“It’s a ‘VUCA’ world.” This is how Dr. Rene Ofreneo, professor emeritus at the University of the Philippines Diliman School of Labor and Industrial Relations, characterized the state of the Philippine economy before the COVID-19 outbreak.
“VUCA” means “volatile, uncertain, complex and ambiguous.” With the ongoing pandemic, this VUCA state is bound to deepen, Ofreneo said.
In such a scenario, HR managers are in a position to influence business decisions, especially with regard to labor relations.
“This is critical in keeping business and employment going,” Ofreneo said.
He cited three major adjustment frameworks that companies may adopt: minimalist, which basically means maintaining the status quo; “race to the bottom” wherein management cuts costs by avoiding compliance with labor, social, environmental and health standards; and “race to the top” or continuous upgrading by investing in skills, people, innovation and the community.
“One reason the Philippines has been left behind by neighboring Asian countries is, we are not investing enough…. Up to now we are not able to produce a Samsung, Toyota, Huawei. This is because not only of failure to industrialize and failure to invest in technology but also failure to invest in people,” Ofreneo noted.
While specific adjustments depend on the companies’ CEOs and HR managers, Ofreneo stressed the importance of dialogue and rules. He cited the case of Mitsubishi, which grappled with violent strikes during the Asian financial crisis but was able to turn things around by sitting down with the workers. Another company saw its market shrink by as much as 50% but, by working with employees to look for ways to reduce waste and improve productivity, they were able to maintain almost the whole workforce and even double it after the financial crisis.
With regard to the COVID19 pandemic, Ofreneo offered a “preliminary listing” of things a company could do during this period: invest in training and skills while on lockdown, keep communication lines open, support welfare programs for direct and indirect employees, mind the interests of shareholders and stakeholders alike, and use the crisis to scope existing HR issues and refocus priorities.
He also emphasized the importance of investing in employees’ health as one way to boost productivity.
“The more you invest in health, eventually the more profitable you become, especially if you link health and safety with productivity programs.”
Ofreneo served as the resource person in the webinar “Path to The Next Normal: Human Resources Adjustments in The Time of COVID And Its Implications” organized by the People Management Association of the Philippines in April.