Make Alternatives to Layoffs Part of a Broader Work Life Flexibility Strategy

Thankfully, the call to reduce unemployment by rethinking traditional all-or-nothing downsizing is gaining traction.  Hooray! According to recent articles in the Wall Street Journal, the New York Times, and Wharton’s Knowledge at Work, more experts and business leaders are recognizing something I’ve been blogging about since the summer which is that there are alternative, more flexible approaches to reducing overhead costs. 

What’s interesting is that few, if any, of the articles discuss these alternatives in the context of a comprehensive work+life flexibility strategy.  They are presented as isolated tactics, and not as part of a broader strategic use of flexibility in where, when and how work is done and life is managed.  This strategic application of flexibility would allow organizations and individuals to adapt and respond to a broad range of business challenges and opportunities simultaneously.  Not just one. 

Flexible hours, reduced schedules, compressed workweeks, job sharing, flexible staffing, and telework can reduce layoffs, but they can also achieve other important goals at the same time.  Here’s an example of the targeted impacts that one organization expects from its work+life flexibility strategy: 

Work Better/Smarter – Improve workflow planning and improve communication
Manage Talent—Reduce real estate costs; manage headcount but without layoffs
Reduce Costs—Control health care costs by lowering the level of stress
Individual Work+Life Fit—Help people manage their dependent care responsibilities, and retain pre-retirees
Customer/Client Service—Extend coverage beyond standard hours
Environmental Sustainability—Cut energy use by reducing unnecessary commuting

In other words, while this company is using flexibility to manage headcount and reduce layoffs, that same strategy is also:

  • Helping employees manage their dependent care responsibilities which makes them more productive, and allows them to bring the best of themselves to a challenging work environment;
  • Providing coverage for clients beyond the company’s standard 9-to-5 EST workday which makes clients happier;
  • Improving the way people communicate, coordinate and plan their work which improves productivity;
  • Reduces real estate costs as people work remotely, shift hours and share offices; and  
  • Allows individuals who are close to retirement to reduce their schedules and salary, but continue to earn an income which retains their knowledge and reduces costs. 

The isolated, tactical focus of the downsizing articles is understandable given the urgent struggle with unemployment.   However, it also reflects a broader bias we found in the recent CFO Perspectives on Work Life Flexibility survey conducted earlier this year with BDO Seidman, LLP:

  • Only 13 out of the 100 top CFOs surveyed worked for an organization with a formal approach to flexibility and with a senior leadership team who saw flexibility as a strategy for managing costs, talent and workflow; 
  • The remaining 87, or 87%, of the CFOs surveyed worked for organizations with no formal approach to flexibility and/or with a leadership team that saw flexibility as an informal "perk."   

The CFO responses reflect the broader understanding of work+life flexibility.  And they also represent costly missed opportunities, which organizations and the individuals who work for them can’t afford especially in this recession.  We need to connect the dots.

As Anat Lechner, a clinical associate professor of management at NYU’s Stern School of Business, noted in the New York Times, when you consider the expenses for planning, legal fees, severance, outplacement, the redistribution of work, the reduced productivity on the part of "survivors" and the cost of recruiting and training new workers when business picks up, layoffs "simply do not make sense."  The strategic application of flexibility can avoid many of these unnecessary costs, but it can also do so much more. 

So the next time you read an article about how organizations are using flexibility to avoid laying people off during the recession, shout "hooray," but also hope they know how many more benefits they could be realizing.  Because I'm afraid most don't.

Do you think companies are considering flexible alternatives to downsizing?  And if they are, do you think they see them as isolated tactics or as part of a broader work+life flexibility strategy with potential benefits in multiple areas of their business?  If not, why? 

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1 Comments

  • Karol Rose

    I couldn't agree more that we have an opportunity to 'connect the dots' in order to leverage to power of flexibility in these challenging times. For too long flexibility has been considered a 'program' rather than a business tool that offers significant potential to impact business outcomes. Research has shown that 'cutting heads' to resolve financial issues doesn't work...it demoralizes remaining staff who end up doing 'more with less' and when times improve, the talent you need most is the first to leave. So it's a lose/lose. Including flexible ways of working as part of cost containment and cost reduction efforts on the other hand is a win/win especially when it involves employees in the planning process. Some employees would rather have the option of working part time when the alternative is no job at all. Others might even consider taking unpaid leave for a period of time. Organizations are rethinking their need for physical space when the talent might work from home or another location thus reducing overhead costs. And our current economic conditions demand a more proactive use of flexibility to impact other big ticket items like health care costs by reducing stress and providing time for employees to have a healthy lifestyle. Having a proactive plan that includes a broad approach to flex for cost cutting now and in the future requires that key stakeholders -- Execs, HR (talent and diversity managers), managers and employees -- all have access to consistent information re flex options, and the tools and resources to figure out what's right for each business situation and every individual. And, it can be done. It's not too late to create a culture of flex that meets current and future business objectives while supporting employees' career and personal needs. That's a win/win/win!