“Downsizing Flexibility Champions”—Alternatives to Layoffs Honor Roll (Updated 5/29/09)

On the “Using Workplace Flexibility as Part of a Downsizing Strategy” Flex Options teleconference for the U.S. Department of Labor Women’s Bureau (transcript now available here), I announced that I was going to start a list honoring organizations that used workplace flexibility to manage costs and minimize layoffs. 

The goal is to inspire other leaders to work with their employees and create innovative strategies to flexibly manage through this crisis beyond the knee-jerk “cut” of mass layoffs. 

Here’s a perfect example of how opening the dialogue with employees can result in creative solutions to reduce costs and avoid job cuts.  A colleague sits on the board of a not-for-profit.  During their last meeting, it was decided that the organization needed to make dramatic cost reductions.  Immediately, the director said, “I’m going to have to layoff people, but before I do that let me ask everyone if they have any other ideas.”  To her surprise, seven of the 20 staff members offered to reduce their schedule and pay.  And with that, she was able to avoid the layoffs she feared she was going to have to make. 

Whether it’s reducing pay and schedules, telecommuting to save real estate costs, adding unpaid vacation days to the calendar, job sharing, having former employees consult on a project-basis or offering sabbaticals/furloughs, there are many creative applications of flexibility as part of a downsizing strategy.  And it’s not just an “option to consider,” but a matter of global stability.  Not to mention using that same flexibility to achieve the other important resource management, cost-cutting, client service, productivity and innovation goals I've written about in previous posts (here, here, and here).

The List – The Downsizing Flexibility Champions (Updated 5/29/09)

The following have been identified from conversations, emails sent to me and articles.  I will continue to add to the list, so please send me your examples:

Union Pacific Corp:Railway keep 1/3 of 5,000 furloughed workers on retainer with full benefits and partial wages to avoid repeating mistake in 2004 when caught unprepared by unexpected recovery.  

Continental Airlines:Saves some call center jobs by having agents work remotely, taking leaves of absence, or making a transfer.

Singapore's Ministry of Manpower: Issues guidelines encouraging employers to use flexible downsizing strategies to minimize layoffs.

KPMG (UK)--Four-day week for 13 weeks and offered voluntary 1 to 3 month sabbatical at 30% pay

Gleneagles/Diagio (UK)--voluntary severance, unpaid leave, reduced working hours

LDV Vans (UK)--workers took 10% pay cut and accepted a three-day week as well as had their bonuses canceled.

Beth Israel Deaconess Medical Center--under the leadership of CEO, Paul Levy, employees are giving up pay and benefits to avoid layoffs. 

Norton Rose--London-based law firm is instituting a four-day workweek at 85% pay and/or a paid sabbatical for four to 12 weeks at 30% pay.   

B and W Tailer Hitches--owner, Joe Works, continues to pay employees even though there is less work, but allows them to donate their time making needed repairs in their town. 

R.D. Jones--a Baltimore interior design firm instituted a four-day workweek after a two week furlough and and a 20% cut in salaries.

Australia's Federal Industry Minister--"wants unions to help struggling manufacturers by accepting job-saving deals in which workers work shorter hours or accept other flexible arrangements to reduce labour costs as an alternative to outright sackings."

Vera Institute of Justice--cut the workweek of 5 of 130 full-time employees to three days a week.

Shinchang Electrics Co., South Korea--reduced wages by 20% in exhange for no layoffs among its 810 workers this year.

A Canadian United Steelworkers union--600 salaried employees agreed to a four-day work week to avoid layoffs. 

U.S. Bank - may reduce pay and hours to cut expenses 5%.

Global Tungsten & Powders--1,000 workers taking unpaid furloughs.

The Financial Times—offering staff the chance to work three days a week over the summer.

The Sigma Group, an advertising agency, is offering employees part-time hours and even monthly sabbaticals.

Accenture—“announced a voluntary sabbatical program known as "Flexleave." Offered to about 1,400 consultants mostly in the United States, the program gives them 20 percent of their salaries and continues benefits over a six- to 12-month period. Stock options remain in place for those who took the offer. The only caveat: while employees may take another job during their leave, they can't work for a competitor.”

