In planning a labor program, the implementing agency needs to take into account the sequencing of different options, and the right timing and sequencing can be critical to achieving a successful outcome.
As the examples of South Africa and Tanzania (boxes 4.2 and 4.6) illustrate, major PPI reforms often take time to implement. In such circumstances the implementing agency can start with soft options, progress through voluntary programs, and adopt compulsory redundancy if necessary. Figure 4.2 illustrates such a progression.
Although this Toolkit focuses on work force restructuring prior to PPI, the sequencing of options can extend into the post-PPI period. For example, in the mixed approach adopted in Brazil's federal railway reform the sequencing of activities was planned in three phases:
Where PPI is not urgent, a sequenced labor program starting with soft options and continuing over a number of years can be envisaged.
In the event, the concessionaire was able to quickly identify the number of phase 2 involuntary redundancies that were needed, and labor restructuring was completed before privatization.
The sequencing outlined in figure 4.2 may only be appropriate where reforms are not seen as urgent. This in turn will depend on the level of overstaffing, the political context for reform, the urgency of PPI investment, and government's overall strategy for private participation in infrastructure. Where the need for infrastructure sector reform and investment is urgent, it will be necessary to bring forward early retirement and voluntary departure so that these are implemented at the same time as are soft options.
The speed at which the implementing agency can move in the early stages, however, is often constrained by:
