26
Feb
09

Part-time or part-pay? What would you do to keep your job in a recession?

Manufacturing jobs are under threatIt’s a tough one, and a quandary being faced by employers all over the world. The money isn’t coming in, so what do you do? Take out a loan you might never be able to repay? Drop your staff to four day weeks? Or lay off some employees to save the jobs of others?

Last week General Motors announced it was sacking nearly 50,000 employees globally, as well as asking for $30US billion in government loans in a bid to keep afloat.

More and more companies are asking staff to go part time rather than be forced to give up their jobs altogether. The BBC has put a freeze on pay rises for senior managers and bonuses for all employees. And it’s not just companies doing it too. Earlier this year California’s governor Arnold Schwarzenegger ordered all state employees be ‘furloughed’ for two days a month, (that is, take two days off unpaid) to try and save $1.5billion from the state budget over the next 18 months

Of course, it’s not just employees that are feeling the pinch. Across India CEOs of big firms are taking pay cuts. But in the UK the big news today is that a LDV, a van manufacturer with a Russian-owned parent company has asked the British government for up to $45US billion in loans to help to restructure so it isn’t forced to sack more of its 900-strong workforce. The reaction so far has been mixed.

So what should companies do? If you run a business that’s in difficulty, what are you doing to keep it afloat? How tough is it to tell a loyal worker that you have to let them go, or ask them to take a pay cut?

And if you’re an employee, what would you be prepared to do in the short term in order to keep your job in the long term? Go to four day weeks? Put off retirement for another few years so you’re not dipping into your pension? What are you prepared to sacrifice in the short term in order to ride out the tough times with your employer?


19 Responses to “Part-time or part-pay? What would you do to keep your job in a recession?”


  1. February 23, 2009 at 15:59

    I run a small company that produces hand tools. My sales have tapered off to the survival threshold. The product is good. It is just a difficult time to weather the times in.

    We have a new head , or attachment to our hand tool system. The idea for this new attachment came not from our company, but from some American Hot Shot Crews. It is abouit as basic a concept from the field of use as we can possibly get. It is an idea to add to our universal handle on our overall hand tool system, which seeks to offer a safer, more versatile, more ergonomic, and effective system. It is a fire fighting hand tool system, (wildland fire crews) Many of these fire crews want this new innovation. So in spite of the risk, the terrible business climate of no profits rolling in, we are taking out loans to finance this new mold and product under the most trying of circumstances depending mostly on a cry from the needs in the field. No complicated technology, market research….just gut level risk and trying to make things better for our fire fighters. From an old smokejumper I might add.

    It is bold and risky, but that is what the dog eat dog competition in commerce is all about. What we are doing is not illegal, it is a valuable product, and we believe in what we are doing. More than the quest for money…..we were more concerned with delivering a better mouse trap to those over run with mices.

    If we fail it will be really worse than what we are facing now, but it is sort of heading into the storm and attacking rather than retreating. All the while incurring more debt that must be reckoned with in our future, that only sees victory. Too much of an old Marine spirit of attack, attack without the proper number of resources at our 6 O’clock!!!!

    troop on the Oregon Coast

  2. February 23, 2009 at 16:11

    How about worker owned cooperatives? In the 1970’s many small businesses weathered the storms this way. These are an under reported part of the economy already. Ask the UAW if this would work for them…

  3. 3 Daniel Sisa
    February 23, 2009 at 16:59

    I think it’s time to earn less money of course, but also work less , in some trades this would stop people losing their jobs. So companies need to do a big effort to keep their employees may be part time. Every single person with no job weakens the economy because this person will not buy goods, will not pay taxes and worst of all, will need to ask for income suport. Not to mention the problems some will have with their morgages.

  4. 4 Dennis Junior
    February 23, 2009 at 17:04

    I think that in reality, when the number(s) do not add up…then the employers has to cut costs in any and all ways possible….

    ~Dennis Junior~

  5. February 23, 2009 at 17:11

    It’s no longer a matter of keeping a company going but keeping the nation afloat?
    Lucky for Britain, it kept the pound sterling. Much of inflation in Europe stems from the high value of Euro.
    Some companies know exactly what’s wrong. They simply don’t want to admit it. Petrol guzzlers in the States are not the answer to high oil prices.
    We live in a changing world. As Britain says: “Global problems need global answers.” Some banks and companies are to blame. No good sending good money down the drain.

