Compensation attracts employees, encourages productivity, and fosters loyalty and longevity. But, how much should employees really be paid for their services?
This January 26, 2018, Rethink Staffing launched itself as a "Fair Trade Call Center and Labor Outsourcing Company." Disgusted by the silent injustice that lurks inside the towering offices of BPO companies, Mike Dershowitz, CEO of Rethink Staffing, made agent happiness and socio-economic progress in the lives of employees the top priorities in the company agenda. As such, here is how a fair trade call center like Rethink Staffing determines fair pay.
- Men and women are paid equally for the same type of work.
In the US and the UK, men and women in the same workplace are given “equal pay for equal work." The same goes in Philippine jurisprudence, which states that "persons who work with substantially equal qualification, skill, effort and responsibility, under similar conditions, should be paid similar salaries." Included in the compensation are salary, bonuses, overtime pay, reimbursements for business travels, insurance, and other benefits.
- Salaries are higher than the market rate.
While it's true that the reason for outsourcing is to reduce cost, paying employees above the going rate is nothing short of an investment. Besides, a $9 per hour rate goes a long way when converted to Philippine peso, thanks to currency arbitrage. This is why agents at a fair trade call center can afford to send a sibling to school or finance the construction of their dream house, and essentially lead healthier, happier lives.
In Manila (NCR), the minimum wage rate (MWR) is only Php 475 to Php 512. In Iloilo (Region VI) where anyone can easily put up a fair trade call center, the going rate ranges from Php 271 to Php 323.50.
Data from www.nwpc.dole.gov.ph
Compensation packages with a starting pay above minimum wage and a regular pay above middle class range make a difference. Employees perform more satisfactorily (lower daily absenteeism rate, lower annual attrition rate, greater productivity, and better quality of work). Not to mention that it attracts the cream of the crop to join the company.
- It abides by the law.
Foreign-owned companies are expected to follow the labor laws of the countries they are operating in. Fair pay means companies provide compensation to employees at a rate that's no lesser than what the State thinks is due to their citizens. In the Philippines, in addition to the salary, the basic benefits as directed by the law are:
- Social Security Systems (SSS) Contributions
-mandated by Republic Act No. 8282 or the Social Security Act of 1997
-provides protection such as disability, maternity, old age, death, financial difficulties, and other contingencies
- National Health Insurance Program (NHIP)/ Philippine Health Insurance Corporation (PhilHealth) Contribution
-mandated by Republic Act 10606
-provides a socialized health insurance program
- Home Development and Mutual Fund (HDMF) Contribution
-mandated by Republic Act No. 9679 or the Home Development Mutual Fund Law of 2009
-provides a saving system for housing
- The 13th Month Pay
-mandated by the Presidential Decree No. 851
-The employee who has been working for not less than a month in a company shall receive a bonus salary equivalent to one-twelfth of his annual salary. This should be paid not later than December 24 of every year.
- Service Incentive Leave
-covered by Article 95, Chapter III of the Labor Code of the Philippines
-An employee who has rendered at least one year of service is entitled to five days of incentive leave with pay.
Employees are also entitled to night shift differential pay (Article 86), overtime pay (article 87), weekly rest days (article 91), compensation for work on a rest day, Sunday, or holiday work (Article 93) among others.
In addition, employees should be paid in cash, legal tender, or through a bank, and at least twice a month with an interval no longer than 16 days.
- It’s more than just the money.
Direct compensation refers to the salary and the benefits, and it’s what formally appears in the contracts. However, indirect compensation has an impact just as powerful as a good salary, if not more, on an employee. This includes the work culture, training and development courses, workplace relationships, and how much of the company’s values and principles are shared by the employee. According to Harvard Business Review, why clients stay will depend on the job satisfaction and the work environment.
However high a salary is, employees will obviously not stay at a workplace where they are abused physically and emotionally. If they are happier at work, they are less likely to transfer over to a competitor, saving companies from additional hiring and training costs. Employees will value their jobs more, and work more efficiently and productively.
What constitutes fair pay is an ongoing economic, moral, and philosophical dilemma among small and big companies. In the simplest sense, it means that a worker should be paid enough so he and his family could meet their basic needs. However, employees are humans, not machines that run on mere fuel or code. Understanding that each has unique temperaments, motivations, and values will pave the way for better employer-employee relations.