While job losses keep mounting in today’s brutal economy, a growing number of companies are avoiding layoffs using a program known as work sharing.
Instead of laying off employees, companies are keeping them while reducing workers’ pay, often by 20 or 40 percent. The employees generally get to hold on to benefits as well. Then, state governments step in and make up part of the lost wages, usually about half. Seventeen states have adopted the program, and economists and executives are hailing the program as a way to keep workers employed and retain skilled labor. A similar work sharing program has been credited with saving thousands of jobs in Germany.
With savings from reduced income taxes and from commuting fewer days, some workers nearly break even. Unfortunately, only a small portion of eligible businesses and workers are presently benefiting from the program because most companies still don’t know it exists.
A story in the June 15 New York Times covered a Connecticut metal working plant utilizing the program. At Tri-Star Industries, the 29 nonmanagerial employees now work three- or four- day weeks. “The alternative would have been to lay off three to seven workers,” Andrew Nowakowski, president of Tri-Star Industries said, “but that would mean that when things become busier, I’d run the risk of not having the trained people I need.” The company’s employees have bought in to the program as well, even if it means less pay. “Without this, it would have been four or five guys out the door and one of them could have been me,” said John Drzata, who runs a five-spindle precision lathe.
Right now, business is all about staying in game; fighting to see another day. A shrewd combination of sacrifice and creativity such as work sharing is the way to survive.
Source: New York Times
Question: Would you be willing to try a work sharing program in your business?