  6. 6 Ogola Benard
    February 23, 2009 at 18:59

    In most cases the input of a firm should match with its output and in worst circumstances like not having enough funds, it better to reduce the working days and increase effort!

  7. 7 Willam Klepzig
    February 24, 2009 at 04:04

    This is a hard question. It is easy to suggest the normal ways to cut money, production, supplies and personal: all will have to reviewed and cuts made.
    What I gave not seen is the call to rethink management, both personel and fixed way we do business ideas. Times are tough and I feel the DOW will hit 4600 and stay there for three years. During this time as much time given to staying afloat is also needed to be given for where the nation and world will be in three years. A company that has the ability to look at what it is making today, look at a world where radical changes in transportation and power supply will be the norm and begin to enter what will be the growth fields of 2012 will again be a leader. But to look at today, only, to decide that this slow down has no end, is wrong.
    If, and I say if unemployment reaches twenty five percent it still means 75% of the people are working. This means leaner, better run companies will supply shoes to shirts, bolts to batteries that people need. School will still be in service, food bought, transportantion needed, health services needed and it is your job as the leader in your company to look ahead to build what the consummer needs.
    So you are looking to cut back. You have excess space? Now what can you rebuild, make or how can you use that empty space put one, two or ten Americans to work. After all in hard times we do not have to have China make every thing they have been poorly making for Americans. What can you do to retool, rethink and remake jobs for Americans. I will even bet that the new Administration may wish to loan American tax dollars to American business to retool from brakes to kids games. But the I am bullish on America and I feel we can make it better here!

  8. 8 Roberto
    February 24, 2009 at 10:51

    RE “” What should companies do when the sums don’t add up? “”
    —————————————————————————————————–

    ————– Corporate law was drawn up to protect corporations from many liabilities in the US, the bigger Inc. the better.

    Marketing controls the corporate world, and the model is to market first, and develop and produce later by any means. If the product turns out inferior, declare bankruptcy and start over. Farm out production to inferior global jurisdictions, and then declare bankruptcy.

    Thus the need to grow like crazy because that’s the best model to get the money the quickest up front. Microsoft got Apple pretty much out of the computer market into niche computer market by allying with the big developing computer makers in the day, Dell, Compaq, and HP to make MS inferior software the business standard.

    Compaq gets swallowed up in another alternative ending for the marketing schemes in the never ending battle for market share.

    Common folk in the US are gravely penalized for declaring bankruptcy.

  9. February 24, 2009 at 14:27

    I am a stone carver and run a small business doing custom work in stone and bronze. Needless to say, such luxuries are the first to go. I have spent my life becoming an asset for those people or institutions that might want the sort of skills that it takes a lifetime to learn. If I and others can’t make a living for a few years, what happens to the collective body of knowledge? It is sad but true that even art making is a business, and in this economy, a very bad business to be in.

  10. 10 Eric
    February 24, 2009 at 16:55

    I have a business in the UK and in Norway.
    I have worked hard and I have done well..
    I have watched with Despair as my home country crashed and burned.
    I am in dire straights as my assets plunge in value in the UK.
    I blame corporate greed bankers and the corruption it offers to politicians of all sides.
    As soon as I can sell my UK “assets” (Liabilities ??)
    I’m gone forever.

  11. 11 Assopiah, Ben. Ghana
    February 25, 2009 at 15:29

    Workers must accept to work longer hours without overtime payments to ensure job survival. Employers should be transparent with employees and involve them in decisions that affect their future. Dignity, respect and close bond between employer-employee have saved several jobs.

  12. February 25, 2009 at 15:32

    Good news bad news about a recession (and most importantly a deflationary period). The good news is there are less people left at the “free market” auction. Less demand means lower costs on the existing supplies. So as a worker as long as you didn’t finance and indebt yourself into irresponsible monthly obligations, you should be just fine with less hours. Since the market price for basic needs such as food, energy, lap dances has gone down. You will be able to survive. In the US you must be working at a rate of more then 32 hours to be considered “full time” and your employer is obligated to supply a health benefits plan. That could be easily addressed.

