I get married, but I am still single… the reality of the labor reform in Mexico

Note published on March 4 in El Economista, Capital Humano [Human Capital] Section by Blanya Correal Sarmiento.
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Companies today face a great challenge in face of the labor reform. 85% of the collective bargaining agreements that companies held in Mexico were protection agreements, an understandable phenomenon in an environment in which some union organizations used to call strikes upon the signature of agreements of companies that did not hold a collective bargaining agreement, even though the union did not actually represent the company’s workers in reality.

This led many organizations to choose to sign a “paper” agreement with a less fearsome union. In reality, however, this “protection” entailed that, in practice, the latter union did not participate in the collective life of its members either and it did not defend their rights. For this reason, only a few more than 3,000 collective bargaining agreements have been legitimized, out of the 530,000  that are registered in Mexico.

Faced with this, and in the final stretch of the implementation of the labor reform, many are still seeking to understand how to “turn”  freedom of collective association “around”, trying to continue with a union that continues to be uninvolved in their representation. It is like wanting to get married but remaining single! We do not want unions to “step in” and hinder the way in which we operate; however, we are reluctant to transform the workplace culture.

Beyond the legal issue, the labor reform creates an invaluable opportunity for developing a different culture within companies. The participation of workers involves a more mature attitude, that takes workers into account as the adults that they are, making decisions about their own conditions and representatives.

Nevertheless, even though this sounds logical and attractive, we find ourselves in a reality in which opportunism rules, in which today we see the emergence of several union leaders with  promises that are unfeasible to be complied with by companies, and which become siren songs for workers who for years have had conditions of salary inequality, long working hours or, like now, in the middle of the pandemic, the loss of their job stability.

The problem is not actually the reform, the source cause lies in the capability of anticipating these changes and capitalizing them in a positive manner for the business. And for this we require a deep transformation in the way in which we conceive employment relationships.

We have to acknowledge that the extreme flexibility and the low cost of labor that we had in Mexico have represented a very attractive condition of competitiveness for foreign investment, but, at the same time, the price was paid by the workers.

An example of this is the salary gap between companies within the country. In accordance with numbers provided by the OCDE, in average, a director earns each month the equivalent of seven times the salary of a person at the base of his same organization.

What to do in face of this reality? The first thing is to acknowledge that we need to truly understand the needs of the worker and improve their working conditions. This will surely affect the cost of operation of a business, but, at the same time, it will have a positive impact on productivity and on the sustainability of labor peace in companies.

The second thing is to work at the most sensitive level within an organization, which consists of its middle management, who are under daily pressure for improving results, achieve efficiencies, have an influence on human teams and, at the same time, they share labor conditions that are very similar to those of their collaborators, therefore becoming the “ham of the sandwich”.

Improving the quality of middle managers is not only a training task, it consists in truly ensuring that they receive the treatment and priority that we want them to provide to the base. Achieving this will go beyond one-time actions, it must be the result of a deep transformation of the way in which we conceive the dynamics of a company. It is paradoxical that the best leadership is developed in the most complex contexts, and this is because there is no other option.

Lastly, and once and for all, we need to understand that priorities have changed, that the sustainability of the business no longer depends only on the market component, technology or cost, it is now clearer than ever that it also depends on the people, on the good or bad collective decisions that they make and on how prepared we are for this participation to take place.