Why productivity matters

Why productivity matters

Arnout de Koster Country manager View profile

This was the academic title of the 5 day workshop DECP organized together with the Training centre of the ILO (ITC-ILO) for 9 employers' organisations of Africa. The title could also have been: ‘how to increase the size of the pie of the economy, to be able to share more?’

The face-to-face workshop itself was preceded by a 3 week long distance learning course, where the participants had to do readings and execute assignments. 

This training activity was organized at their specific request, because it was felt that the concept of productivity was insufficiently understood and used in their national frameworks. 

The workshop explained in rather great detail the concept of productivity, and the difference between productivity - competitiveness - profitability. It then focused on the measurement of productivity. The main subject concerned the use of these concepts in the many roles which employers' organisations fulfil.

As policy actors, employers' organisations can refer to it usefully, as an inclusive subject, in the framework of business agenda’s and other national actions to support via national productivity centres efforts to increase productivity. In their role as bargaining agents, productivity proves a very useful and more objective concept to determine margins for wage negotiations, be it for the determination of minimum wages, as for the determination of wage levels at sectoral or company level. Finally, productivity can  help in devising a more overall services policy (training, advice) of employers’ organisations for their company members.

In the course of the workshop, also attention was given to the EU and especially Dutch VNO-NCW examples to produce regularly economic barometers for the external stakeholders.

In the course of the discussions, it also came up that using the productivity approach in social dialogue may need more understanding and training of the trade unions, in order to overcome mistrust and to create a common platform for a more economically based industrial relations- and wage determination policy.

Each of the DECP partners has indicated its areas of action where they can apply the main teachings of the workshop. A number opt to get more strongly engaged in the creation or activation of national productivity centres. Others are keen to start with the production of economic barometers and forecast, partially also because this may be a concrete step to move from a rather limited employers’ organisation to a more general role, in where the ambit of work also includes economic issues, and to become a business member organisation. Still others were particularly interested in the use of the concepts for the determination of minimum wages, to diminish the political role of governments in minimum wage determination (often at the 1st of May, increments in minimum wages are announced by the governments). And finally, the possibilities to a trade-off between wage increases and more productivity, via the introduction of more effective work practices in collective bargaining agreements, also got quite some interest.

DECP will now follow up at national level these different plans and initiatives, and provide for technical support.