Tuesday, February 10, 2009

Flexible Downsizing

Do you have any thoughts, comments, experience, or input of any sort related to flexible downsizing...such as reduced hours, sabbaticals, leave without pay, and similar measures, which help keep the companies financials healthy, while preventing lay-offs?

4 comments:

  1. Some ideas we have discussed:

    - reducing everyone's hours to the minimum threshold for full-time status.

    - Asking employees if they are interested in a reduced work schedule. You may find enough people to volunteer, which will avoid the need to mandate changes.

    - Partial Unemployment, with the noted concern about your UI rate.

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  2. Links to articles on Flexible Downsizing:

    Flexible Downsizing Opens Doors for More Flex Options

    http://youronramp.com/blog/betsyb/flexible-downsizing-opens-doors-more-flex-options

    Wharton’s Dr. Peter Cappelli on Flexible Downsizing

    http://www.fastcompany.com/blog/cali-yost/worklife-fit-not-balance/wharton-s-dr-peter-cappelli-flexible-downsizing-s-historical

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

    http://www.fastcompany.com/blog/cali-yost/worklife-fit-not-balance/it-s-not-just-market-other-roadblocks-flexible-downsizing

    Downsizing Should Have Three Stages--No Layoffs, Flexible Downsizing, THEN Layoffs--Not, Two

    http://www.fastcompany.com/blog/cali-yost/worklife-fit-not-balance/downsizing-shoud-have-three-stages-no-layoffs-flexible-downs

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  3. Overall, I was thinking about ways to reduce employment costs

    -reduction in benefits i.e. suspend employer match on 401(k), tuition reimbursements, bonuses, pay increases.

    -increase amount of contribution toward insurance (health insurance is a huge cost - have the employees bear more of the burden). Not popular, but neither is laying people off. I believe that UGA did this recently. Also, if you were to have lots of pushback on this, give them an example of how much the health insurance would cost if they were actually laid off and had to pay 100% themselves (COBRA). A real eye opener there.

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  4. And regarding Partial Claims / Partial Unemployment (in Georgia), at least you maintain some control over the process. If a company reduces its workforce due to lack of work, it is very likely the UI account is going to get charged anyway. With Partials, you don't have to complete the questionnaires from the DOL re: reasons for separation. Electronic submission is available which simplifies the process. Additionally, if you were to call that employee back that was on a partial claim and the individual refused, you would stop submitting for them and the employee would be required to go to the DOL and file a claim and at that point you would be able to demonstrate that your company had work available and the employee refused the work. I can honestly say that I've never seen figures which show the percentage of claimants who exhaust a claim before seriously beginning a job search. If you were to simply lay the employee off due to lack of work, I believe that you are going to be limited in how much control you will have over them and their ability to impact your UI account and rate.

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