Work and Salary Expectations

[jb5]

Guillo, and I'd like to know what you really mean.

You seem to assume that the companies have plenty of money and they don't want to give employees their fair share. Do you not recognize that many companies make little or no money at times? That they fight not to go out of business and have to leave all without a job? And that many companies all over the world are presently in this situation?

It's like your kids asking you for more spending money because the price of candy went up. You'd love to give it to them but you just don't have it.

 

[Guillo]

Jb5, comparing workers that actually MADE the money for the company, with a kid that asks for candy... really?

What I meant is exactly what I said, how the workers see the problem. Its not our problem to make the business for the owner. We don't go checking for the books to see how you expend money. We dont participate in the strategic decisions. In the same way that we dont participate in the profits of the company, you cant expect us to happily accept our salary to depreciate and thank you for it. Or like some do and start paying in installments during the month because they cant manage to financially get all the money together (of course, interest free). And you wouldn't believe how usual that is in smb.

I repeat, if you cannot handle inflation, why are you even working in Argentina?
There are lots of companies working in Argentina, many multinationals, that had done so for years. Perhaps you haven't thinked your business model well. Perhaps your business model can work somewhere else but not in Argentina. You cant go around the world and expect the world to change so it fits your needs

 

[jb5]

Guillo, you sum up perfectly why there is relatively little foreign investment in Argentina. If you are representative of how the average employee thinks, and you seem to be, very few companies can run successful businesses in Argentina.

A good analogy here is the auto workers in the US 2 decades ago. They had enjoyed ever rising salaries and had powerful unions to protect them. But the Japanese and others were building better cars and could do it cheaper. The auto companies could not pay those high wages and stay in business. The employees did not want to hear this. They not only wanted to keep their high wages but wanted to guarantee the next generation would get them.

The results are history. The unions had to make deep concesions to keep the small fraction of jobs left in Detroit. Most jobs are gone. Unemployment in Michigan has made it a depressed state for decades now with those that were formally solid middle class now living in poverty. The unions didn't get that the companies weren't bluffing, they couldn't
survive without employees having a team attitude. They all needed to figure out how to build better cars cheaper together, and everyone needed to endure some pain. It's been done successfully in other industries since, as unions now are more prone to accept reality.

The French are presently grappling with similar issues. After decades of watching other European countries having growing economies while theirs stagnated, they finally elected a president who vowed to fix theirs. Yet individual pain is something they are unhappy with, like most they'd prefer to have prosperity with no personal sacrifice and it's painful to learn that's impossible.

I think the Argentines will have a similar path to those in Detroit and France. They will fight and feel justified in insisting they deserve what they've had in the past before they accept that the global economy has changed things, and the unfortunate reality is that that won't be possible.

Guillo, until you and most Argentines see that making your employer successful IS your problem, Argentina will not attract the foreign investment needed to ever be stable. You are limiting your and your children's options and not moving the country in the way your neighbors have moved theirs.

For you personally, I hope you move into management so you can look at the books and make strategic decisions. I guarantee your attitude would change overnight when you see how difficult it is to run a profitable organization while you labor cost is out of control.

 

[amat]

What I really mean is very simple. Companies can not give everyone a 30% raise and still remain in business. With out of control inflation and unhappy employees, companies will close their doors. Employers like me will not expand in Argentina, we will choose one of the many countries without crazy inflation where we can afford the workforce.

Argentina is well known to be a bad place to do business and many companies pass over it and choose more stable countries for a S America base. So Argentina continues to have a huge unemployment problem. When Citygirl says her company will not bring new work to Baires understand there are thousands more companies who've made the same decision. And thousands that have packed up and gone to neighboring countries taking all of their jobs out of Argentina.

So like many, Citygirl sits in her Baires office wondering how she keeps employees happy and motivated while her corporate headquarters tells her there's no way she can give big raises in a global downturn. They tell her she's not getting a raise, those above her are not getting raises and that they're fighting to keep alive in very trying times. If her staff is unmotivated and it shows in their work, there's a good chance that headquarters will simply shut the operation down and Citygirl will be off to run that business in another country.

At the same time, organizations like mine, which see opportunities in AR, are deciding they are too risky. If inflation will make it impossible to keep employees happy, that's a nail in the coffin when added to the already difficult process of doing business there.

This is all a terrible shame and continues to assure that Argentina will not have a stable, growing economy. Its a catch 22 because Argentina desperately needs foreign investment
To produce stable, well paying jobs.

You hit the nail on the head. After just a few years, my company is now leaving Argentina due to the inflation/rising costs. It's simply not sustainable for us and doesn't make sense to stay. Sadly..

 

[starlucia]

as an american, and therefore presumably quite comfortable with the idea of capitalism, reading through the posts where people are dumbfounded that workers expect pay raises that keep pace with inflation blows my mind. getting a raise that doesn't keep pace with inflation is actually a pay cut and frankly, a slap in the face. are you people serious about this?

fwiw, in the US working for eight years i received AT LEAST an inflation-based raise (about 3%) every year. the one year i was at a place where we didn't the entire staff almost quit.

Right. A raise that kept up with the inflation rate of 3%. Remember that in Argentina, we're talking about inflation rates of 30%. It's another whole galaxy.

 

[fifs2]

For you personally, I hope you move into management so you can look at the books and make strategic decisions. I guarantee your attitude would change overnight when you see how difficult it is to run a profitable organization while you labor cost is out of control.[/quote]


Last year we brought a new ops member to the mgmt team who shared her thoughts that the staff believed we were making min. 50% profit per month..they had no ideas about OH like rent, cleaning, shredit etc never mind taxes...having such a person on the mgmt team helps to readdress the employee myth of the employer creaming more than the cream...

