Added by Craig Steel
Resetting economies from the inside out

How to reset economies to build a more resilient and sustainable future.

Foyer with escalator and people walking

As everyone knows, nations the world over need to reset their economies if they are to build a more resilient and sustainable future.

Unfortunately, one of the challenges modern-day democracies continue to experience is that the distribution of wealth doesn’t reach as far as it could. Adding to this, cheap money over an extended period has enabled the wealthy to get further ahead while those on wages are struggling to put food on the table.

Although it doesn’t feel all bad for everyone, the increasing cost of living highlights the fragility of our economic model. It also reminds us that unless the next generation can afford to pursue a similar path, our presumed wealth may not extend as far as we need when we’re ready to cash in.

As ESG analysts remind us, the burgeoning gap between rich and poor around the world is not only an economic failure but a humanitarian failure.

For this reason, something needs to be done if we are to avoid a breakdown in society otherwise, we’re likely to see increasing levels of unrest that may be difficult to overcome.


Differing experiences

It’s important to remember that our view depends on our personal experience. For some, the changes we’ve seen in recent years have led to the accumulation of vast sums of wealth in rapid time.  For others, however, they have been nothing short of distressing.

Either way, it’s clear there’s an increasing number of people who are finding it difficult to make ends meet as their pay packets fall further behind inflation. Add to this the modernisation of user pays systems and it’s easy to see why more families are either needing assistance or heading to greener pastures.

The fact so many of our teachers, nurses and bus drivers can no longer afford to live in our main centres is a wake-up call for the nation. However, for this to be addressed, it will require the backing of everyone rather than just the determination of policymakers.

Despite the fact that changes to employment legislation haven’t delivered the benefits their proponents promised, we need to accept the problem is here and it’s ours, if we’re to find a workable solution.

As many have said, if people in our communities can’t afford to keep a roof over their heads and educate their children, we’re on a pathway to failure. Further to this, generational deprivation will become ever more entrenched forcing ever greater numbers onto the sidelines from which no one will ever benefit.


Could organisations be the answer?

Although there isn’t a silver bullet, organisations could play a major role in our economic reset by adopting better processes to enable their front-line employees to better manage their activities.

The advantage of this is that it would not only reduce the number of mid-level managers required to oversee their operations, it would improve the services they provide as a greater portion of their workforce could remain where they’re needed.

The fact is, the vast majority of our front-line staff are capable individuals who care about the service they provide. The problem, however, is that in order to keep up with the rising cost of living, many are forced to climb the hierarchy to earn a salary to meet their expenses.

If organisations adopted better processes, it would create a more efficient and cost-effective way to keep up with increasing demand while simultaneously reducing non-productive costs.

As a result, it would not only enable those organisations to increase the relative capacity of their business but better remunerate their staff thereby helping reset their nation’s economy in the process. 


What it could look like

Imagine an organisation where everyone from the CEO to their frontline staff knew exactly what they needed to do and were empowered to do it. Where everyone’s role was similarly valued (albeit salaries would still differ) and they enjoyed the opportunity to provide it.

An organisation like this would need fewer administrators to execute their strategy as they would have a greater portion of their people either generating value or delivering on their promise to their customers.

As a result, its productivity would improve as would its profitability and/or cost allocation. Further to this, its staff would not only feel more valued doing the job they love, they wouldn’t have to climb the ranks to make ends meet.

The fact is, most service-based organisations have not only become so top-heavy that they can’t afford their wage bill, they’ve also knee-capped themselves by reducing the number of their people on the front line. This not only reduces their efficiencies, it transfers delivery pressures onto ever fewer people thereby lessening their benefits and experience which is why so many are choosing to leave.

In other words, if this model was properly applied in our councils, hospitals and government agencies as an example, it would allow them to better fulfill their purpose as they would have the workforce they need to keep up with increasing demand while at the same time, rewarding their front-line staff with a greater percentage of the wage bill so they can continue to provide the services their communities rely on.



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