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?