Some companies are reducing work hours (up to 20%) to avoid massive layoffs. Would you …..
Several companies (worldwide) are temporarily reducing their work hours in order to avoid layoffs.
Massive layoffs not only sacrifice the employees (and their community) but also compromise the most important IP (intellectual property)of any organization, the investment in training, loyalty and competency.
Considering the economic outlook around the world, would you:
A) Accept a reduced work week (and pay) to stay in the company,
B) Accept but initiate job search,
C) Don’t accept (and take the risk and its consequences)
D) Resign / Ask to be layoff
Thanks for sharing your thoughts.
Tags: competency, consequences, economic outlook, loyalty, massive layoffs, risk
March 19th, 2009 at 8:58 am
There is no universal answer to this and a poll result is not indicative without further information regarding the people who answered the poll.
High performers with a great track record will most probably leave the company and find something else, while people with little transferable skills will cling to their companies, knowing that their chances in the current market are slim.
So it depends who is answering.
Andreas Bastian, Dr.
March 19th, 2009 at 8:59 am
Edison…you should field this question to western companies in China…you will find some quite remarkable answers…reason being certain regulations in labor laws and contracts with employees that have a lot of power…
But to give some feed back, according some economists based and knowledgeable with this subject in China, workers are expected to continue to be laid off building to some 40 or so million unemployed toward the end of the year…because of the labor laws and contracts I mentioned and if they work for a western company they can potentially pretty much hold you to ‘ransom’ and will choose any one of the 4 options you mentioned…
D.Boost
March 19th, 2009 at 9:00 am
I understand and agree with the idea of 20% reduction of hours and income if it means that staff with the companies and there own prospects are important to them. It ensures that the IP is retained and the cost of maintaining the staff under trying conditions is paid back when the upswing occurs. Cost of recruitment and retraining to the existing skill level or higher is probably greater, not counting the hidden cost of loyalty between employee and employer. No one is immune from the conditions that exist. So my brother and I have already accepted from our respective companies and would continue to Vote for Prospect A.
Martin D Smith
March 19th, 2009 at 9:01 am
A large hotel company asked their employees,to choose layoffs or reduce to a 4 day work week. All saved jobs and took the four day work week. It’s tough but they have all have jobs and most importantly benefits.
Wendy (Gamache) Smith
March 19th, 2009 at 11:50 am
Our company has experienced this issue and we took 10% pay cuts
In Ontario there is a program call WORK SHARE that will supplement the days off you take so the Managers took a 10% pay cut and the rest of the employees took 1 - 2 days off a week and Work Share paid 55% of their missed pay.
More info. can be found a http://www.servicecanada.gc.ca
Patricia Mazurek
March 19th, 2009 at 11:51 am
Particularly in these difficult days, where the crisis is everywhere and not only in a specific niche or market, I would vote for A.
Cesar Ribeiro Gomes
March 19th, 2009 at 4:02 pm
I have several friends who are in this position and all have taken option A. I know one person who chose option C. Personally, I would take option A if I felt the company was a good one.
Pamela Bethune
March 19th, 2009 at 4:03 pm
Edison,
In this economy, saying that one would accept the reduced hours or salary and yet look for another job is unrealistic for most of us. Who is hiring? I firmly believe that right now, ALL companies need to consider reduced work hours, reduced benefits, and all possible measures to keep ALL of their employees on the job. I find it absolutely unacceptable for companies to maintain benefits and salaries for some people simply because the company feels that they are the best people to keep the company solvent! Unless a company has overhired, it should have no justification in saying that any employee is “expendable”. We are seeing way too much “collateral damage” in our economy lately.
People who are employed will spend money. People who are unemployed not only WON’T spend money but CAN’T! The little money that many of us are scraping by on right now is going for home payments or rent, medical bills and premiums, utilities, food, education, and basic necessities. Even people with jobs are fearful enough about losing their jobs that they are holding on to money. We have got to instill some credibility and security for people so that they will open their coffers a bit to spend some money. All industries are suffering because so many people have been taken out of the consumer base. If companies could all realize that with so many people out of work, people are not buying THEIR products, it may be possible to connect the dots and realize that lower and lower sales will mean even more cutbacks in the future.
If companies and government would share the burden to keep all people employed, instead of giving billions to filthy rich executives, people would spend money in the economy and help bring it back to at least relative stability. And by the way, the 10% unemployment rate is very misleading. Consider all of the homeless, underemployed, and people who are on welfare or social security (more are applying earlier just to have an income of some kind - they could have remained productive workers for a longer time if they had a job).
Work Share or any other program that can guarantee that people who want to work CAN WORK are all the correct tpes of measures to use in our current situation. But companies need to use creative ways to keep people employed. I don’t see a whole lot of creativity among many executives right now!
Bob Ulicki, unemployed ASIC Engineering Manager
March 19th, 2009 at 4:04 pm
For sure alternative A). This was used successfully by VW Brazil in the past.
