As long time readers know, I’ve been a loud proponent of using flexibility in the form of reduced schedules, furloughs, telecommuting, job sharing and flex scheduling to minimize layoffs since the beginning of the recession. And since the recession started two years ago, some innovative employers have indeed incorporated this more flexible approach to managing costs and resources into their downsizing strategy.
But more employers haven’t followed their lead because there wasn’t the incentive to move beyond the knee-jerk “cut” response that is rewarded, at least in the short-term, by the market (here and here).
As the internationally recognized management expert, Jeffrey Pfeffer, pointed out in a recent Newsweek cover story, “The Case Against Layoffs,” unless your industry is disappearing, layoffs do much more harm than good. Thankfully it looks like an incentive to seek an alternative to layoffs has arrived, and not a moment too soon as early indications are that mass layoffs may be inching up again after a brief hiatus.
According to an article in today’s USA Today entitled, “Work-share program that cuts hours vs. jobs could grow,” work-sharing legislation may expand to more than half the states by year-end and provide employers the incentive they need to think differently and more flexibly:
“Seventeen states already have programs in which employers can cut the hours of all or most employees in lieu of layoffs. The workers get jobless benefits to recover part of their lost wages.
Work-sharing lets employers avoid the costs of severance and of training new hires when the economy rebounds. For workers, it eliminates the trauma of layoffs and helps preserve morale.
The number of employers in the programs soared last year as the recession deepened and the jobless rate climbed to 10%. A record 166,000 jobs were saved in the 17 states that offer the option vs. 58,000 in 2008, according to the National Association of State Workforce Agencies…
The Gear Works of Seattle, which makes gears for wind turbines, sliced workers’ hours 20%, skirting layoffs for about 15 of 93 employees, says executive Mike Robison. Machinist Robert Foster, 38, who worked four-day weeks for 10 months, says, ‘I like it vs. the alternative.’”
And our research has confirmed that employees do prefer flexible downsizing to the alternative. Most respondents to our nationally-representative 2009 Work+Life Fit Reality Check study said they would accept a change or reduction in schedule, or take a cut in pay to save their jobs.
Work-share legislation can provide the much-needed incentive, but for flexible downsizing to succeed it can’t be a one-off “program.” To be a strategic lever for managing through the recession, it must be implemented, reviewed and revised as operating realities change. Here are some important insights and resources to help the strategic implementation process taken from previous blog posts I’ve written on the subject:
Get Started Tips to Navigate Post-Recession, Pre-Recovery Flexible Downsizing. Highlights of the advice include:
- Go back and assess where you are. Know where you stand in the business.
- Once you have the facts on paper, reset the organization’s flexible response to match today’s realities.
- Reframe and communicate the business case behind either the continuation or discontinuation of any type of flexible downsizing in the post-recession, pre-recovery era.
Finally, to help leaders work through a cost-benefit analysis of layoffs versus a more flexible approach to downsizing, I joined with a team of work+life experts to develop a tool entitled “Flexible Rightsizing as a Cost-Effective Alternative to Layoffs.”
Today’s news that work-share legislation is gaining steam across the country is very welcome. However, for organizations, leaders and employees to truly benefit from the more flexible approach to managing costs and resources it must be implemented, review and revised thoughtfully and strategically.
What do you think? How important is this legislative incentive to encourage a more flexible alternative to job cuts?