Cisco Systems—“offered the 8,500 employees it laid off in April an unusual deal as well. Instead of a severance package, affected employees can receive a third of their salaries, all benefits, and stock-option awards while working for one year at a not-for-profit group already associated with the company.”

415 Productions—“the company offered either an overall 5 percent pay cut, or a four-day work week reflecting the appropriate decrease in pay.”

Acxiom Corporation—“a 5 percent mandatory pay cut, plus an additional 5 percent volunteer pay cut is tempered with increased stock options.”

The Milwaukee Journal Sentinel—may institute a one-week unpaid employee furlough.

Megavolt--agricultural machine re-manufacturer--moved in October to a "shared work program" of three 10-hour days a week as a way to cope with the downturn. While workers keep their jobs, the lost 10 hours each week is nonetheless enough for them to be eligible for state unemployment benefits in Missouri, where Megavolt is located.

Federal Express--announced a permanent 5 percent pay cut for 36,000 salaried, exempt employees nationwide.

Dell--nearing the end of nearly 9,000 job cuts, has asked employees to consider taking up to five days of unpaid vacation, is offering voluntary severance packages and has instituted a global hiring freeze.

Hewlett-Packard Co.--cut salaries by 2.5% to 20% and reduced contributions to employee 401(k) plans. Last year, HP asked employees to take unpaid vacation days and extended a planned holiday shutdown to two weeks.

Corning-- maker of glass for flat-panel screens froze hiring and cut discretionary spending. In the fall, it shifted many employees to four-day workweeks and began eliminating 1,400 temporary and contract workers.

Arizona State University—furlough staff 9 to 15 days by end of June, estimated will save $25 million and avoid layoffs of 1,000 administrative personnel.

University of Maryland—20,000 employees 6 days without pay based on their salary, which protects the lowest paid employees.

Port of Seattle—800 nonunion workers for two weeks, estimated savings $2.9 million, and they are in negotiations with unions for more savings.

Ashland, Inc.—two week furlough, first time in history, for nearly all salaried employees in U.S. and Canada.

Clemson University—furloughing all employees for 5 days and set up a relief fund for low-wage employees.

Pella Corp—2,400 employees will have one scheduled furlough week, every four to six weeks with state unemployment brought in to subsidize workers for days not paid. 
Keep the stories comin

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5 Comments

  • jenni.amelia11

    Nice post! I agree with it, telecommuting is indeed the best approach to tackle crisis situation, avoiding the major steps like employee layoffs which has no benefit for the company and the employees. Infact telecommuting working model have many other benefits both for the company and employees, as it helps cut office costs to a great extent and also makes more productivity. Visit https://www.goemployed.com/ for more such details.

  • jenni.amelia11

    Nice post! Telecommuting is an incredible approach to balance work life balance more effectively. I enjoyed reading the post here. Certainly <a href="http://goemployed.com/best-work-at-home-telecommuting-jobs/">telecommuting jobs</a> has benefits for employer and employees in a great way by cutting office costs and by making more productivity.

  • Terry Neese

    It’s so great to see so many companies and leaders who are promoting flexibility in the workplace. Not only is it a great alternative to downsizing during this recession, but it provides companies with a better way to adapt the workplace to our current situation. We are no longer living in the 1930’s and carrying on an Ozzie and Harriett lifestyle. Our changing circumstances mean that both men and women in the workplace are generally very open to flexibility. I would love to see this reflected more in day-to-day operations. Thank you for all of your work and thank you for your acknowledgement of the companies who are leading the way in workplace flexibility. Labor laws must be changed to allow employers and hourly workers the ability to choose flexible benefits, flexible workplaces, portability, and security in the workplace.

    http://familyissues.ncpa.org/

  • kirk Horsted

    Brilliant, all of it--the honor roll, the sudden innovation and compassion the companies are finding, the chance for folks to get the gift of some free time. We've been a crazybusy culture for so long, we are due to slow down. If there's an upside to this downturn, that's certainly one. Sabbaticals can happen thanks to much planning, luck and forethought. Or they can just come along when your life (or employer) take an unexpected, but not necessarily unwelcome, You-Turn. If anyone is interested, my blog is all about sabbaticals + a photo-rich travelog of my 69-day family sabbatical in the Caribbean that just ended last Tuesday. Thanks and carry on, makeyourbreakaway.com