03 June 2010
Workers of the world
Professor Fang Lee Cooke. Photo: Carla Gottgens.
The suave banker wears a 100 per cent Egyptian cotton shirt, designed in France and made in Italy. He politely receives your application, promising "support 24 hours a day, seven days a week". The shirt is made by Chinese workers and the call centre is in India.
For consumers, the globalisation of labour is something that is out of sight and, mostly, out of mind.
Production has moved dramatically from west to east and from north to the south. Increasingly, off-shoring, out-sourcing and international supply chain logistics are hallmarks of a global economy that creates winners and losers at both ends.
For business and management, globalisation presents complex labour challenges.
A skills shortage, aka talent war, is a problem common to both developed and developing economies, says RMIT human resource management and Chinese studies expert, Professor Fang Lee Cooke.
"It means positions either go unfilled or filled by someone less qualified," says Cooke.
"On the flipside, firms can’t retain qualified people as they keep getting poached by competitors. This is a spiral that’s made worse by reluctance to invest in training.
"It happens at the top end, in professional roles like investment banking and insurance, and also on the managerial side, where there is a chronic shortage of mangers with international exposure."
At the lower end, intensified competition is driving costs down, degrading terms and conditions.
"Exploitation is rampant in manufacturing sweatshops, with protection coming by way of sanctions and, more recently, international consumer groups like Fair Trade," says Cooke.
Some dimensions of globalisation are misunderstood.
"There’s a misconception that workers are dependent on local opportunities. Currently, we are seeing Chinese workers and engineers in Africa, just as we see Polish workers in Ireland."
Prato, near Florence, hosts the largest Chinese migrant community in Italy for its fashion industry. There are more than 1,000 Chinese businesses employing more than 25,000 Chinese workers, many of them unofficial immigrants.
"Chinese migrant workers have transformed the dynamics of the textile industry which produces well-known luxury brands," says Cooke.
"Fake, semi-assembly and sweatshop labour products drive costs down and threaten the livelihood of local workers and businesses, generating conflict at times."
In 2008, Chinese immigrants in Italy sent home around 1.68 billion Euros, a significant share of the 6 billion in total Italian remittances.
So, if the shirt fits, will consumers, workers and investors continue to wear it?
Cooke believes that the successful operation of multinational firms involves more than financial capital, technology know-how and market access. Increasingly, firms require political, social, environmental and cultural capital.
"Despite popular opinion, there is a significant opportunity cost associated with moving capital, such as factory, from one country or region to another," says Cooke.
"It’s about more than just the financials. The firms that will be sustainable are the ones that carefully tailor HRM strategies to a region, and understand the wider role that they can play in host country development by practising high-quality corporate social responsibility."