The challenge of enforced idleness

Jan 20 2009 by Nic Paton Print This Article

Accountancy firm KPMG took the radical step this week of urging its 11,000 staff to take up the offer of partially-paid sabbaticals or moving to a four-day week in an effort to cut its employee costs.

It's just the latest in a clutch of firms, large and small and on both sides of the Atlantic, that are looking at shorter working weeks and reduced hours as a desperate alternative to redundancies.

Many of the big automotive giants, including GM, Honda and BMW have been bringing in reduced hours or even, in the case of Honda, temporarily halting production at some factories.

It's not just big manufacturing firms that are taking this step, either. In fact, according to the U.S. Bureau of Labor Statistics, the number of employees who normally work full-time but were now doing fewer than 35 hours a week because of the tough business climate climbed by nearly three quarters in the year to November, from 1.49 million to 2.57 million.

Many law firms in California have been laying off attorneys or going to reduced hours, according to website Technology companies such as Dell are also allowing employees to take time off without pay, while others are moving to a four-day week.

There are even signs of this happening in the public sector, with Atlanta mayor Shirley Franklin recently cutting the pay and hours of some 4,600 employees by a tenth to help meet a budget shortfall.

It all seems a world away from a Management-Issues blog in 2004 suggesting we might be seeing the "end of the line" for the shorter working week.

Then it was workers at a Bosch plant in France being told that they would have to work longer than their statutory 35-hour-week or see their jobs move to the Czech Republic, with many German car plants at the time looking to go down the same route.

While it may be a less bitter pill to swallow than being laid off, moving to shorter working is still not easy for managers to manage, and can create its own challenges.

There are the financial issues of workers having less money and generally feeling more insecure and worried, meaning managers need to go out of their way to explain how the business and doing and how or whether jobs are safe.

Alongside this there may be motivational and productivity issues to address, including how to keep workers upbeat and motivated.

Then at a practical level, depending on the day-to-day nature of the business, there may be challenges around ensuring workers don't have too much or too little work to do when they are actually at work.

There may also need to be a re-evaluation of what time off from work, particularly sabbaticals, is actually for, according to Carol Sladek, an executive at consultancy Hewitt Associates.

Whereas once sabbaticals were predominantly something granted to employees to give them a chance to explore personal interests or re-energise themselves without losing their jobs, now they are simply becoming something to prevent layoffs, she recently told the publication Business Insurance.

"We have seen a significant increase in the number of employers looking at these kinds of programmes as a way to attract, engage and retain talent," she said.

Similarly, John A Challenger, chief executive officer of the consulting firm Challenger, Gray & Christmas, told the magazine Business Week in December that often it is one of the few options left to managers other than taking a damaging axe to their workforce.

"More companies are exploring alternatives to layoffs. If they can keep people on until the business turns around, the company would be in much better shape to ramp up quickly," he said.

The magazine cited an array of smaller firms taking this step, including Iowa windows and doors manufacturer Pella, mining firm AK Steel as well as various newspapers and hospitals.

The big advantage of shorter weeks, for managers and employees alike, is of course that you are retaining highly skilled staff for when (and it is hopefully "when" not "if") things start to pick up.

Lee Hopley, head of economic policy at the UK manufacturers' organisation EEF, told the HR magazine Personnel Today this month that anything that protected employment and helped firms come out the other side intact had to be a good thing.

"Because of the nature of employment in manufacturing, which is usually more highly skilled than other sectors, manufacturers have to be more adaptable and come up with different options so as not to lose skills," she said.

"In previous downturns, when we lost manufacturing employment either overseas or to other sectors, evidence shows it's very difficult to get those skills back into the sector," she added.