Why we must stop joking about jobs

Nov 21, 2004 Management, Sunday Nation

Yes, we need new jobs – half a million of them every year. Yes, we need to boost average incomes and purchasing power in this economy. But we do NOT need to create nonsensical “non-jobs” in order to achieve these goals.

This should be obvious but apparently is not, even amongst the powers that be. How else do you explain what (allegedly) just happened at Kenya Wildlife Services (KWS)? The issue is still under investigation, and I will comment no further on the particulars. But it is apparently true that some powerful people sent an additional 500-plus fellows to be recruited by KWS. This was not done in the interests of KWS, who did not need the extra workers; so in whose interest was it done?

I have seen even learned commentators suggest that perhaps it was no bad thing; does it not take us towards our annual goal of 500,000 new jobs, after all? Even if the politicians in question were merely doing it for their own ends – are 500 new incomes not a good thing in a limping economy? Perhaps it is time we revisited some economic fundamentals.

You cannot create jobs out of thin air. You cannot just decide to add jobs wherever you like on a whim. For one thing, who exactly will pay for them? If those 500 add nothing to KWS’s current or future revenues (a very likely outcome), but add 500 salaries to its overheads, then what will we have done to the corporation’s income statement? If KWS makes losses as a result of this “generosity”, who will foot the bill? The politicians who sent the unneeded workers? No, no, dear reader, the bill will come to you and me – the taxpayers who sustain parastatals run on the whims of politicians.

Let us say it: many of our state corporations and civic institutions are managed exactly like this. With a few notable exceptions, they are merely playgrounds for politicians to fulfil their obligations to their clansmen and constituents. It is where cousins, aunts and village idiots are kept parked and ungainfully employed. It is where you find 2 secretaries and 3 messengers per senior officer; where people cut the same patch of grass with a slasher every month (half a day’s work); and where drivers snore in limousines until the boss is ready to go home. That is why Telkom Kenya employed 65 workers per 1,000 lines when the international norm is just 4, and why it was forced to charge customers up to 10 times more for calls than similar organisations elsewhere. That is why we have so many state-run institutions; that is why government after government sustains them and resists all calls for privatisation or closure.

If we are serious about job creation, we have to understand the importance of productivity. Simply put, productivity is output per unit of input. In the case of labour, we need to be able to put workers to good use – each and every worker must make a healthy contribution to their organisation (and therefore the economy). Study after study shows that high productivity levels are a key determinant of economic growth and high living standards.

Take the case of East African Breweries. Once upon a time it was a typical overweight monopolist – employing thousands of underused workers and maintaining lots of under-utilised assets. Today, it is an extremely lean organisation that generates in excess of 30 billion shillings in revenue annually from just 1,100 workers. Was Kenya better off in the old days, when lots of people had jobs at EABL, and when it managed lots of facilities it didn’t need? No. Because today’s EABL is competently run and economically successful, it provides stable incomes for thousands of farmers, suppliers, distributors and retailers. It may not provide the employment directly, but it is running an efficient engine that promotes growth and jobs all around it. It pays out healthy dividends to 23,000 shareholders annually. Not to mention the small matter of Sh 16 billion contributed to the taxman last year.

That is what we need: “real”, “sustainable” and “proper” jobs. Real jobs add true value to an organisation. Sustainable jobs are not here today, gone tomorrow. Proper jobs are jobs with human dignity, not offered at exploitative wages and conducted in toxic environments. So how do we ensure that we focus on real jobs that boost national productivity?

The McKinsey Global Institute holds that we don’t have to wait for better schools systems to introduce a whole generation of better-educated workers in order to improve our productivity. Nor do we need to wait for rich countries to offer us more development aid. All we need to do is follow internationally proven approaches and “best practices” in organising production and managing workforces.

Rapid productivity growth could be unleashed if businesses and organisations simply structured and managed themselves as the world’s best companies do. For example, Japanese car firms have all managed to transplant themselves successfully in America, Europe and India. Simply by using their tried and tested production processes (but local labour) in those places, they have recorded significant boosts in local productivity. We don’t have to look too far to see this for ourselves. EABL clearly benefited from the inputs of Diageo, a global drinks giant. Kenya Airways was an airline in productivity crisis until it injected internationally benchmarked airline-management processes. Safaricom was transformed by two things: its alliance with global giant Vodafone, and the competitive challenge thrown down by Kencell (now Celtel) in 2000. Today, Safaricom is the region’s most respected telecommunications company and sustains thousands of handset sellers, scratch card vendors and phone booth operators.

Therein lies the key: efficient processes and healthy competition. We need to organise ourselves to produce efficiently; and need the challenge of genuine competitive threat to keep us on our toes. Many state corporations, sadly, lack both. Poor processes and restrictive practices persist because they benefit someone. In our case, the “someone” is our politicians and a clutch of business moguls. They have no interest in the long-term economic health of institutions, and every interest in personal short-term financial and political gain.

What is good for the economy is also good for the individual. It may be tempting to think any job is a good job – until you consider the opportunity cost. If you hold a joke job given to you by a joke leader, what do you really gain? A few months or years of unearned income, perhaps, until you are finally retrenched? And what do you lose? The opportunity to learn real skills, acquire leading-edge on-the-job training and develop a meaningful career. Working in joke jobs is the sure-fire way to remain a grass cutter all your life.

Unless we can learn to organise our public and private corporations to international standards, and instil competition in all sectors, the 500,000 new jobs will remain the sort of dream that emerges from an opium pipe. We have to learn to stop joking about jobs, because the joke is really on all of us.