Emcoz warns of more layoffs

see the unemployment rising from the current 90 percent.
Low capacity utilisation and product demand, obsolete machinery susceptible to frequent breakdowns, lack of working capital and raw materials are some of the factors triggering retrenchments.

“The prevailing economic environment has created severe stress in employer-employee relationships.
“Sometimes, when all other avenues have been explored, there is no alternative to rightsizing for business sustainability and survival,” said Emcoz.
Retrenchments have been on the increase since the adoption of the multiple-currency regime in February 2009, as wages continue to soar above productivity.

Last year, alone 3 605 workers were laid off and the number is expected to double this year.
“The trend is likely to increase in the near future as companies hedge themselves against increasing labour costs,” said Emcoz.
According to the Confederation of Zimbabwe Industries, average capacity utilisation is around 60 percent, with most  companies operating below 50 percent. The manufacturing sector is the most affected, operating at about 30 percent.

Analysts said the increase in retrenchments poses “poverty threats” as those retrenched are not receiving packages which can sustain them.
Some companies have resorted to production-linked salaries, which means if production is low, salaries will remain low.
A snap survey by Herald Business showed that about 80 percent of companies listed on the Zimbabwe Stock Exchange “rationalised” staffing levels in the past three years.

Financial statements for most listed companies showed that about 40 percent of revenues were going towards employment costs.
Emcoz representatives on the Retrenchment Board says they have noted “less than perfect” preparation on employers’ part of appearing before the board to make their case for realistic retrenchment packages difficult to sustain and defend.

“This is a management development gap, requiring urgent attention,’ said Emcoz.
Against this background, Emcoz will next week convene a workshop targeting executives responsible for determining rightsizing policies and those who execute the policies. The workshop seeks to expose employers to the ethical and legal requirements in the retrenchment process.

Participants would receive information on Zimbabwe’s current retrenchment trends, presentations on the preparation for the retrenchment exercise to be procedurally and substantively correct and develop an action plan policy position for retrenchments.