Low on productivity, not on skills

LAHORE: When we talk about productivity, the blame is usually put on the low skills of workers, but why then the productivity of the same workers is high when they migrate to a developed economy.

A major factor that improves productivity is not skill or machines, but the working culture of the economy. Even within a sector we see some companies growing at fast speed, while many with similar equipment and human resource underperform.

Company culture plays an important role in this regard. In developed economies, the human beings are respected, and their rights are fully protected.

Employers in developed economies cannot dare to exploit any worker or discriminate based on colour or religion. This protection from any injustice provided by the country culture and norms instils confidence in workers and they operate according to their potential.

Moreover, this protection from exploitation does not mean that they would remain employed if the performance is below par. Employers have also got right to fire any lethargic worker.

In economies like Pakistan, this culture of justice and humanity is absent. Regulators mostly look the other way when they see workers being exploited.

The law prohibits taking work from children, but we see children working on roadside workshops, in small grocery stores and even in small manufacturing unit or as servants in homes. Our culture tolerates this.

The law mandates that every worker has the right to get minimum wage. More than 80 percent of the workers in our country are denied minimum wage. In fact, instead of normal eight-hour work, some are forced to work for 12 hours at lower than minimum wage. The regulators are toothless.

They dare not confront the exploiting employers. We cannot expect workers to be as productive as in developed economies because their culture differs from ours.

Still we see that there are companies in Pakistan that are operating at full potential. If we study any of these companies, it will be found that they have developed company culture based on human respect and dignity.

These companies do not believe in common perception among employers that production could be increased through arm twisting of workers. These successful companies respect all their workers.

There is no gender discrimination. Any employee that dares to discriminate on the bases of cast, colour or gender is shown the door.

All employees must follow the standard operating procedures including the chief executive. These companies pay higher than the minimum wage (because they think the minimum wage is exploitative).

Workers are entitled to overtime. They are entitled to casual, sick, and earned leave. All employees are required to avail the earn leave for recreation and fun.

Workers and their families have medical cover. Some serve free food during duty time. The same food is available to the workers and the executives and in the same dining hall (this creates comradeship among the workers and executives).

Most of these companies are multinationals, but a few are domestic enterprises as well. The company culture is at par with country culture of efficient economies. They flourish even in bad times because of this culture.

In general terms, our economy is not socially efficient. Even the most efficient individuals that performed well in developed economies become lethargic in Pakistan.

These brilliant individuals cannot change the overall context in which they live and work. The only option left for them is to move elsewhere.

This is the reason that many foreign qualified highly educated individuals either stay back in socially efficient economies or move out of Pakistan after staying in Pakistan for some time.

Regional or local low skill traps we are facing are because of our social inefficiency. When there are no high-paying jobs available in the country, then individuals have no reason to spend in their own education.

Similarly, if the available skilled force in a region is small then the entrepreneurs are not motivated to invest their money. The net result is that in a socially inefficient economy, workers desire to move out for better earnings and the investors try their luck in green pastures where they could increase their wealth.

It goes without saying that lack of investment in physical and intangible assets, skills shortages, inadequate infrastructure, poor management, and a weak macroeconomic environment are all responsible for low productivity.