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It’s Not Just the Market…Other Roadblocks to Flexible Downsizing as Alternative to Layoffs

Last week I discussed the ways in which market pressures reward layoffs, discouraging more creative approaches to corporate downsizing.  I believe that market pressure is a main motivation behind the immediate jump to “layoffs,” which ignores options like reduced schedules, job sharing and sabbaticals.  But there are other less obvious influences that have been brought to my attention this past week.  (For more, join me for the U.S. Dept.

Last week I discussed the ways in which market pressures reward layoffs, discouraging more creative approaches to corporate downsizing.  I believe that market pressure is a main motivation behind the immediate jump to “layoffs,” which ignores options like reduced schedules, job sharing and sabbaticals.  But there are other less obvious influences that have been brought to my attention this past week.  (For more, join me for the U.S. Dept. of Labor’s free Flex-Options teleconference on 2/12 from 2-3pm ET, “Using Workplace Flexibility as Part of a Downsizing Strategy”).

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“We’ve laid people off, and we may need to do more layoffs in the future.” 

It’s never too late to incorporate work life flexibility into your downsizing strategy.  I’m always fascinated by the “all or nothing” mentality individuals bring to their personal work+life choices.  But I’m beginning to see this same thinking in organizations as they consider downsizing.  Remember, there’s historical precedence from the early 80’s for using flexibility to manage labor costs.  It’s not a choice between flexible downsizing or layoffs.  There’s room in your downsizing strategy for both options—they’re not mutually-exclusive.  And an organization gets work+life bonus points for including all the options at their disposal.

“Our systems are incompatible with multiple employment scenarios.” 

In other words, “It’s too difficult and too expensive for our systems to account for and track some people working a reduced schedule, while other people share jobs, take sabbaticals, or become project-based employees.  So, because our systems can’t handle it, it’s easier to lay people off.”  I know this makes sense to the people who have to deal with the system, but there’s a pretty clear cost/benefit rationale (as described here) for trying to figure it out.

“But we have to do something!  And figuring out all of those different scenarios takes too long.”  

I will acknowledge that the 4th quarter 2008 economic downturn was rapid and surprising.  And I recognize that some companies were already on the brink of catastrophe, and forced to take drastic measures.

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But I find it hard to believe that for most organizations a) there wasn’t an early indication that circumstances might require creative thinking about how to continue operating profitably and b) there isn’t still some time to think carefully about all of the alternatives and their ramifications (again, here’s the cost/benefit).

“We just aren’t comfortable with flexibility.” 

This is probably the most honest reason why more organizations aren’t considering reducing schedules, encouraging people to share jobs, offering sabbaticals, or shifting people to project-based status.  The deterioration in the market occurred rapidly and required a quick response.  Unfortunately a period of crisis may seem like the wrong time to develop and implement a business-based work life flexibility strategy, and then use it as a strategic lever to downsize.  But it’s never too late to give flexible labor cost savings a try.  Jennifer Swanberg, Executive Director of the University of Kentucky’s Institute for Workplace Innovation reiterates the strong business case for flexible downsizing.

As the wave of layoffs seems to grow daily, it’s important to make sure that organizations challenge their resistance and consider alternate approaches to achieving their labor cost saving goals.

My hope is that having been caught flat-footed by the recession will encourage leaders to get their companies ready to more flexibly respond to the next challenge.  Because there will be a next challenge. In his most recent book, A Sense of Urgency, management guru John Kotter predicts that, “For the next five to ten years the rate of change will continue to go up and up, with consequences for nearly everyone.” Whether it’s the spike in energy costs early last year, or the steep economic downturn, rapid change is a given.  Excuses such as, “our systems aren’t compatible,” “we have to do something,” or “we just aren’t comfortable with flexibility,” aren’t going to set organizations or individuals up for success in an era of rapid change.

What do you think? What are some of the other reasons organizations aren’t incorporating work life flexibility into their downsizing strategies?

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