Planning for what's not so normal in 2022

Photo taken from entrepreneur.com -
Photo taken from entrepreneur.com -

The year 2022 is almost upon us and this is the month when human resource departments in medium-sized firms and managers in small enterprises are finalising their plans for the months to come.

Industrial relations and human resource departments in the larger firms have already done it and are now just waiting on board approval. This is a standard end-of-year (EOY) exercise that takes place in NGOs, FBOs, trade unions, religious bodies and most family-based enterprises as well. Except this year there is nothing "standard" about it.

This year, we cannot base our future plans on past experiences, because we know that whatever is going to be “the new normal” will not benefit from experience gained from “the old normal.” There isn’t one. The last two years have shifted things in confusing waves of different sizes and times.

One of the EOY exercises that human resources departments, hand in hand with finance and accounts do, for example, is to review staff costs from previous years and calculate how to allocate funds for the upcoming year. You know, balancing how much you expect to have to spend in relation to how much you expect to earn, without going into debt.

Since income has been and will continue to be uncertain for the next 12-20 months, we all start with the first commandment of budgeting: do not borrow for recurrent expenditure unless you can repay the debt out of recurrent income. We learned that in secondary school. And this relates to family budgets as well as organisational ones.

Government budgeting apparently works on different rules, as this year’s budget has shown, just piling up debt for future generations to pay, and symbolically “printing” more money (what is called quantitative easing) to make each year’s accounts look good.

Do not try this at home. Your bank will not allow it.

For the cost of employing staff, the same rule applies. Employment costs include not just salaries and wages, employers’ contributions to national insurance, PAYE (pay as you earn), pension and health contributions for those who have plans for them (and yes, this does include family and domestic budgets as well). Staff costs include the cost of employee absenteeism.

In organisational life, every day an employee is absent with pay and without performance, for example, is a cost. And year after year, HR departments fudge a little. If organisational policy is to allow ten days' absence with pay per employee per year, for some reason, instead of calculating “per year” on a roll-over basis (ie how many days each employee has been absent for the last 12 months or 365 calendar days), inexperienced HR departments wipe the individual employee’s record clean on December 31 and start counting again on January 1.

So someone who has been absent for the entire allowable 20 days by the end of December, two “sick days” at a time, up to 14 working days, with one or two “personal or casual days” up to a limit of five, plus a few days off for “bereavement leave” and another ten-20 paid vacation leave days can start being absent again on January 1 with aplomb.

Well, January 1 is a paid public holiday, so change that to January 2.

The employee working next to them who has taken no sick days at all in 2021, nor funeral nor casual nor personal days over the last 12 months, is far more valuable, cost-wise, to the organisation, but has the same potential allocation for 2022.

Both, of course, get 18 public holidays and two weekend days per week, plus the allocated vacation days. If the allocation for absenteeism is counted on an annual basis and not on a roll-over 12-month basis, the cost of wages/salaries, plus replacement costs for temporary or casual workers to cover their longer absences such as maternity leave (13 weeks) or surgical leave, or training leave – not even getting into what has turned all possibility of algorithmic calculations, or even simple arithmetic budgeting upside down, government-ordered pandemic leave – is huge.

So, employers now have to play Nostradamus and decide what to allocate for pandemic quarantine-related leave; testing days: up to 14 actual sick days, at a minimum another 14; isolation days following contact with someone else at work who has tested positive, another 14; plus another 14 testing days to see if you are now positive, or the cost of a private test, between $800 and $1,200, to get results overnight, or 14 more days while you wait. And employers must also calculate the risk of another post-Tobago elections lockdown.

Now add a government specialty: government lockdowns.

And what about natural disasters? Fire, floods and acts of God? Do electricity shut-downs count as acts of God?

Every day’s paid absence for an employee not covered by a day’s production income adds up to a loss.

Include the upcoming increases in bank charges, water, internet and electricity and now, the land taxes about to come. Practical budgeting will have to take all of these things into consideration when facing negotiations for collective bargaining and deciding on employment numbers.

Budgeting becomes a survival skill not just for the organisation, but for every employed worker as well.

If it is a family budget being worked out, every day that the earner will be potentially absent without pay must be calculated, and those may have to be balanced by outside income.

This is reflection of the new normal socio-economic realities of our times. No one employee’s single wage can cover the expenses of families with children on one salary alone. Employers must understand that reality as well.

There are no easy answers.

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"Planning for what's not so normal in 2022"

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