The local wage culture, is one associated with increasing demands for compensation and benefits and decreasing productivity. 

The dilemma thus faced by local businesses is to conjure up that winning business approach which balances productivity with wages and also gain profits at the end of the day. 

This was one of the key points under discussion at the recently concluded Employers’ Symposium 2015. Organized by the Employers’ Federation of Ceylon (EFC), the symposium sought to address some of the pressing and timely issues, related to productivity and wages, faced by employers. Aptly themed “The Balancing Act,” the symposium gave prominence to these concerns and sought to provide assistance to the employers’ decisive roles in balancing performance with wages.  

The key concern amongst most employers is its inability to increase performance. In fact, the decreasing productivity in the country has impacted its competitiveness in the globalized economy. And the added weight of the speculated ‘minimum wage’ legislation does not pose rosy prospects for the private sector employers, especially when businesses with global peers face strong low-wage contenders. 

The declining export sector is a case in point. The local wage culture, having sowed the seeds of poor work ethics and even poorer labour productivity, has cost the country any advantage it had over its global competitors. Further, the complexities of measuring productivity as well as associating it with wage contribute towards a ‘wage’ and ‘job security’ culture in Sri Lanka.

Strategies to overcome this disfavourable wage culture were the focus of the inaugural addresses of the fourth consecutive annual Employers’ Symposium. 

The welcome address for the event, by Managing Director Nisol Diamonds Ltd and Council Member, EFC, Nigel Austin set the perfect tone for the day by directing the participants’ attention towards the conundrum, the dilemma faced by most employers’, the task of associating wages with performance. Austin’s opening remarks asserted the private sector’s heavy dependence on performance, market forces and the global economic environment. The ability to implement the perfect balance between productivity, growth, wages and profits, ensuring all stakeholders benefit, is considered business success. He further asserted the need for the state to consider these invariants when creating wage related legislation. 

The ILO Country Director, Donglin Li delivered a special note at the event emphasizing the importance of the concept of international labour standards, especially in the present globalised economy where employment is ‘internationalized’ due to the increased outsourcing of jobs. Li spoke on the significance of labour rights, proper working conditions, which acknowledges labour and wages as part of social justice. 

The much broader perspectives, and the intricate sub-disciplines, which contribute towards the decisions of compensation and benefits, were presented by Chairman Singer (Sri Lanka) PLC, and Executive Director Institute of Policy Studies (IPS) Sri Lanka, Dr. Saman Kelegama in his keynote address. Dr. Kelegama’s address discussed the Sri Lankan wage culture centred on the billion dollar question ‘how to provide compensation and benefits without compromising the competitiveness?’    

To bring to light the concerns of the local wage culture vis-a-vis optimizing profits in a global economy, Dr. Kelegama asserted the need for using ‘competitiveness’ as the new yardstick for measuring performance; cost of production, being directly related to the cost of labour, impacts the competitive advantage an organization has over its industry peers. 

Dr. Kelegama also affirmed that the local wage culture’s legislature supported job security, which in most cases is perceived as an entitlement, hinders any inclination towards productivity on the part of the employee – legitimized complacency at the cost of responsibility. Dr. Kelegama’s concluding statements were directed at encouraging policy changes that appreciates ‘protecting the worker’ rather than ‘protecting the jobs.’