Marcelo Mueller Perpetuo
March 19th, 2009 at 4:05 pm
Bob has clearly laid out the “paradox of thrift”. He has also made a very good point about the executives. I see a large amount of self-serving thinking among executives as they lay off the lower ranking people and keep — themselves.
Pamela Bethune
March 19th, 2009 at 8:29 pm
I would most definitely accept the reduced work week. I’d rather stay at the company I’m at, a place that takes care of its people, and is truly fun, then have to go out looking right now.
Carrie Mamantov
March 19th, 2009 at 10:38 pm
I remember that long ago in CresSoft there was a time when the management had an option of layoffs or salary cuts. They eventually opted for salary cuts and some reduction in fringe benefits which hit the middle and top management the most. We all accepted it. There were not many people who moved out. The best thing which came out of it that when the company got a big project they did not have problems in looking for new people as they already had a pool of resources who were capable of doing it. Before the project the company increased the pool of people doing R & D. Depending on the attachment people have with the company most will accept it. At least I did along with majority of my colleagues.
Mohammad Ali Toosy
March 20th, 2009 at 9:25 am
Faced with this situation in the downturn in the early 90’s, I accepted (A). The company eventually chose (D) for me a few years later as the company spiraled toward dissolution, but the experience of those years were well worth the sacrifice.
Charles J. Lord, PE
March 20th, 2009 at 9:29 am
A) Accept a reduced work week (and pay) to stay in the company
Ahmed Abdel-Dayem
March 20th, 2009 at 9:31 am
A - Assuming (1) that the pain is shared proportionately by the entire management team and (2)that the company has shared a plan to reward loyalty in more profitable years
Sean Fitzpatrick
March 20th, 2009 at 9:36 am
B) Accept but initiate job search.
By reducing X% work ours and pay, company is also loosening 20% of IP, investment in training, loyalty and competency.
The companies should think about to make 20% investment on KAIZEN, internal countermeasures and innovation. It is not utopia - Make the math:
How many improvements is delayed in your office? In your production line?
What about safety matter, scraps, productivity, costs??? Remember that you would like to have more time to plan? You wanted more people involved in SWORT analysis, balanced scored card?
I do believe that is much better to use X% to increase the competitor level, bye means of above exposed.
Odair Berto
March 20th, 2009 at 8:50 pm
My company implemented a two week required furlough last year. Although that didn’t cause me to initiate a job search, the threat of similar actions this year have triggered a modest job search. I would say for me, answer b (accept but start a job search) would be most closely reflective to my situation.
Barry Johnson
March 21st, 2009 at 7:00 pm
I agree with Odair in the case that you see a sort time recovery and the company has enough cash for this “investment”. The main point is that under a serious credit crises this a a survival strategy especially if a substantial part of your cost is men power. From my perspective there is no right or wrong approach to this question, it all depends on a much more deep analysis of the entire market and company financial health. Important to keep in mind that you can reduce x hours per week for a certain period of time and same lots of jobs. Look for the following perspective: You invest on training and improvements, than you broke, fire all the employees. At least they have a better chance to find one other job because they have a better education. Your competitor will be very happy!!
Marcelo Mueller Perpetuo
March 21st, 2009 at 7:03 pm
I am a supporter of the team. The company I work for is a small one and everyone been part of our plan to restructure and survive. That is what is going to keep businesses alive, the teams that can develop in difficult times.
Tracy Paige-Malm
March 21st, 2009 at 7:07 pm
For me personally, it would depend on lifestyle. Right now, I’d be happy to take a 20% cut in pay for the time off, since I could make it up doing other things on the consulting side.
March 22nd, 2009 at 9:28 am
A - as long as I knew i could continue to make my mortgage payments etc. with a pay reduction, otherwise B
March 23rd, 2009 at 8:35 am
I would accept either A and or B. I think it is better to stay with the company and at least get medical benefits. You can always search for a job. It is ethical for the company to take care if its employees that have been loyal. Also this downturn is not going to last for long, so its better to keep its experienced employees than pay for recruiting and training costs 9-12 months down the line.
March 25th, 2009 at 11:55 am
I think it depends on the industry and the experience level of the person in question. Certain industries are largely unaffected by the current economic situation. For example certain sectors of the IT industry have not been affected. So experienced workers may take B or C and quickly find another job, especially if they were personally affected by the economic situation. Some may even take D if there is a severance package offered. Others would have a difficult choice though. The most logical option in one of the affected industries seems to be B.
March 27th, 2009 at 3:28 pm
Certainly different times calls for alternative and creative ways to keep the work force within the company
Thank you all for your comments
Sincerely
Edison Reis
March 28th, 2009 at 5:25 pm
As a former manager and consultant, I have conducted lay offs and turnaround processes and even if it sounds tough, let me tell you that reducing of work and implicitly of incomes will affect/demotivate top performers of your company
In times like this, in my opinion, solutions are : diversify, partner or find solutions to maintain your business - which is the things you cannot do without best performers.
Look for opportunities, even in times of crisis, rather than accept it and reduce activity.
Manuela
March 31st, 2009 at 10:20 am
I agree with Mike on this one - you really have to look outside of the box when forced to make decisions like this….