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Part-time or No Job, What's Worse? Flex as an Alternative to Layoffs in Downsizing Strategy

Is it better to have your hours reduced, or lose your job?  According to a recent article in The New York Times, more workers are having their hours involuntarily reduced during the current economic "correction" than in the past downturns.  These individuals represent "3.7 of all employees, up from 3% a year ago, and the highest level since 1995." Is this good news, or bad news?

While any wage loss is difficult, I found the news encouraging that organizations are using flexibility as a downsizing strategy.  The alternative to a reduced schedule would most likely be no job at all. 

These organizations understand that it makes more sense to try to hold on to workers than resort to mass layoffs as they have in the past.  It’s too expensive and difficult to rehire and retrain employees.  "In decades past, when business soured, companies tended to resort to mass layoffs, hiring people back when better times returned.  But as high technology came to permeate American business, companies have grown reluctant to shed workers.  Even the lowest wages positions in retail, fast food, banking or manufacturing require computer skills and a grasp of a company’s systems.  Several months of training may be needed to get a new employee up to speed." 

So this is progress, right?  Well, as is usually the case, it’s good news and bad news.  On one hand, a job in the current economy at a reduced schedule might be better than no job at all.  However, the article also points out that as involuntary reductions in schedules become more common as a way to manage wage and benefit expenses, the level of uncertainty and risk for employees increase.  This is indeed bad news.

Perhaps organizations could reduce the level of uncertainty and risk by first asking individuals to volunteer to reduce their schedules. Another option would be to think about different types of flexibility that would reduce costs, such as leaves of absence or project work.  Both would free up hours that could then be allocated to those who would prefer a full-time schedule.  Obviously this is not possible in a union work environment where seniority often dictates options.  And even with voluntary flexibility, involuntary action may still need to be taken.  But more of a partnership between organizations and the individuals who work there, might offset some of the bad news for employees. 

What do you think?  Is it good news, bad news, or just an imperfect reality that employers are using involuntary flexibility to keep people as the economy tightens?    

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  • Kristin Ehrgott


    (Oradell, NJ)

    With the state of our economy in a rapid decline many companies have cut overhead and many have had to lay off employees. In fact, the unemployment rate has surged to a five-year high at 6.1% and 605,000 people have lost their jobs so far this year.

    Sigma Group, a full-service advertising agency located in Oradell, New Jersey has found a unique way to deal with shrinking budgets and minimize employee casualties. Sigma is offering employees part-time hours and even monthly sabbaticals.

    When given the choice, Sigma found employees are more than willing to take more time for themselves and a reduction in pay, rather than leave the company. “We are happy to give them the option,” says Patricia Paris, HR Manager. “I myself took a one-month sabbatical, traveling to Guatemala to volunteer, making a difference in the lives of underprivileged children. By doing this, my life is more fulfilling and someone else’s job is more secure.” Joanna Wagner, an Account Director, and mother of two, took advantage of a part-time schedule for the summer. “It gave me more time with my children and even contributed to my drive and dedication when in the office because I didn’t feel guilty for not spending enough time with them,” says Joanna.

    Sigma Group has a unique anti-corporate culture, a reason why most of the employees have left Madison Avenue for a workplace that feels more like family. Higher-level employees who are more secure financially can take advantage of these opportunities and in turn create a more secure work environment for all. “We know that many of our employees see their time and quality of life balance as much more valuable then money,” says Patricia. “So for us, this is a win, win.” Incorporating unique policies such as this has resulted in Sigma being recognized as one of America’s 5000 fastest growing companies (Inc. Magazine, 2008) with a reported growth of more than 300% in employee size and billings within the past 4 years.

    Founded in 1986, Sigma Group is a full-service advertising agency specializing in carrying brands across an array of media platforms. Recent campaigns include established brands such as Panasonic, DeLonghi, MasterCard, PoggenPohl, Hunter Douglas and others.


    CONTACT: Kristin Ehrgott, PR Specialist
    Sigma Group
    201-261-1123 ext. 161