A shorter work week could turn out to be the best way to beat layoffs in the downturn
Jamie Ee Wen Wei 8 February 2009
In April, Ms. L.C. Tay will work one day less every other week.
Her salary will also be cut by about 10 per cent.
This comes after MediaCorp, her employer, announced cost-cutting measures last month to cope with the economic slowdown.
But the 35-year-old executive is unfazed. ‘In such a climate, any cost-cutting is to be expected,’ she said.
‘I’m actually quite happy that I can work a shorter work week. It makes for a more balanced work life.’
The idea of a shorter work week is becoming more attractive to companies here trying to stay afloat while saving jobs.
Since last November, more than 18,000 workers from unionised companies have gone on a shorter work week. They now work from three to five days.
Singapore is not alone in adopting such a measure.
Across the Causeway, Malaysian businesses have also shortened their work week to save jobs. Falling demand for exports there has seen several factories closing.
In Taiwan, the practice of making workers take unpaid leave, euphemistically called ‘unpaid vacation’, has spread to key sectors such as liquid crystal display manufacturing.
Tens of thousands of businesses in Britain are also scaling back on working hours this year, with workers facing a return to a three-day work week. In the 1970s, the Labour government had allowed this, to save electricity following industrial action.
Here, as the current slowdown bites harder, more workers are likely to be put on a shorter work week, no doubt partly as companies respond to calls by the Government and unions to consider this alternative to retrenchment.
Last November, the Ministry of Manpower, Singapore National Employers Federation and the National Trades Union Congress got together and issued a revised set of tripartite guidelines on managing excess manpower.
A shorter work week was among the recommendations to help companies manage excess manpower.
Union leaders and human resource practitioners hailed the recommendation.
Mr. David Leong, managing director of PeopleWorldwide Consulting, a human resource firm, felt the shorter work week has become ‘necessary’ in these difficult times.
‘For companies undergoing severe shortage of demands or dry pipelines, manpower deployment is a topmost priority as it may drain cash flow and affect business sustainability,’ he said.
‘When machine times are down, companies contend with depreciation and loan costs. For excess labour, it is a pure drain if the resource cannot be deployed where they are most productive.’
He said that given the options, including retrenchment, companies should try shortening workers’ work week first ‘so that they may still have a job while the companies stretch the dollar’.
Mr. Rajendran Govindarajoo, president of the Chemical Industries Employees’ Union, agrees.
‘If you implement a shorter work week, everybody feels a little bit of pain, but if you go for retrenchment, some people will feel a lot of pain,’ he said.
He knows of at least 20 plastic and speciality chemicals companies that have recently implemented a shorter work week. Several had wanted to axe jobs, until the unions stepped in.
Echoing his views, Mr. David Ang, executive director of Singapore Human Resources Institute, said: ‘Between losing a job and working a shorter work week, the choice is quite obvious.’
A shorter work week, however, may translate into pay cuts ranging from 10 per cent to 50 per cent.
One major employer that has made the move to a shorter work week is MediaCorp.
From April, all of its 2,500 employees will work a four-day work week every other week. The company’s cost-cutting measures will shave 10 per cent off its annual wage bill.
Mr. Ang pointed out that while companies will save on their annual wage bill in such efforts, the bulk of the cost savings will actually come from operation costs.
Kato Spring, which supplies precision parts to TV, mobile phone and printer manufacturers, has shaved off 30 per cent from its electricity bill after it shortened its work week from six to five days and scrapped its shift-work system last November.
The positives
Firms thinking long term may see the benefit of a shorter work week in helping them retain talent.
Mr. Leong said: ‘Some companies may have trained their workers for specific roles and to immediately release them when there is a down time may mean that the workers may join competitors.’
Apart from seeing their pay cut as a result of the shorter week work, workers may have to work longer hours each day or take on more duties as the work pool shrinks.
But union leaders and human resource practitioners said workers can nevertheless benefit from the extra day or days off.
Mr. Ang Wah Lai, head of the Singapore Union of Broadcasting Employees, said: ‘If you just go for a plain wage cut, people will be very unhappy. At least now, they will have an extra day off. Our work can get very stressful. I think some workers appreciate the day off.’
Mr. David Ang said workers can use this extra time to be with their families, go on a trip or pursue other interests.
One productive way to spend the time would be to go for retraining, which also helps prepare for the upturn.
With this in mind, the Government has come up with the Skills Programme for Upgrading and Resilience (Spur) to encourage firms to send their workers for skills upgrading. Some companies have already done so.
Spur will pay for two things: up to 90 per cent of the course fees, and up to 90 per cent of a worker’s salary, capped at $6.80 an hour.
Jobless workers will also be sponsored by the Government. The low-skilled ones will be paid $4 for every hour they are on training, and the higher-skilled, up to $1,000 a month.
Human resource experts said the key to making the move to a shorter work week a success is assuring workers that they are not getting a raw deal.
Mr. David Ang said: ‘Communication is very important because you do not want your staff to think they are being taken advantage of.’
Workers and unions should be consulted on the implementation and on the level of payment to be given to the affected workers.
The tripartite guidelines’ advice is that the work week should not be shortened by more than two days in a week, and not last for more than two months at any one instance, subject to review.
Mr. David Ang said bosses may need to show more flexibility in such trying times. For instance, there might be workers who could be allowed to hold a second job.
He said some affected workers may find their reduced salary a problem and seek a second job as they now have more time on their hands.
‘Should employees be allowed to have another job which does not directly conflict with their main job? We ought to rethink such a policy,’ he added.
