eBusiness Weekly
Peace Sithole
In a rapidly changing Zimbabwean economy, currency fluctuations can have a significant impact on organisations and their workforce. HR practitioners play a crucial role in adapting to currency changes, addressing issues such as negotiated collective bargaining agreements (CBAs), payroll concerns, tax implications and more. This article explores the key challenges faced by HR professionals and offers practical guidance on how to navigate them effectively.
Negotiated CBAs
Currency changes can pose unique challenges for organisations with already negotiated CBAs. In such cases, HR practitioners should proactively engage with employee representatives and unions to discuss the potential impact of currency fluctuations on wages, benefits and other provisions.
Renegotiating or amending existing CBAs may be necessary to align compensation packages with the new currency reality. Transparent communication, collaboration and a focus on maintaining employee trust are vital during this process. HR should work closely with legal counsel and ensure compliance with applicable labour laws and regulations.
Payroll Issues
Currency changes can complicate payroll administration, particularly for multinational organisations with employees in different countries. HR practitioners should collaborate with finance and payroll teams to assess the impact of currency fluctuations on salary calculations, tax withholdings and fringe benefits.
They should review and update payroll systems to ensure accurate conversions, implement necessary adjustments and communicate any changes to employees in a clear and timely manner. It is also crucial to provide support and guidance to employees who may have concerns or questions regarding their pay and benefits during the transition period.
Tax Issues
Currency changes can have implications for tax calculations and reporting. HR practitioners should consult with tax experts or engage external consultants to understand the tax implications of currency fluctuations on employee compensation, benefits, and related payroll taxes.
They must ensure compliance with tax laws, including withholding requirements and reporting obligations. Additionally, HR should communicate any changes in tax regulations to employees, provide guidance on the impact of currency change on their tax liabilities, and facilitate access to professional advice where needed.
Other Considerations
Beyond negotiated CBAs, payroll, and tax issues, HR practitioners should address various other challenges resulting from currency changes.
HR should provide comprehensive information and training to employees about currency fluctuations, their impact on compensation, and any necessary adjustments. This can help alleviate uncertainties and foster a smooth transition on the other side HR should assess existing vendor contracts and agreements to identify any currency-related clauses and negotiate revisions if required.
This ensures transparency, minimises financial risks, and maintains strong supplier relationships. Internal Also of paramount importance is effective internal communication it is crucial during times of currency change. HR should keep employees informed about the reasons behind the currency shift, the organisation’s response, and any changes that may affect their employment or compensation.
Currency changes present HR practitioners with multifaceted challenges, ranging from negotiated CBAs to payroll and tax issues. By proactively addressing these challenges and engaging in transparent communication, HR can help organisations navigate the transition successfully while maintaining employee trust and satisfaction.
Author Peace Sithole, Ministry of Health Bcom HRM Dip HRM IPMZ Dip Payroll Dip Education Executive Labour law,OHS,Human Resources Metrics and Analytics, Executive certificate in Project Programme Monitoring and Evaluation. Contact 0773474899
