Life Meets Work Blog

The unemployment rate hit 9.4 in May, the highest in more than 25 years.  The good news? The pace of layoffs is slowing and has been for four straight months.

But, those numbers don’t tell the whole picture. If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 16.4 percent in May, reports the Associated Press.

And plenty of “fulltime” workers are working plenty less, with the average work week in May falling to 33.1 hours, the lowest since 1964.

For many, those lost hours and lost overtime are a hardship.  This blogger knows one manufacturer in her city where workers decided they couldn’t make ends meet on a 4-day work week, eventually driving management to implement layoffs instead.

Plenty here to dissect. Is team atmosphere lacking at this company? Did they feel confident they could find other jobs or at least enough under the table work to supplement unemployment? Or worse, was this a work ethic issue—i.e. ‘I can’t make ends meet working four days a week, but I’ll manage if I can have free time on unemployment.’ Impossible to say.

But supposedly, these folks are an anomaly. According to one recent study, more than 9 out of 10 employees (94%) would be willing to accept a change or reduction in their schedule, or take a pay cut to avoid layoffs.

The survey, sponsored by Work+Life Fit, was conducted in late March 2009. Here’s a sampling of what employees said they’d be willing to sacrifice:

•    59% would take a furlough (1-2 weeks unpaid leave)
•    47% would work reduced hours with reduced pay
•    41% would be willing to take a pay cut but work the same hours
•    31% would take an unpaid sabbatical

Let’s give a collective nod of appreciation to those companies finding alternatives to layoffs.  And let’s give another thank you to those employees willing (and financially able) to take a hit.

Posted by Jaime

Knowledge@Wharton posted a comprehensive piece on layoff alternatives.   The author discussed the impact of layoffs and the driving forces behind them.  While larger companies often bow to the pressure of stakeholders, smaller firms have more flexibility and can do more shifting, saving money and talent.

Despite the opinion of one Wharton professor cited in the piece–”If you have a choice between a 10% wage cut and laying off 10% of the work force, why on earth would you choose the latter?”—the author recognizes there are no easy decisions when cost cutting is required:

“In the end, companies need to balance what’s best for their employees while making sure the company remains viable in tough times.”

Here’s how some companies featured in the story are (or have in the past) making ends meet:

• City of Atlanta, 2008 – 10% cut in hours for city employees
• People Link, 2008 – employees decided to voluntarily cut hours
• Megavolt, 2008 – temporarily move employees to other business units; 10 hour reduction/week
• Cisco Systems, 2001 — allowed employees to take sabbaticals at 1/3 their salary.
• Voluntary pay cuts in exchange for deferred compensation (vacation, stock)
• Voluntary layoffs
• Voluntary retirements

And here’s a snapshot of the costs of a layoff:

• Morale issues for all staff
• Unemployment insurance premiums
• Severance packages
• Outplacement services
• Risk of litigation
• Hiring / training costs to ramp back up

More on staffing issues in a tough economy at the Life Meets Work main site.

Posted by Jaime

In our ninth straight month of job cuts, employers slashed more jobs this September—159,000—than they have since 2003.

But while job cuts may be on the short-term agenda, many are still looking forward with concern to the post-boomer years and making plans to shore up their workforce now.

Such is the case in northeast Wisconsin, where layoffs are affecting area manufacturing families. In this region, manufacturing accounts for 24% of the work force and 30% of the income. So when area paper mills and machine shops shut down, people begin to feel concerned for the health of the region’s economy overall.

And plenty of area manufacturing leaders are concerned—but not about closing their doors. Despite layoffs at some companies, others are looking five to 10 years forward and hoping they’ll have enough skilled people to keep the machines going and stay competitive.

Paul Rauscher, owns EMT International, a small 80-person equipment manufacturer for the paper and printing industry. Rauscher believes a shortage of qualified workers poses the greatest future threat to his business—more than even foreign competition.

“We manufacturers have to get people, and especially young people, to realize that careers in manufacturing are good for their future and that many of the manufacturing jobs of today are high-tech and high pay,” he said in a Q&A with the local Green Bay Press Gazette.

Here’s what Rauscher observed about industry needs compared to output at the area’s regional technical college:

· CNC technicians – 40 openings – seven graduates

· Mechanical design – 85 openings – nine graduates

· Electro-mechanical technology – 75 openings – four graduates

Rauscher operates in an industry dominated by boomers, so it’s not just the lack of technical graduates that has him worried. It’s the not-so-distant day his workforce retires.

“I know of at least one mid-size manufacturing firm that expects to see about 50 percent of its work force retire in the next five to 10 years. A young person today can expect to see significant opportunities as companies begin to replace retired workers.”

Rauscher is starting his battle plan now. Step 1 - Get young people to enter his industry by promoting career potential.

We expect the following is also on his to-list: Step 2 - Keep boomers on the payroll longer through part-time and seasonal scheduling.

What are you doing now, to build your future workforce?

Posted by Jaime