Pradeep Dursun, COO of Business Mauritius: "A realistic amount is necessary, some won't be able to keep up"
Pradeep Dursun, the COO of Business Mauritius, emphasizes that salary compensation must reflect the economic realities of each sector. He notes that various labor-intensive sectors, such as manufacturing, construction, BPO, and SMEs, are already struggling to bear the increasing weight of their payroll. He calls for caution and advocates for a realistic amount.
What was discussed in this initial meeting on salary compensation?
It was a technical meeting. Statistics Mauritius shared the inflation figure for the year. Now that this number is known, we will continue consultations with our members and refine our positions accordingly. Today's meeting was quite lively, with each partner given the opportunity to express their views, present their challenges, and highlight important points.
What is Business Mauritius's position?
At Business Mauritius, we have pointed out that over the last two to three years, companies' payrolls have significantly increased. This is mainly due to a substantial revision of the minimum wage and the one-off payment of a 14th month salary. We have also mentioned that authorities should consider various analyses and government reports, especially regarding wage-setting mechanisms, to align them with the new economic model.
We highlighted that practices and realities differ by sector. For example, the manufacturing, construction, BPO, and SME sectors are labor-intensive. The cost of payroll has significantly increased, and many companies can no longer absorb considerable raises.
What is Business Mauritius's opinion on the 3.7% inflation rate announced by Statistics Mauritius and contested by unions?
Business Mauritius respects institutions. Statistics Mauritius is an institution with a clear mandate: the collection of data and production of official statistics. We always align with the data presented by Statistics Mauritius regarding the methodology used, guidelines followed, and international standards applied.
For better understanding and trust in the communicated figures, we believe Statistics Mauritius should launch a literacy program for all stakeholders.
Based on the 3.7% inflation rate announced by Statistics Mauritius, what would your estimate be for the total cost of salary compensation in the private sector?
According to an initial estimate, using the 3.7% inflation rate as a basis and applying across-the-board compensation uniformly to all private sector employees, the total cost of salary compensation would be approximately Rs 9.2 billion.
The question of funding for salary compensation was also raised in the meeting. Can you elaborate?
We asked questions about the funding of salary compensation, potential formulas, and the overall impact on the economy. I must say that Minister Reza Uteem was very receptive to these points and took our remarks into account.
It should also be recognized that, depending on the sector, some have the flexibility to absorb this additional cost while others will face serious issues: cash flow problems, restructuring needs, or even being in the red.
Thus, we have requested that caution be exercised and that a realistic quantum be found that reflects the actual payment capacity of companies. Some sectors are suffering and simply will not be able to keep up. We are driven by a sense of apprehension but also vigilance. We must remain attentive to what can be implemented to consider companies' payment capacities, their efficiency, and to ensure their long-term viability.
Trade union federations propose compensation ranging from Rs 855 to Rs 1,694, citing a significant erosion of purchasing power. What is Business Mauritius's position regarding these demands and their potential impact on companies?
The unions have made their requests based on their own assumptions and calculations. None of them have provided figures based on concrete documents. They have their methods, which do not align with our methodology. They have not presented any impact assessment. They put forward generalizations and claimed that the inflation figure does not reflect reality. We are not questioning their figures, but regarding the amounts they suggest, let's allow the unions to explain how they arrived at these quantums.
