Mr Howlin, tell the public service unions that good work should be a given, not a cause for pay claims
Published 06/05/2015 | 02:30
I recently visited an Irish-owned company that makes high spec products for indigenous and overseas food producers. The company employs 200 in what would otherwise be a rural unemployment blackspot. Turnover is €170m. My visit's purpose was to explore how a systematic approach to innovation could drive a doubling of this figure.
This is a terrific Irish success story and a credit to the people who founded and built up the business. Their achievement is all the greater because, with Ireland's cost structures, it is especially challenging for labour-intensive manufacturing companies to outperform fierce global competition.
So, what is their secret? At the core is a relentless pursuit of productivity gains through continuous process improvement and innovation.
All staff are trained to identify unnecessary double-handling, bottlenecks in the workflow, waste of materials or energy and to maximise the use of expensive machines, improve customer service and reduce risk. Several staff have 'black belt' qualifications in 'LEAN', a universally recognised set of such tools. They constantly scan the globe to compare every tiny detail of their work with 'best in class' and then imitate or better it.
There is total role flexibility with job demarcations determined only by peoples' skill levels, rather than any inherited job categories. There is a friendly atmosphere about the place and an air of calm.
During the recession the company showed it cared for its staff by not letting anyone go, while staff took a pay cut. Their commitment to the company is reflected in almost zero absenteeism. There is a very high level of business literacy among staff; they know the cost of waste, down-time and other inefficiencies and they know the meaning of profit and a firm's ability to pay. Wage rates are competitive as evidenced by low turnover among both engineering and operative-level staff. There are no reserved car parking spaces, except for visitors and people with a disability.
This is not a fairy story. It is Irish business and Irish workers at their very best. The culture apparent here is in sharp contrast to that revealed in recent statements from public service union leaders in setting out their stall for "pay restoration" talks. Apart from claiming entitlement to the first fruits of the recovery, ahead of services restoration, which ought to be the priority, they have upped the ante, insisting that these "pay restoration" talks cannot be used to secure productivity improvements. It's "payback time", full stop. Any future productivity gains will have to be linked to additional pay increases, on top of the "pay restoration" they see as their due.
The case just described illustrates that continuous productivity improvement is an everyday activity, essential to success in any internationally competitive business today. It is a ceaseless effort, not episodic, and certainly does not imply wage increases for every increment of progress.
Productivity improvement is a way of life and, as such, is separate from negotiations about pay. This mindset seems to have been adopted in parts of the public service, for example, in the Department of Social Protection which delivered significantly more output with fewer resources during the recession. Elsewhere there is enormous scope for efficiency gains, both within particular departments and agencies and, most especially, at the interface between organisations.
For example, joined-up operations between fire brigade and ambulance services or among the gardai, the courts service and the prison service would yield major savings. There is huge potential to deliver more with less in local government and particularly in the health service, which is bedevilled with outdated professional boundaries which also, as it happens, are detrimental to patient safety.
The philosophy of continuous productivity improvement as a way of life, which doesn't automatically imply pay rises, needs to be put to the unions in forthcoming talks and, over time, should be embedded in the culture of the public service.
Minister Brendan Howlin seems to have this in mind in his recent statement that "Workplace reform is now a fact of life in the public service and is a normal part of the working environment".
Key to Irish businesses being able to compete globally are public services that match their relevant 'best-in-class' international benchmarks.
Expectations of pay increases are not unreasonable if, for example, a significant change in rosters causes major disruption to staff, but not if the changes involve adoption of a new technology, new work practices, cross-training to enable flexible working across outdated professional and organisational turf boundaries, structural reforms or similar modernising initiatives.
Working smarter is a natural human instinct and an intelligent response to international competition.