    The bad news is that if you have buried yourself in debt and actually listen to the pizza guy turned mortgage broker when he told you, “you should borrow at your max because traditionally your salary always grows as you get older”. Well, then you really can’t take a pay cut now can you? (Essentially what has caused us to get into this fix to begin with.) $100 less a month might as well be $1000 less. The bills you already made do not “deflate”.

  13. 13 Dennis Junior
    February 25, 2009 at 18:30

    In my revised comments, It should be up to the employee and employer what type of decision on status that they should take….

    ~Dennis Junior~

  14. 14 Meg in Canada
    February 26, 2009 at 12:13

    As an employee, I would do whatever I could to keep my job, but I think I’d prefer to work the same amount of time for less money, than work part time. Working part time when you’re used to the usual 9-5 work day would make the situation much more depressing I think than just a smaller number on the paycheque.

  15. 15 John in Germany
    February 26, 2009 at 13:53

    Here in Germany many workers have accepted shorter hours, less pay, loss of Christmas bonus, and much more, with the promises that it would save a firm, only to find themselves on the pavement a year later.
    One cannot trust the employer these days, a reduction of profit is enough to release loads of workers in to poverty, to be supported by the general taxpayer. That is what they have received for being flexible, no wonder the Unions are becoming hard. It is more important to appease investors than to look after the workers.
    As a pensioner it is not in my rights to really comment, we have to take what we get, and hope for better days. We are affected by unemployment in a big way though. Less money being paid into the social insurance less money for us. And Brits living in Germany are suffering due to the bad rate of exchange GBP to Euro from their British pension if they have one.

    Dear God why don’t our politicians get to grips with the don’t care attitude of the industrialists, bankers, and their hangers on, if they did Whys would not have to ask such questions. Not all are bad thank heavens, but they are laughed upon by the cold calculating others.

    John in Germany

  16. 16 Taban Alfred David
    February 26, 2009 at 14:12

    Sudan/ Southern Sudan/Juba

    it is part pay but not part timer, since part timer work is not giveing enough money. in Sudan people are force to work part timer work so that they would remain poor, not become rich from any pravide work they went to afetr finishing their regular Job.
    in this recession I better work in the market vonder to support the littel money Im getting from my working place.

  17. February 26, 2009 at 14:43

    Meg,

    Time is money. (Something overlooked by those who though a 30 mortgage was a good idea.) Why not use the extra day off to take a college class. People who have kids will have one less day of daycare and fuel expenses. (sending a production worker home for a say is often as much about not having the resources being used as it is about not paying the workers.) Use the day to find a job that isn’t having a hard time. Never give time away with any less merit then you would give money away.

    Again, one way to educate the whole populace as about the true nature of economics and finances would be to force reciepts to show the amount of labor hours spent buying the product. “let us see, your dinner came out to be 5 labor hours. You will not have this paid off until monday after lunch. Thank you,and don’t forget to tip. “

  18. 18 Ansurd Carey
    February 26, 2009 at 14:51

    Well, i hope we are not too quick in laying of workers, the argument that Daniel Sisa (a blogger on this site) bring to the table is without must be taken into consideration.

    I currently work for a small printing company in Jamaica, as a Graphic Designer it would be ideal for me to work part time because i could do a bit of freelancing in my off-time but i don’t think that would be ideal for others.

    What my boss did was to rotate sum of the workers on a weekly basis, its bad but it keep us afloat and keep some form of income in our pockets.

    When people are not working it just add more pressure to the economy, so if you me “part time or part pay?” i would say go with what ever suits you the best, because at the end of the day part time or part pay beats the hell out not being employed.

  19. 19 DINKA ALIAP CHAWUL-KAMPAL
    February 26, 2009 at 16:00

    Hi Ros. Its no doubt that these are daily measures taken by people/Companies who loss out in business competitions to their trading rivals by which the sacks innosane employee`s who work under the company bosses who have over all decisions in business. I think jobs shouldnt be cuts insteads sack their company managers who leddown the company with their stupid policies.


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