Quality Magazine

The Last Word: Workers of the World

January 2, 2008

Welcome to 2008! Looking into a new year, what should prove noteworthy to monitor? The issue that should be watched, whether it gains any headlines, is “the worker.” This will be the year in which great changes need to take place regarding investment in, transformation of and elevation of the employee who makes manufacturing lines run on an hourly wage basis. The regions of the world worth watching include the United States, China, Europe and Canada.

For U.S. workers already employed, employers continue to offer more opportunities to increase one’s knowledge. During 2007, 83% of respondents to the Quality Magazine State of Profession Survey say they have some type of ongoing training throughout the year. Increases from 2006 were seen in on-the-job training (+6%) and tuition reimbursement (+2%) for education.

With some experts estimating the cost of replacing a worker at 150% of that person’s annual salary, it becomes simple math to invest in educating an employee rather than look for the increasingly scarce supply of new, skilled employees.

Dr. Nicholas Eberstadt, an expert on the effects of demographics on economy at the American Enterprise Institute, recently spoke about China’s One-Child Policy, explaining its negative effects on the rapidly growing Chinese economy (www.aei.org/publications/filter.all,pubID.26835/pub_detail.asp): “...In fact, the only part of working age population that stands to increase in size between now and 2030 is the over-fifty-year-old group. Will they bring the [economic] dynamism we have come to expect from China in recent decades?”

Eberstadt calls for immediate abandonment of the One-Child Policy, thereby allowing the people to determine the size of their families. This, he concludes, would reverse less-than-net replacement rate of birth that currently exists.

It’s hard to argue with Eberstadt’s numbers. China’s position as an economic powerhouse will soon fizzle if Chinese officials don’t elevate their confidence in the traditions of the common worker and their innate ability to know what makes their country rich.

Canada is facing many of the same problems as Europe because of the increasingly burdensome benefits it gives to its employees. One such example is Ontario’s new February “family day” holiday, which is proving unpopular with employers. The CEO of one large auto parts maker called it, “the last thing we need in an already tough environment,” particularly with the auto market in flux and the increased value of the Canadian dollar reducing the global market for Canadian goods. This CEO estimates she will need to make up nearly 60,000 hours of lost productivity because of this government-mandated holiday.

Similarly, France’s President Nicolas Sarkozy is trying to end the 35-hour work week and allow people to work longer, while not causing a fight with the trade unions. He believes it is necessary for French workers to be allowed to work more than 35 hours per week if France is to remain competitive in world markets.

And, a government-funded study found that British bosses are increasingly hiring Eastern Europeans, Polish workers in particular, ahead of Britons, because, “they work harder, are perceived as more diligent and dedicated.” This has many out-of-work British workers unhappy. But for a British employer who has to compete internationally, there is an increased cost that comes with hiring a Briton, with all the government-mandated cost associated with such a worker, than an Eastern European, for whom such mandates do not exist.

One British worker said, “To be fair, they (Poles) are good workers, and they put in the effort and hours.”

British, French and Canadian employers are often burdened by cumbersome trade union and governmental regulations that protect the employee while hindering the employer. These protections, while suitable 10 or 20 years ago in a largely local economy, have not been updated to meet the current realities of a global marketplace. Employees in these countries often feel entitled to these mandates and have fiercely resisted any attempts to alter them. Sarkozy, British Prime Minister Gordon Brown and Canadian Prime Minister Stephen Harper have inherited systems that are dangerous to their countries’ growth, and they must end such entitlements if their workforces are to be transformed to global competitors.

Each of these regions merit in-depth analysis in and of themselves. This is merely a snapshot of pressing issues that each country faces and must struggle to address in the coming year. They all have one thing in common-they hinge on the state of the employee, or “worker.” None will be solved during 2008, but how each is dealt with will have far more long-lasting effect than any other issue likely to emerge in this new year.

What do you think? What is on your list of the biggest challenges we face during 2008? Share your thoughts with me at williamst@qualitymag.com.