Pakistan’s inflation hasn’t just taken its toll on the citizenry, but also contributed to increasing exploitation within corporations that are now looking at ways to reduce costs at a time of shrinking margins.

At a time when the job market is also contracting, employees also have less choice when it comes to pushing back.

There is also now a growing prevalence of informal employment agreements characterised by vague or nonexistent job descriptions. This often results in employees being saddled with extra duties, leaving them with no recourse in the absence of proper documentation.

Ujala Farzan shared her ordeal, having worked at a creative agency for three months.

“I was not provided with a clear job description in my appointment Letter or during the interview,” she said.

Assigned the role of an ‘account manager’, she found herself burdened with additional responsibilities without any extra compensation. In fact, even the payment of salaries was delayed.

“We’d receive our salaries on the 17th or 18th but (they) would sometimes skip an entire month, which made it difficult for me to manage expenses.”

Faced with the challenge and nowhere to turn, Farzan made the difficult decision to resign from her position. Others did not have the option.

Overtime abuse

In the IT sector, widely regarded as being immune to domestic economic issues as the clientele can be foreign, companies are using inflation to offer excuses.

Abdullah Syed, who worked as a customer service representative at an internationally recognised call center in Karachi, shared his disillusionment with the job.

“My attraction for the job was the salary package,” he remarked.

“I was required to work 9 hours a day with one day off, but slowly they started giving me more work, and it was near to impossible to get a holiday or a replacement even in the days of emergencies,” stated Syed as he shared stringent policies that were enforced.

“We weren’t even allowed to keep our phones with us while working. It felt more like slavery than employment. I was losing my sanity every day.”

Increasing workplace exploitation is not entirely on businesses, it is a byproduct of weak regulatory oversight, governance failures, widespread corruption, and lack of accountability

Salary disparity

The education sector, which appears to be handling inflation better than most industries, has the ability to pass on the costs. There aren’t enough schools to match Pakistan’s burgeoning needs.

“It is a necessity and people never compromise on their kids’ education,” pointed out Syed Nashet Karim, a former media and branding lead at a coaching center. “I initially worked there for 3 days a week, but as I got promoted to team lead, my days were increased to 5 days, yet there was barely a 20% increment in my salary.

“HR was reluctant to even discuss these queries,” he added.

Karim highlighted the stark reality of the educational sector.

“The staff sometimes had to buy educational material from their own money.”

Eventually, he felt compelled to resign.

Inflation has become a major headache for Pakistan’s policymakers and since July 2022 the CPI-based figure has averaged a massive 26%, higher than economies where Covid had taken a toll.

Many analysts say Pakistan’s higher prices of goods and services is driven by a massive government deficit, which has compelled Islamabad to borrow more and raise taxes.

These moves have stifled demand, and contributed to decreasing purchasing power.

In such an environment, it’s the employees who have had to pay the price; work harder for less to survive.

As pressures escalate, the workforce has also become increasingly vulnerable, providing fertile ground for corporations to exploit both desperation and lax regulations.

In such a situation, it’s the companies’ HR departments should bear the responsibility. But they too, sound less than optimistic.

Ayesha Zahoor, an assistant manager human resource at Pak Bean, said the practices are becoming common.

“Low wages, unpaid mandatory overtime, and the informalization of employee contracts are among the prevalent practices,” she said.

“The intertwining factors of inflation, exploitation, and job market constraints further intensifies the situation.”

Layoffs triggered by inflation have also become an all too common tactic for businesses.

“The absence of inadequate social security measures provide leeway for HR to skirt legal boundaries and this results in widespread exploitation.”

Soha Khan, senior HR at ElectroPolymers Pvt Ltd, agreed.

“If people don’t have alternate options, they accept the situation and even stop talking about it,” Khan stated.

Workplace injustice

Inside the workplace, the situation is grim.

Javeria Younus, an MPhil in Economics and a professor at IBA, Karachi, painted a stark picture of the situation.

“The middle-income group is particularly feeling the brunt of this exploitation,” she remarked.

“With job scarcity and inflation, individuals are forced to overwork or seek additional employment just to make ends meet.”

Both the formal and informal sectors perpetuate this culture, capitalising on the desperation of job seekers.

But while inflation is an explanation, many also question if it has also become an excuse.

Is this just a pretext for exploitation?

Aqeel Baig, with over four decades of professional experience and a Ph.D. in Economics, said the current scenario is indeed, different.

“Inflation mixed with unemployment creates a surplus of labor, making it easier for corporations to exploit workers,” he said.

“Real sector corporations, facing exorbitant production costs, find it challenging to provide adequate incentives to employees.”

Baig pointed out that while developed countries have somewhat shielded their workforce from the effects of inflation, Pakistan’s situation is compounded by its high import bill.

“Imported inflation significantly increases production costs, forcing corporations to resort to cost-cutting measures.”

But none of this is something that cannot be fixed – it requires institutional reforms. Younus cited examples from Scandinavian countries experimenting with shorter working hours and stricter legislation to combat exploitation.

“Promoting an entrepreneurial culture through educational overhauls is crucial.”

Baig also emphasised the need for pragmatic solutions tailored to Pakistan’s context.

“Mitigating inflation-induced exploitation requires concerted efforts to control the import bill and protect local industries,” he asserted.

The issues are already causing a mass exodus. More than 1.6 million people left Pakistan in 2023, according to a UN report, the highest figure since 2016.

How do companies get away with it?

Corporate exploitation flourishes within a complex network of systemic challenges and a prevailing culture of impunity.

While frontline workers endure the immediate consequences, the underlying causes stretch far beyond the confines of individual companies.

A glaring absence of regulatory oversight enables corporations to exploit employees, normalising unethical practices within the fabric of business operations.

Aftab Changi, an HR professor from IoBM, said the regulator needs to step in.

“Power inequality breeds corruption, a pervasive reality across Pakistan. Those with wealth or influence often circumvent accountability, perpetuating a cycle of exploitation.

Corporations know they can get away with breaking laws confident in their ability to navigate the system unharmed.“

Increasing workplace exploitation is not entirely on businesses, it is a byproduct of weak regulatory oversight, governance failures, widespread corruption, and lack of accountability.

What can be done?

Like with most issues, the onus falls on the government to strengthen regulatory oversight.

There is a need to establish centers to educate workers about their rights and encourage them to advocate for themselves.

Individuals should be educated to ensure that job descriptions are transparent before signing employment contracts.

Moreover, there is a pressing need for managerial training aimed at fostering a supportive work environment.

Only through decisive action can Pakistan hope to break free from this cycle. There is still hope.

The article does not necessarily reflect the opinion of Business Recorder or its owners