prosperous,
According to Kee Beom Kim, a ILO employment specialist, having productive employees who are consequently happy and enjoy good morale contributes to the survival and growth of companies for the long term,
“Having workers whose contracts are for a very short period of time cannot be good either for the morale of those workers or in terms of the investment in those workers,” he said.
Kee is one of the experts at ILO’s 15th Asia and the Pacific Regional Meeting here tackling policies on job protection and economic growth amid the global financial crisis. The meeting attended by labor ministers and other stakeholders from the region ends on Wednesday.
Kee said contractualization was a quick response by companies to globalization, but he emphasized that firms should “think long term.”
“Countries are faced with many pressures as a result of world trade and globalization. These kinds of mechanisms provide companies with a means by which they can address some of these pressures. But having said that, one has to think long term,” he said.
Kee said using contractuals meant lower investment in employee productivity, which would eventually prove detrimental to a company’s interests.
“As a company, if one worker is going to be around for only six months, you have less incentive to invest in the productivity of that worker and providing him with more skills training because you know that after six months he’ll be gone,” Kim said.
He said, however, that long-term planning was a “key challenge for many companies because they’re required to report on their financial operations every quarter in many cases.”
Adapted from Philippine Daily Inquirer, Dec. 8, 2011