1 comment:
Would you rather work less or lose your job?
A shorter work week could turn out to be the best way to beat layoffs in the downturn
Jamie Ee Wen Wei
8 February 2009
In April, Ms. L.C. Tay will work one day less every other week.
Her salary will also be cut by about 10 per cent.
This comes after MediaCorp, her employer, announced cost-cutting measures last month to cope with the economic slowdown.
But the 35-year-old executive is unfazed. ‘In such a climate, any cost-cutting is to be expected,’ she said.
‘I’m actually quite happy that I can work a shorter work week. It makes for a more balanced work life.’
The idea of a shorter work week is becoming more attractive to companies here trying to stay afloat while saving jobs.
Since last November, more than 18,000 workers from unionised companies have gone on a shorter work week. They now work from three to five days.
Singapore is not alone in adopting such a measure.
Across the Causeway, Malaysian businesses have also shortened their work week to save jobs. Falling demand for exports there has seen several factories closing.
In Taiwan, the practice of making workers take unpaid leave, euphemistically called ‘unpaid vacation’, has spread to key sectors such as liquid crystal display manufacturing.
Tens of thousands of businesses in Britain are also scaling back on working hours this year, with workers facing a return to a three-day work week. In the 1970s, the Labour government had allowed this, to save electricity following industrial action.
Here, as the current slowdown bites harder, more workers are likely to be put on a shorter work week, no doubt partly as companies respond to calls by the Government and unions to consider this alternative to retrenchment.
Last November, the Ministry of Manpower, Singapore National Employers Federation and the National Trades Union Congress got together and issued a revised set of tripartite guidelines on managing excess manpower.
A shorter work week was among the recommendations to help companies manage excess manpower.
Union leaders and human resource practitioners hailed the recommendation.
Mr. David Leong, managing director of PeopleWorldwide Consulting, a human resource firm, felt the shorter work week has become ‘necessary’ in these difficult times.
‘For companies undergoing severe shortage of demands or dry pipelines, manpower deployment is a topmost priority as it may drain cash flow and affect business sustainability,’ he said.
‘When machine times are down, companies contend with depreciation and loan costs. For excess labour, it is a pure drain if the resource cannot be deployed where they are most productive.’
He said that given the options, including retrenchment, companies should try shortening workers’ work week first ‘so that they may still have a job while the companies stretch the dollar’.
Mr. Rajendran Govindarajoo, president of the Chemical Industries Employees’ Union, agrees.
‘If you implement a shorter work week, everybody feels a little bit of pain, but if you go for retrenchment, some people will feel a lot of pain,’ he said.
He knows of at least 20 plastic and speciality chemicals companies that have recently implemented a shorter work week. Several had wanted to axe jobs, until the unions stepped in.
Echoing his views, Mr. David Ang, executive director of Singapore Human Resources Institute, said: ‘Between losing a job and working a shorter work week, the choice is quite obvious.’
A shorter work week, however, may translate into pay cuts ranging from 10 per cent to 50 per cent.
One major employer that has made the move to a shorter work week is MediaCorp.
From April, all of its 2,500 employees will work a four-day work week every other week. The company’s cost-cutting measures will shave 10 per cent off its annual wage bill.
Mr. Ang pointed out that while companies will save on their annual wage bill in such efforts, the bulk of the cost savings will actually come from operation costs.
Kato Spring, which supplies precision parts to TV, mobile phone and printer manufacturers, has shaved off 30 per cent from its electricity bill after it shortened its work week from six to five days and scrapped its shift-work system last November.
The positives
Firms thinking long term may see the benefit of a shorter work week in helping them retain talent.
Mr. Leong said: ‘Some companies may have trained their workers for specific roles and to immediately release them when there is a down time may mean that the workers may join competitors.’
Apart from seeing their pay cut as a result of the shorter week work, workers may have to work longer hours each day or take on more duties as the work pool shrinks.
But union leaders and human resource practitioners said workers can nevertheless benefit from the extra day or days off.
Mr. Ang Wah Lai, head of the Singapore Union of Broadcasting Employees, said: ‘If you just go for a plain wage cut, people will be very unhappy. At least now, they will have an extra day off. Our work can get very stressful. I think some workers appreciate the day off.’
Mr. David Ang said workers can use this extra time to be with their families, go on a trip or pursue other interests.
One productive way to spend the time would be to go for retraining, which also helps prepare for the upturn.
With this in mind, the Government has come up with the Skills Programme for Upgrading and Resilience (Spur) to encourage firms to send their workers for skills upgrading. Some companies have already done so.
Spur will pay for two things: up to 90 per cent of the course fees, and up to 90 per cent of a worker’s salary, capped at $6.80 an hour.
Jobless workers will also be sponsored by the Government. The low-skilled ones will be paid $4 for every hour they are on training, and the higher-skilled, up to $1,000 a month.
Human resource experts said the key to making the move to a shorter work week a success is assuring workers that they are not getting a raw deal.
Mr. David Ang said: ‘Communication is very important because you do not want your staff to think they are being taken advantage of.’
Workers and unions should be consulted on the implementation and on the level of payment to be given to the affected workers.
The tripartite guidelines’ advice is that the work week should not be shortened by more than two days in a week, and not last for more than two months at any one instance, subject to review.
Mr. David Ang said bosses may need to show more flexibility in such trying times. For instance, there might be workers who could be allowed to hold a second job.
He said some affected workers may find their reduced salary a problem and seek a second job as they now have more time on their hands.
‘Should employees be allowed to have another job which does not directly conflict with their main job? We ought to rethink such a policy,’ he added.
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