Cut Payoll, Save Jobs
By Eric Armstrong on Dec 23, 2008
It's time for the 4-day work week--at least for the next year. Businesses save 20% on their payroll, keep their talent, and workers keep their jobs. What's not to like?
If you're going to be in a company that is forced to cut payroll, it would be hard to find a better one than Sun. I've been through several downsizings here, and I can tell you that in each case, the company did everything possible to prevent it. They reduced janitorial services to every other day, and then moved them to daytime. They implemented every cost-cutting measure they could think of, and only sacrificed people as a last resort.
That kind of concern exists because Sun knows that a knowledgeable workforce is the lifeblood of its business. If you lose that knowledge, you lose a lot of what makes your business run.
That attitude creates the kind of respect for individual effort that makes it a joy to be here. In a lot of ways, it's more like being on a college faculty than it is having a corporate job (but the benefits are way better). So it's a great place to be.
A few years ago, though, the company was in trouble. The company had to make changes to put itself into a more competitive position. It did, and it was beginning to rebound. Then the economy tanked. Through no fault of its own, the company finds itself in a position where it has to repeat those measures, just to survive.
But even though payroll reductions are necessary, there's another way to achieve that goal: Shorten the work week. It's a measure that makes a lot of sense right now, for several reasons.
Reason #1: Reduced Demand for Product
Now that we have a President who is actually worthy of the title, we can expect the kind of action that will actually improve life for the middle class, reversing the trend that has seen a million people a year drop out of it over the last decade.
But there is a substantial delay before even the most effective policies take effect. By all accounts, the current downturn will last for most of 2009, at the very least.
Reason #2: Increased Capacity to Respond to the Upturn
Given the expectation that the economic downturn is temporary, reducing the workweek is a strategy that makes a lot of sense.
When the economy does begin to turn around, the companies that have managed to retain their knowledgeable personnel will be able ramp up their production capacity the quickest. They may then be able to leapfrog their competition.
Reason #3: People will like that option
If you had a choice, which would you choose: Drop your income by 20% and have some extra time on your hands, or take your chances on a 20% reduction in staff, which means that you might lose our job? And, oh by the way, there is a 100% certainty that if you do keep our job, your workload will be increased by 20%. (I went through several layoffs at a previous company, and several here. Not once has the departmental workload dropped off after the downsizing.)
To my mind, a known loss of income is a lot less stressful than a possible job loss. For one thing, it's something that can happen right away, so it's a known quantity. It's not something that's looming over your head for an indeterminate amount of time. Besides that, (except in rare cases) it's something you can handle.
I can always cut back 20%. I can reprioritize and make adjustments. I'll have to cut back. But I know I'll be able to make the important payments.I'll keep the home, keep the car, keep food on the table, and keep heat in the house. That's what it comes down to, after all. That's the bottom line.
And if people are grateful for keeping their job, they'll be more loyal to the company. That sort of loyalty makes a big difference to future productivity.
Reason #4: It's Overdue
Since the 1930's, our productivity has increased what? 50 times? A hundred and fifty times? So why is the work week still 40 hours? We could be working something like 2 hours a week and have the standard of living we had in the 30's.
Of course, we want more than that, so we don't mind working more--especially when the work is challenging and engaging. Between that and work's social component, many of us would work even if we didn't have to. It's just what we do.
Still, if people are working just as hard as they once were, but productivity has gone up, then we're using all of that productivity gains to produce more, rather than to work less. That's great, if you're a stockholder or highly-paid executive. The company makes more, you make more.
But it's not so great if you're a worker. You're working as long as you were before, but you're not making that much more.
A four-day work week begins to redress the balance. It puts some of the gains in the worker's hands, in the form of more free time.
Reason #5: Socially-Conscious Countries Already Do It
There is no doubt that a shorter work week is more "humane", in many ways. So it's standard practice in countries that are less mesmerized by the mantra "Maximize Profit at any Cost".
In France, for example, every other work week is 4 days long. That creates a "35-hour" week, without requiring people to put in a useless half-day where nothing much gets done.
If a company only needs to trim it's payroll by 10%, that's a strategy to consider. But for a full 20% reduction, the 4-day work week is the way to go.
Reason #6: Three Day Weekends Make Sense
I've always thought that 3-day weekends are great. You get one day to do all the things you need to do. You get another day to go out, engage in activities you enjoy, and have fun. Then you have one more day that you can use to recover from days one and two. That way, you can rest up and start the work week fresh.
I don't know. Maybe I'm strange. But it seems to me that the four-day work week makes a lot of sense.