In England people often start a conversation by talking about the weather. Weather makes for an easy ice-breaker. It is that common element which affects everyone in the same way. Everyone feels cold, everyone feels hot, everyone gets wet in the rain and everyone can relate to it.
Here in Karachi, we don’t have a universal ice-breaker. The class divide is so large that it is difficult to find common ground. Even amongst the “middle class” the circumstances could be quite different. In a city like ours, even weather doesn’t affect everyone equally. There are people, who spend their entire time in air conditioned houses. The thought of using a ceiling fan would never cross their mind. Then there are people who can spend their waking hours without an air conditioner but only sleep in an air conditioned room. And then there is a large segment of society which would use air conditioners a little more selectively.
So how can you talk about weather when you cannot share a common experience? It is not a binding factor and certainly not an ice-breaker. It could actually be a real divider. Have you ever said to a friend or acquaintance: “Oh I couldn’t sleep last night. We had a power failure in our neighbourhood”, to get a blank expression from them. That is when they are thinking: “Don’t you have a generator which runs at least 5 air conditioners?”.
Our icebreaker: But we have found our own ice-breaker. We talk about corruption – but these days it is a little tricky because we don’t know who is and isn’t corrupt. So we use this one selectively. Then there is good old cricket which can also work both ways. People can get a little emotional about the subject, which can take the conversation into a whole new dimension. I think the safest ice-breaker is “issues with domestic help”.
Everyone at least has a massee or a jamadar and everyone has at least something to say about it. “Chutiyan bauhat karta hai?”, “I think she is stealing?”, “I am sure he is stealing but what can I do they all steal?”. And the list goes on.
The point is that we all have difficulty managing our domestic help. We all try different things to retain them, motivate them to come on time, stop them from stealing. But nothing really works. I know people who have tried increasing their salary, putting them on a daily wage, deducting money for taking sick days. But nothing works.
The truth is that these people are so poor that whether you pay them a thousand rupees more or a thousand less they know that their lives are not going to change. I recently compared the behaviour of domestic help at home to similar workfoce employed by a large institutional employer. Their cleaners and other helpers always come on time, do not take too many breaks, do their work to the required standard and don’t seem to be constantly supervised. I was intrigued at the difference in behaviour – people from similar backgrounds, doing similar work but displaying a completely different work ethic. I decided to investigate. My first line of reasoning was that this is a large employer and therefore must be paying a lot more to its staff. To my surprise, their staff was getting at least 10% to 15% less than domestic help. The second line of reasoning was the level of supervision. The rationale being that if these guys are better supervised then they would work better. That didn’t seem plausible. In most households, a member of the family closely monitors the work being done by their help. It is impossible for an institutional employer to match the same level of supervision. I went through a long list of possibilities to explain the difference is attitude – current level of unemployment, clear job description, job security, prestige etc. But none of the factors offered a convincing enough reason. And then one day, I stumbled across it. This employer had promised its staff a small plot of land if they worked for an agreed number of years. No one had a clear idea of where this land was going to be and what it would be worth. They didn’t even know for sure if they would be able to sell it. But the promise of getting a piece of land after some years was enough for these people to do anything to keep their jobs.
Audacity of hope: They worked weekends to make up for their lower wage. They found odd jobs here and there but never upset their employer. It was incredible that they would go to great lengths to keep their jobs. So what was so special about owning a piece of land after say 10 years when you don’t know how much it would be worth and what you may or may not be able to do with it? To me the answer is HOPE – something we have so little of. It gives them hope for a better future. Hope to own their own house. Hope to make a change in their lives. Hope that they might be able to sell that land and start a small business. Hope is a powerful emotion. And if we want happy, motivated domestic help, then we need to create hope in them. At present they have nothing to look forward to. They know their lives will not change. They can work hard all their lives but they will still be poor. Their children will still need to leave school and find jobs so that the family can meet its expenses. The experience of the institutional employer shows that it is easy to create hope. We can learn from this employer and take small steps which promise a better future to our domestic staff. Paying for their children’s schooling and building a house for them are some examples of things that have already been tried. These things are however expensive and all of us cannot afford to commit to them.
Invest for them: There is another, even easier way of giving hope to our domestic staff. Invest for them! You can start by telling your domestic staff that you will set aside a certain amount of money for them each month. This money will be invested from time to time in assets which offer the prospect of long-term growth. The money invested along with the returns earned will be given to them at the end of say five years or if they leave before that, provided they leave on good terms. This process can be started with as little as Rs500 to Rs1,000 per month. The money can be invested in stocks or mutual funds where the threshold for minimum investment is small. Stocks offer long-term growth potential and a regular income stream. By some estimates, notwithstanding market peaks and troughs, stocks provide an average return of around 20% per annum. This means that Rs1,000 invested every month for five years should theoretically be worth around Rs300,000 at the end of five years. And it is not just about good returns. It is relatively easy to invest in stocks and there is no minimum investment requirement so one can theoretically buy stocks with as little as Rs500 to Rs1,000. However, there are certain practical challenges of investing in stocks. Identifying stocks which offer long term growth potential requires some investment of time. Although in Pakistan most “growth stories” are well understood and a basic exposure to stock market is enough to identify the main companies which offer good value. A slightly bigger challenge would be to find a broker that allows you to operate such a small account and at the same time offers some guidance on where to invest the money. If you already have a stock broker, you should start by speaking to them on how you can invest for your domestic staff. If you don’t have a broker, you could ask your family or friends to put you in touch with their broker. If you don’t want to take the responsibility of investing in stock for your staff, then you can simply put their money in a mutual fund. Most funds allow you to invest a minimum of Rs5,000. Mutual funds industry offers a variety of investment options and you can choose between funds that invest in fixed income, stocks or a combination of both. If you want to put the money in mutual funds, the most important thing is to identify a reputable fund. You could start by looking at funds managed by the larger banks. Most funds have a good sales team and you could discuss your investment objectives with them and they would be happy to guide you.
Returns offered by mutual funds vary depending on the type of funds. Assuming an average return of 12% per year, Rs1,000 invested every month would be worth Rs150,000 at the end of five years. Wherever you choose to invest, it is worth remembering that amounts invested regularly in carefully invested assets would result in a healthy growth in capital. And even a small amount like Rs1,000 could make a big difference to someone’s life. My old driver told me that he could buy a taxi for around Rs200,000; a cleaner told me that he could set up an electrical shop for around Rs150,000 and another guy told me that he could go abroad if he had Rs300,000.
Small steps, big difference: Benefits of setting up a simple investment scheme like this could have far reaching consequences not just for us and our staff but also for the country. The most obvious benefit would be that staff would work more diligently and require less supervision. It would give them a chance to change their lives and give them a sense of pride to know that they have worked to change their lives.
For our country, it would encourage a mind-set of saving and managing money. We currently save around 15% of our gross domestic product, which is significantly lower compared to India and China. Even a small effort to improve the level of savings would be a positive start. It will also encourage a change in mind set. In a country obsessed with short term gains and quick money, efforts like this would bring forward the benefits of planning for a slightly longer term. Small steps can sometimes make big differences. Initiatives like this, if done in a transparent way, can help to achieve a lot of good. Let us take a step to change for the better.
From the Research Desk at Abbasi Securities (Pvt) Limited
