Wilson Ng started helping the family business since 9 years old. Since then, he had dreamt to be a successful entrepreneur, one who starts great businesses  ( he has started 7) from scratch with insight, guts and initiative. He keeps his focus on growing the business by creating value-- not on politics, or wasteful distractions. He brings the same focus to community service, teaching, life and family.

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	Sunday, October 03, 2004

Hiring and Firing Workers    (on business) The World Bank funds a study every year on the Doing Business Indicators which compares the regulatory costs of business, and its regulations/enforcement across 145 economies worldwide. The study provides matrices and comparisons on how easy it is to start a new business, how it protects investors, how good it is in enforcing contracts, in registering property, in getting credit, as well as in closing a business. These are by the way, topics that you hear often from businessmen and executives in many forums.  Rightly or wrongly, many businessmen have their own perceptions of these.  It might well also to take a look what the formal study says.  One of the metrices they invariably talked about is the system that many countries and economies place to protect the interests of workers and a guarantee of minimum standard of living.  This has things to do with regulation, specifically on the hiring and firing of workers and the rigidity of the working hours. While this protects labor on paper, it increases the cost of doing business and sometimes harms the thing that it purports to protect.  It is somewhat like putting on a high price tag on a product which is supposedly aimed at getting a higher profit, but when the price tag is too high, consumers shun away and it has the effect of actually turning away business.  The high unemployment rates of various countries in Europe and the slow economic growth is traceable in part to the state's overzealous protection of the workers' rights.  In a world which is increasingly getting globalized, this indicator is studied by companies carefully, and could well be one of the more carefully studied in a nation's competitiveness index.  Nations should well study this and work out policies with the eye of not only benefitting a certain pool or segment, but on maximizing the total impact to its economy. As a businessman, I certainly know the principles of optimization - price a good that will have the greatest total returns.  But many governments are just keen on keeping increasing the price to a point when it is so hard to sell anymore, which benefits no one.  When it becomes politicized, the argument becomes only when to increase, and how much.  Sometimes more competitive economies also understand ocassionally, when things are tough, you have to decrease your prices too. The World bank Methodology which is used studies the detailed employment law and regulations.  The cost of firing indicator measures the cost of advance notice requirements, and severance payments, and penalties due when firing a worker.  The methodology is presented in a paper by Juan Botero in the Quarterly Journal of Economics called The Regulation of Labor. IN an index, Singapore and Hongkong both got 0, US got a score of 3, Canada is 4, Australia is 17 and United Kingdom 20.  Economies with a high cost of hiring and firing includes Sweden 43, India 48, and Mexico 72. The Philippines got 41.  For a complete comparison of report, click here.       4:59:54 PM     comment []   trackback []

There is always a better way to announce bad news.   (on jokes)   /* This is an anecdote I liked to illustrate that it makes a difference how you communicate bad news */    A large two engine train was crossing America. After they had gone some distance one of the engines broke down.  "No problem," the engineer thought, and carried on at half-power.   Further on down the line, the other engine broke down, and the train came to a standstill. The engineer decided he should inform the passengers about why the train had stopped, and made the following announcement:   "Ladies and gentlemen, I have some good news and some bad news. The bad news is that both engines have failed, and we will be stuck here for some time. The good news is that this is a train and not a plane."     11:25:35 AM     comment []   trackback []

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