May 06, 2008

Back to the future

What does the manning department of an ethically run shipping company want from its seagoing staff?

A good hardworking officer who completes his contract unless there is a good reason to come home early- and one who stays with the company forever. A person of integrity, sobriety and responsibility. A person who accepts market wages and normal seniority and bonuses, and is fair in his dealings with the company. A person who rejoins as agreed, and is otherwise reasonable.

So now, the mirror question to my first one; what does a good, responsible and ethical officer want from a shipping company?

A good setup which offers him shorter contracts than its peers, pays his agreed wages on time, and responds appropriately to the market at appropriate intervals. A setup of integrity and responsibility, which has a decent number of safe and well maintained ships, which treats him fairly, relieves him on time and does not waste his time on leave. A setup which employs him forever. A setup which offers him a ship as agreed after leave, and is otherwise reasonable.

Now for just two quick comments on the above:

· One, it seems to me, looking at the last few paragraphs, that there is a lot of congruence between what a company and a mariner want from each other. This is heartening. Perhaps the twain can meet after all.
· Two, as my wife will gleefully attest, even threaten- nothing is forever. So let’s take forever to mean long term. The rub lies here, though. Everybody, seafarers and manning departments alike, would love to sit back and have everything running almost on autopilot- people reporting back on time, ships being assigned promptly et al. Hiccups aside, (ship delayed? owners not happy with the officer or vice versa? Officer has last minute family commitments?) this does seem to be the way to go. But the million dollar question has to be answered first- given a contractual relationship, how can forever be attained?

I would have proposed substituting a contractual relationship for a permanent one, but the biggest negative there is the Income Tax Act. Seafarers were probably not meant to be beneficiaries; but they (at least the ones working for foreign companies) enjoy tax benefits which would evaporate if they became permanent employees. Indian Shipping Companies are hamstrung in comparison, which is an anomaly that needs to be addressed urgently. The fact that industry representations- both formal and informal- to various Governments have not yielded any results for years testifies to the weak lobbying skills of the industry.
Be that as it may, let us assume that offering seafarers permanent employment may mean that their post tax wages take a big hit, and is not therefore easily possible.
(Other issues with permanent employment: Many seafarers may not like the lower monthly wage this entails, even as the annual wage remains unchanged. Many will not like the restriction. Some seafarers will be suspicious- what if the company doesn’t deliver on promises? Some companies may not like the permanent tag and the complications it creates with labour laws, employee provident fund requirements and such, which effectively raises costs. )

Back to the future.

The only recourse then , if ‘forever’ is to be attained, is to define a path wherein a desired seafarer employee gets obvious benefits of a long term association, and sees a clearly defined path to this end.

So far, these ‘benefits’ have translated mainly into seniority allowances and xth year wage scales. Unfortunately, this has been ad-hoc; xth year scales are often, even usually, negotiated by new entrants to a company, making the entire concept of seniority meaningless. In one well known company, I was so disgusted with finding out that a relatively junior Master had been granted higher wage scales – after I had accepted spiel about ‘we are very rigid about seniority allowances”- that I threatened to quit. I am still of the opinion that our profession should count for something greater than haggling in a fish market, or buying potatoes on the roadside.

I tend to think that the solution to the ‘forever’ question has to be more creative than salaries anyway, so for the purposes of this article am ignoring the ‘wages last revised on’ option. It is a bullet which has traveled its optimal distance or a soap bubble which has been blown up enough- at some stage, the business will become unviable and the bubble will burst, leaving our faces wet.

In short, I am proposing this: All Ship Ownership Companies (and here I take ship management to be an integral part of ownership, even if they are separate entities) should have a well defined, transparent and formal system in place for evaluation, identification and subsequent training of seagoing staff with a clear objective of career advancement into managerial positions ashore. This proposal assumes that a long term association between a seafarer and a shipping company is not only possible; it is desirable and to mutual benefit- and so is clearly a prime objective.

Firms can well have a programme wherein the best performing officers can be identified, and put on a ‘fast track’ for promotions and shifting ashore; such a public programme, in my view, would go a long way towards healthy competition. A leaf could be taken out of the book of a few long standing MNCs- I believe Lever’s (now Hindustan Unilever) have had such a programme for years. How do they do it? The devil is in the details, but the details are not rocket science.

Yes, there will be some fallout- other officers feeling disgruntled or sidelined, for one. But this has to be managed- and well- if a firm has to retain staff and improve quality at the same time; right now most shipping companies employ what they can get. I also believe this fast track approach will do much towards employees trying harder- and staying longer with you, the clearly defined objective being ‘moving ashore’. What the management types call a win-win situation.

A clear definition of the path is very important. In it’s absence, the whole exercise seems prone to favoritism, subjective and arbitrary. For example, a Third Engineer needs to clearly see where his long term association with the company can benefit him, and after how long- provided he continues to perform- and what those parameters for performance evaluation are.

In my opinion, this industry has failed here so far. Operational and technical managerial jobs automatically lead to management jobs in most industries. Except shipping. Yes, it is a pyramidal structure, sure- after all if all the Master’s came ashore where would they go? And who would run the ships? - But this pyramid is hardly unique to this industry. All businesses have this, and so using this reasoning is lame.
Besides, a pyramidal structure ensures competition, which raises the professional bar. A good outcome, I would have thought.

Surely, there are some companies which identify good officers for a shift ashore. But too many select people in a ad-hoc manner- and nepotism, regionalism and sheer unprofessionalism is alive and kicking in these selections. Wouldn’t a transparent and formal system be much better?

The fact is, also, that seafarers and companies alike are hamstrung by the contractual nature of employment and are scattered worldwide. Multinational and multicultural crews add to this eclectic mix of issues; we consequently get paralysed by these complexities and take recourse in the well trodden path, the one with least resistance. As long as the going was good, this system kind-of worked. No more, and not really.

Managing this effectively at higher levels of attrition will continue to be a nightmare unless individual companies retain people they want. In this context, my suggestion above in an attempt to address this issue may work, or it may not.

If it doesn’t, we haven’t lost anything and we will be back to square one.
If it does, however, you may see Ship managers beating this drum, instead of the old and jaded ‘wages last revised on’ one.

Somebody just has to try it, is all.
The rest of us, to quote Thomas Paine, have to either “Lead, follow, or get out of the way.”


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