Getting it Right

Making Corporate-Community Relations Work

Luc Zandvliet, Mary Anderson

• Editorial: Routledge
• Año: 2017
• ISBN:
  9781351279543
• Edición: 1
• Categoría: Business
• Categoría: Business generale

Getting it Right is a manual for corporate managers responsible for company operations in poor and politically unstable societies. Managers can analyse their own interactions with local communities, so that they can more effectively accomplish their production goals and ensure local communities are better off as a result.

Section II

6
Hiring policies

Ahmed's task was to establish a corporate office in a new country to start exploration activities. Because this was an area of high unemployment, he anticipated that local communities would have unrealistically high expectations about employment. He was also aware that there were ethnic conflicts in the area that sometimes erupted into violence. To avoid accusations of favoritism, he decided that the way to show his neutrality was to hire solely based on merit. However, his efforts to be fair were not appreciated by local communities who accused the company of favoring "outsiders" over local people. Rumors about upcoming protests started to reach the managing director's office.

The hiring issue

Company-generated employment provides an important opportunity for average citizens, particularly youth or others without land, to benefit from a company's presence and gain legitimate access to cash. Jobs are one: of the: biggest corporate contributions to a local economy and should, theoretically, solidify company–community relations. However, in place after place, issues surrounding jobs become a major source of tension.

What goes wrong?

Conflict may arise over employment opportunities for locals and for outsiders

Companies commit themselves to hiring locally. Almost all define local according to some geographical boundary that seems reasonable. Sometimes local is meant to refer to people from the nation where work is done. In other situations, companies refer to a specific area that is directly impacted by, or adjacent to, corporate activities as local.

Communities define local through a range of lenses. Local may refer to the place of birth, to ancestry, to current residence, and so on.

When company and community are working from different ideas of what it means to be local, they may talk past each other as they try to discuss employment issues. A company may be trying its best to respond to community concerns about local hiring while communities may be blocking the company gate accusing the company of unfairly hiring outsiders.

Companies and communities sometimes have different definitions of "local"

Although most managers would like to give preference to local people, they find that often local people do not meet the company's job qualifications. This is especially true in rural areas where formal education opportunities are low. So the company — and its contractors — are compelled to recruit qualified staff from a wider geographical area. When local communities are under the impression — right or wrong — that the company, or its contractors, brings in outsiders for work they believe can be done by local people, managers can be sure they will encounter protests.

Hiring based on merit can inadvertently reinforce divisions among groups

Companies regularly announce that they are politically neutral with regard to ethnic or other sub-group conflict. They adopt policies that are intended to avoid the perception of bias or favoritism among groups.

However, communities are made up of groups, which often operate according to historical patterns by which some groups are advantaged and others disadvantaged. Systems of exclusion, racism, prejudice, and privilege often underlie intergroup tensions.

One frequently seen result of internal community dynamics is a systematic advantaging of some groups over others in access to education. Companies' criteria for hiring often include education as a sought-after qualification. When education is a factor specified for merit hiring, the hiring outcome can reinforce established historical inequities. What is intended by managers as a neutral policy, in fact reinforces the status quo. This may feed into and exacerbate divisions in that community. And, of course, communities that perceive they are being marginalized often respond negatively to the company.

What was intended as a neutral policy reinforces the status quo and can feed into conflict

"These folks in the company are hypocrites. They say they care about us, the local people. But they employ people from the same elites and tribes that have been in power in this country for decades and have always gotten rich over our backs. And now the same people are sitting in the top floors of the company building. Meanwhile, the oil the company is exploiting is our oil. The only 'benefit' we get is to work for $1 per day as security guards!"

(Local security guard at oil site)

Delegating hiring decisions to third parties can lead bias and backfire on the company

Companies sometimes decide to leave the hiring of local labor to local actors: for example, local community groups, contractors, or governments. They see this as a way to give communities ownership of fair hiring practices.

Leaving hiring decisions to local actors does not guarantee fairness. This is because community groups or local contractors are part of local power divisions. This can lead them to bring employees from other regions whom they have trained and whom they can trust (perhaps because of family ties or clan loyalty). Local communities may not see them as impartial.

"In order to avoid conflict with communities over hiring outsiders, we left it up to the Community Employment Committee to put forward local candidates for non-skilled labor positions. Then we realized that the authority and legitimacy that we provided to the Employment Committees created opportunities for corruption. The price for outsiders to be qualified as 'local' was three chickens. By trying to do the right thing, we effectively increased the potential for bribery of the Committee members as well as reinforced the division between the haves and the have-nots as those that are able to afford a bribe have a better chance of obtaining a job."

(External affairs director of a construction company)

When companies are in the: process of establishing themselves and are not yet fully staffed, they want to avoid what they see as the troubling exercise of hiring staff, so they may rely on intermediaries such as "fixers" or "body shops" to provide them with laborers. These employment agencies provide labor pools for the company by hiring laborers at a fixed rate and making them available for company jobs.

Using body shops creates resentment against the company for allowing exploitative practices to occur

One problem with this approach is that such intermediaries typically pay extremely low wages in order to maximize their own profit margins. A company may not be aware of this or may know that this is the usual practice and, therefore, feel it is acceptable. However, even though local people work for this body shop at the rates offered in other jobs, they may resent the company for allowing, supporting, and benefiting from an unfair exploitative system it could have changed.