 

[TrevorCito]

After reading the excellent posts on this thread I would like to add my perspective on the situation.

Several threads have mentioned that the attitude expressed by employees is at odds with management and that there is a general lack of understanding between employees who seem to expect pay rises over and above inflation and management whose goal is to generate a profit. I believe the problem stems from an incompatibility between socialistic and capitalistic values within the workplace.

While it is a democracy, Argentina at its heart is a socialist country where unions are able to dominate companies and hold them to ransom, close of highways to the airports, demand unreasonable salary increases and the like. Free market forces are dragged down by government policy to the point that it is almost impossible for companies to operate efficiently and "red tape" forces companies to expend a disproportionate amount of resources on legal compliance (tax compliance, returns, legal costs, employee costs above salaries). To make matters worse, an inefficient legal system makes speedy legal resolution impossible and employees demand higher salaries without even attempting to understand the environment in which their company operates and the legal obligations under which it exists.

So, with this backdrop in mind, how can two diametrically opposed forces, capitalism and socialism in the workplace, survive and coexist? How can socialistic employees coexist and be happy working for capitalistic employers? Well, they can't, not without a significant shift in perspective on the part of the employer or employee.

A HR strategy commonly employed by large legal firms and IT consultancies around the world to address this problem has been to change the culture and values of the workplace and workforce. They (HR) identify and hire employees with 'capitalistic' values more aligned with the profit motive and reject socialistic values. In other words, they don't employ people whose values are at odds with capitalism. In addition, employees are rewarded based on performance thereby having a vested interest in the success of the company.

Legal firms use the partner concept as a bone to attract and promote the shining stars of the legal profession. Being made 'partner' means that a person has worked, generated profits and has been rewarded for their efforts. It also means that they carry a legal obligation to share liabilities should the company fail.

A few ideas that may help overcome long term issues in the workplace related to salary and job satisfaction:
- Use key performance indicators to measure and reward employee performance. There is much written about KPI's... search google for more info.
- Transfer responsibility for company success to the employees. Employees must be aware that their collective actions can make or break a company and that if it is profitable they to will be proportionately rewarded.
- Ensure that company values align with employees values. If the company is highly capitalistic then only hire capitalistically oriented employees. If the organisation is socialistic by nature, only hire employees with socialistic values.

There is much more that could be written on the subject but I'm out of time.

 

[Guillo]

I think you are all missing a point. You cant base your business on the idea that employees will be understanding of your bad business decisions or plans. And like I said, working in Argentina means having a plan in place to handle inflation.
You keep thinking that employees will happily work with a depreciating salary, heres a newsflash for you: they wont. They will either will be unhappy or leave. Is not unlike the way you do business: if the conditions are not to your liking, you can either adapt or leave. But you won't be staying in the country happily and go applaud the government or whatever.
And you keep talking about problems with the employees and their sense of entitlement while trying to maximize profit by cutting employees income by letting it depreciate, as if you are also entitled to make a profit under any situation.
You will find a lot of reasons why Argentina is different to the us, and hopefully that's part of the reason why you are here. And it doesn't matter how much of a capitalist you are, you won't be able to keep employees happy if you don't reward them the way they think they should be. At most you will keep them while they try to find something else. Let's see you trying to function without employees.
You keep projecting values of the us into Argentina, and it's just not that way. The us is not the center of the world. Not all of the world will bend over backwards to insure your company is profitable on detriment of the rest, like employee rights. It's not a sense of entitlement, its entitlement, and it's on law and on the constitution.

 

[citygirl]

A couple points Guillo:

"And you keep talking about problems with the employees and their sense of entitlement while trying to maximize profit by cutting employees income by letting it depreciate, as if you are also entitled to make a profit under any situation."

Well - not entitled to make a profit. But making money is the reason any company exists. That's why people start their own businesses - to make money. Not to simply provide jobs out of the goodness of his/her heart And if the reason for having a company goes away, the company goes away. And you keep talking about maximizing profits. Again, the vast majority of us aren't talking about multi-national businesses with huge profit margins. Most of us are small businesses, doing what we can to get by.

You will find a lot of reasons why Argentina is different to the us, and hopefully that's part of the reason why you are here. And it doesn't matter how much of a capitalist you are, you won't be able to keep employees happy if you don't reward them the way they think they should be. At most you will keep them while they try to find something else. Let's see you trying to function without employees.

I would flip this comment and direct it back to you. How do you think employees will function without jobs if the company decides to close its doors and either move elsewhere or shut down? Both sides can and will lose at this game eventually.


You keep projecting values of the us into Argentina, and it's just not that way. The us is not the center of the world. Not all of the world will bend over backwards to insure your company is profitable on detriment of the rest, like employee rights. It's not a sense of entitlement, its entitlement, and it's on law and on the constitution.

You are entitled to rights under the law, for example not having a hostile workforce, not to be fired because of discrimination or without cause. You are entitled to holidays and vacations and such. You are entitled to a safe workplace. No where does it say you are entitled to a company giving you X % raises every year or covering the cost of inflation. It's very important that you clearly delineate between your rights (to all the above mentioned things) and what you want/expect (a salary augmentation that keeps track with inflation). There is a BIG difference between those two things!

 

[jb5]

Citygirl, I think it's important to note that even multinationals can not keep pace with Argentine inflation. Being big doesn't mean you have a huge profit margin.

This brings me to the real question: is any employer keeping up with inflation? Does anyone know anyone who got a 30% raise recently?

And Guillo, may I ask what type of company you work for?