Thursday, May 26, 2016

Retailer, Hotelier: Good guy, bad guy

It was the queue of the hopeful. How many of them were there? Hundreds. They went in their droves, enticed by the search for "dynamic, committed, enthusiastic" people of a certain (young) age. Such is the recruitment lingo. When did employers ever wish to take on apathetic, uncommitted, unenthusiastic staff? Once upon a time they probably did. A time when no one much cared for anything other than the pay packet regardless of whatever drudgery was performed or expected.

They were queuing in Madrid last October. Hundreds. They weren't after jobs. They were there to buy. In the capital city's Gran Via, Primark had come to town, and Primark shopping fever had taken over. But jobs with Primark were what mattered last week to those who had waited patiently to hand in their pen drives with all relevant information at the offices of the Balearic Confederation of Business Associations.

Primark will open in September and not towards the end June as had been initially said. FAN Mallorca Shopping, the curious name of the new commercial centre, will not be ready until then. For those queuing it might as well rain until September. Then the sun will shine. Assuming they are the lucky ones. And when the doors of the shopping centre finally open, there will be a tidal wave of shoppers. The roads will have been gridlocked. There's more to FAN, much more to FAN than Primark alone, but it will be the Irish retailer attracting the greatest fan base, if the Madrid experience is anything to go by.

The jobs though, what about the jobs? How much might the lucky ones earn? In Madrid the labour agreement was for a "competitive salary package" for the dynamic ones. The typical sales assistant maximum is just over 15,000 a year - twelve months plus three extras. Over half of the staff, however, are not on full-time contracts. One worker, quoted in a report by the "El Confidencial" website, said she was on 700 euros for a 30-hour week, though this seemed to be for a temporary contract.

Retail jobs are like many in the tourism industry. They are not highly paid. The Primark base salary for full-time employees - 15,247 euros per annum (quoted in connection with the Madrid store) - is virtually identical to the agreement Lidl came to earlier this year. It has a guaranteed fixed hourly minimum of 8.50 euros per hour: 15,257 euros for an annual maximum of 1,795 hours, five days a week. Lidl has also agreed to have a 75% minimum of its staff on full-time contracts.

This doesn't match Mercadona, though. It has 98% full-time contracts. Its base salary is 15,160 euros but it adds two extra months to this depending on performance. It also rewards loyalty. Length of service and corresponding increases in salary mean that it has 90% of staff earning 1,430 euros after tax plus the potential two additional months. Mercadona is looked upon as one of the best employers in the retail sector.

The regional government, the Council of Mallorca and the town halls have an at-times awkward relationship with retailing. The current moratorium on new developments is an example of this and is aimed principally at larger retailers. Yet they will all know that these larger retailers create employment and, as can be seen with Mercadona in particular, this is pretty stable employment. It may not be highly paid, but that is how retailing tends to be. Mallorca's no different to anywhere else in this regard.

Where the public authorities really run into a problem is with seeking to safeguard the smaller retailer and defend it against the voracious appetites of the large multiples. A case in point has been the to-ing and fro-ing over declaring (or not) zones of high touristic influx. Say yes, and there is far greater liberalism for large store opening hours. Say no, and there is not.

But generally, and here is where the government and others let slip their begrudging acceptance of the large retailers, there is no antagonism implied when it comes to terms and conditions of employment. Yes, the government keeps banging the drum for greater "quality" of employment and higher earnings, but the retailers fall into the category of the "good" employer. Mercadona is a prime example.

Contrast this with the general antagonism towards the hoteliers, with Podemos the most ferocious of critics. True, there are issues with maids and some other categories of employee, but the attacks are certainly not always justified. The government is toying with the star ratings being modified to reflect this so-called employment quality. But would such an attempt at labour engineering work? Can the hotels really be blamed for offering contracts that are not in the Mercadona league when it comes to being full-time? It's the seasonality, stupid.

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