adminAbel Zhakata Senior Reporter
MOST businesses and industries have collapsed or are on the brink of closure because senior managers are taking home hefty packages that are bleeding companies, the Minister of Public Service, Labour and Social Welfare, Cde Prisca Mupfumira, has said. Cde Mupfumira made the remarks during a business breakfast meeting held in Mutare last Tuesday.
She said most entities — both private and public — were using wrong operating models in which more than 80 percent of their income was being gobbled by wage bills.
The problem in Zimbabwe, she said, was not that workers are getting high salaries but that of companies with high wage bills that are eating a greater chunk of their incomes.
“We are facing the same problem in Government where 80 percent of revenue collected goes to salaries. Under normal circumstances, our wage bill must take at least 30 percent of what we get so that the remaining 70 percent goes to service provision. This is the same story at local authorities. Are we in business to pay salaries? That is the question you should ask yourself.
“When you use 80 percent of what you get to pay workers it means that the company is solely there for the workers not to make profit, which is wrong.
“What is happening is that some workers are duplicating roles and we need to rationalise our operations to ensure efficient and effective use of our human resource,” she said.
Good corporate governance, which essentially requires zero tolerance on corruption, is vital for sustainable business growth, she said.
“In order to maintain the sustainability of industries, good corporate governance should be paramount and be the basis for progressive business operations. In most businesses, 5 percent of the people who are in top management are earning 75 percent of the company’s earnings, while a lot of the workers take home 10 percent of the business earnings; this is not encouraging at all. There is need to strike a fair wage balance.”
Cde Mupfumira said there should be dialogue between employers and workers.
“Employers and workers must always be in dialogue on topical socio-economic issues. We urge you to stop the blame game where business blames Government and labour blames business and both blame Government.
“On the other hand, as Government we sometimes find ourselves blaming you or everyone else for doing nothing to improve the situation in the country. It is in this regard that we encourage dialogue between business and labour, including all the institutions available to reignite the Zimbabwe economy.”
She urged stakeholders to look for strategies that encourage productivity in order to revamp the economy.
“The current labour law review seeks to introduce productivity-related remuneration.
“In that regard the reform will legislate for the establishment of a National Productivity Institute. The institute was muted way back, but Government has not always had the resources for the establishment of this institution.
“It is my hope that with the availability of resources the centre will be established soon.
“Under this institution the idea also is to balance business interests with those of the worker while giving due regard to Government’s commitment to decent work. Our labour law reform will also take care of the current protracted dispute resolution system.
“Contentious issues arising from dubious arbitral awards will also be taken care of in the amendments.”
Online Reporter