In several areas, company managers who hired local employment agencies have told CEP that they were astounded to learn that the agency recruited from groups that came from outside the region where the company worked. Again, they discovered this was a problem only when local communities protested disruptively.

Government interference can lead to discrimination and politicization of hiring

The problem of government interference is more difficult for a company to handle. A government's interest may be in handing out well-paid jobs to its own constituencies or it may fear that a company's resources and influence could support opposition groups. In some contexts, corporate activities generate much-needed revenues for the authorities to finance the conflict to which they are party. These authorities involve themselves in the hiring process because they fear the company will hire members of opposition groups and, in turn, those group members will relay information that could make it easy for their group to attack the company facility, cutting off a revenue source to the authorities.

For their part, communities have little sympathy for the dilemma that companies face when a government has influence in the selection process. They see this approach as evidence of a company's affiliation with the ruling class. This affiliation is perceived as unfair and makes the company a target for anyone who opposes government policies.

Non–transparent hiring policies can turn frustrated job seekers against the company

Companies have unforeseen activities for which they need laborers on short notice. Although managers acknowledge the safety and security risks associated with, sometimes, large groups of unemployed people hanging around the front gates, it is convenient for managers to have a pool of people readily available to work.

Communities often accuse companies of deliberately keeping job seekers in the dark in order to benefit from this cheap and readily available labor. New company sites attract large groups of job seekers, some of whom come long distances. They leave their families and use their savings (or take out loans) to sustain themselves for the time they think it will take to gain employment. They rent cheap rooms (sometimes in exchange for labor) and hang around the company gates in anticipation of vacancies or a response to their job application. Job seekers say that, unless: the company explicitly says it no longer has vacancies, they will stay and hope for a job. By the time it is clear that the company is no longer hiring, job seekers may be so frustrated and so much in debt to local businesses that it takes little encouragement for them to get involved in criminal activities (mainly targeting local communities) or to engage in activities against the company.

Sudden retrenchment can lead to company–community tension

Companies inevitably deal with retrenchment — sometimes of large groups — of employees, either their own staff or contractor staff. When a company has a large start-up construction phase before operations begin, many job opportunities come to an end once the construction is complete. Many company managers consider the end of a temporary contract to be simply a business transaction.

Even when communities had repeated warnings from the company that job opportunities were coming to an end, they say they were not prepared for what seemed like the: sudden loss of hundreds of jobs. They say they find it hard to adjust to lower income levels, especially after getting used to plenty of money floating around. When the company retrenches without seeming to make any effort to help the affected employees maintain their incomes, community outrage is a real possibility. Sudden retrenchment is seen as especially unfair when communities know that a company is hiring others at the same time, and when the people they hire are from outside, or when new hires have used political connections to get the job.

"We are dealing with an employee who is very well connected to local politicians, whom we need to get our expansion plan approved. We have evidence that this guy is involved in corrupt practices, which is known in the community. The issue is that if we fire this person, it may create additional obstacles getting the political support we need. On the other hand, if we continue to employ him, local communities think we are unfair. And, they point out that, if we allow our own staff to cheat even us, it is evidence that the same staff will also cheat the community."

(Managing director of an oil company)

Options for getting it right

What options do managers have to ensure that their hiring and employment policies do not create or feed into tensions?

Maximize short–term employment opportunities for local people

Communities are generally keenly aware that very few of them can meet the company requirements for skilled or managerial positions. They accept this, provided the company demonstrates that it is making efforts to increase the chances for local people to gain the jobs for which they are qualified. If local people observe that none of them has access to company jobs, and the company takes no responsibility for this, this leads to resentment of the company In the community.

• Define local. Agree with local communities on the definition of who should be considered local and who are outsiders.
• Publicly commit to hiring local community members for all jobs for which they are qualified. Increasingly, companies adopt a policy to fill 100% of non-skilled positions with local people. Include requirements for local hiring for contractors through contractual clauses.
• Take responsibility for hiring all non-skilled labor for contractors.
• Maximize the number of people that can benefit from unskilled employment opportunities. Use manual rather than mechanized labor where possible.

Invest in long-term local employment opportunities

A few companies have developed comprehensive strategies to ensure that local communities can qualify for skilled company jobs in the long term. Efforts to increase education opportunities are too often focused on a few bright students through scholarship schemes. Better strategies would focus on raising education standards across the board to help more local people get access to jobs (either with this company or with other companies).

• Support the education system. Provide better housing for teachers as an incentive to keep them in an area or support vocational training centers or refresher training incentives for teachers.
• Commit to local hiring targets. Designate a specific percentage of management staff to be hired from surrounding communities within a given number of years. Provide training and/or apprenticeships to ensure this target can be met.
• Help local people get officially certified for skills they already possess. One company found many skilled drivers who could not get jobs because they did not have driver licenses. By paying for their driving tests, the company helped many drivers find employment.

Increase the chances for community members, especially youth, to gain employment

Although local communities understand that they generally do not meet job requirements, they do expect the company to make efforts to increase their chances over time.

• Provide apprenticeships to youth. This targeted support helps local young people move from non-skilled to skilled positions.
• Require contractors...