Copyright © 1999 by Ethan A. Winning.
All rights reserved.
As downsizing continues -- and it does -- it seems obvious that corporate America is changing and has to change.
While those of us in personnel were taught that one of the primary reasons for our existence was to hire and retain good employees, most companies still want to hire but they no longer want to retain such persons, at least not those over the age of 45. There is a great deal of consistency in the inclination to make room for new blood. It's like having your father take you into the family business, and then squeezing him out.
There is no sense lamenting the fact that there will soon come a day when the words "career path" disappear from business' lexicon. We must fill the void that has been created by shorter-term employees with "short-timer attitudes."
Waiting it Out. Some have suggested that those with no career ladder to climb will alter their view of a career, and find a "roost" on which they can more or less happily sit until retirement. (Jane Bryant Quinn, "A Generation Topped Out," Newsweek, September 20, 1993) I think that Quinn and others are missing an important fact of corporate life in the 90s: few will be given roosts, let alone the opportunity to work "full-term." Many larger corporations have already countered this move on the part of "older" employees by getting rid of them through early retirements or semi-healthy severance packages. And, in at least one recent case, the courts have given tacit approval of such moves by making it legal to terminate higher paid, hence usually older employees simply because they are higher paid.
Lateral Moves. The possibility of moving more employees laterally has also been proffered. In these lateral transfers, employees would learn other important skills, skills which would help them in either becoming more valuable to the company or in finding other jobs.
At best, lateral moves are short-term solutions to a bigger problem: in smaller organizations, sooner or later all employees will top out skill-wise, hence value-wise. Further, lateral transfers place time-constraint and training burden on the supervisors and managers in the department to which the employee was transferred. One reality is that managers and supervisors rarely know how to train people, especially people coming into their arenas from unrelated functional areas.
However, if companies are willing to take the time to train managers and supervisors to train, and/or develop a training process for each department, then this could certainly be an interim step toward what has been called "dual career path planning."
The lateral move can be no more than an interim step in a process which ultimately will find ninety percent of all employees in a smaller company gone. Even larger organizations which can afford the lateral move, will one day begin talking about "dead wood" and taking steps to "get the dead out."
Broad-Banding. Most of the compensation systems I've designed have between 13 and 28 grades. The rallying cry of the 90s is to rid of the grades, known as "broad-banding." This is not a new concept. Rather it is one that resurfaces from time to time or recession to recession...or as new people find their way into HR.
The only good thing about broad-banding is the fact that fewer grades (oh, there are still some) means greater responsibilities. Of course, this also means that again there must be training or cross training.
Further, while one compresses the pay scale that was attendant to the previously "held" grades, the ranges are broader than before. A company which had 28 grades and then broad-banded to six "occupational bands," ostensibly still has six grades. No matter what it's called, there are pay ranges for each band. What the company ends up with as a compensation system is paying slightly less for more skills, but it has been my experience that there is, over a period of time, a process involved in which jobs are redefined with more responsibilities. These jobs are then "valued" and re-graded, and what one ends up with are more grades with slightly fewer positions and, temporarily, more skilled personnel.
Why "temporarily?" Because the nature of work is such that jobs over time always evolve into one that require greater or more diverse skills than before. There isn't a person reading this who hasn't had his or her job skill requirements change in the past decade. Computers have speeded the process by which employees must learn new ways of doing things, but so far computers have not allowed for "generalization" of skills. Rather, one becomes higher-tech and may produce more, but it is still more of a specialized type of work. (It is almost impossible to remain an analog person in a digital world. The world will sweep most of us along, like it or not.)
New Pay Plans. There is no question but that new compensation systems - or revamped old ones - which rely on bonus or profit-sharing plans will be the systems of the future. These are the only true ways of "paying for performance." There are still difficulties in determining who gets a bonus or participates in profit-sharing. (See "Doing Away With Merit Pay Increases".)
One reason to leave grades in place is that, when an employee tops out in a grade as determined by some rational surveying methods then, instead of merit increases, we can determine who would participate in a bonus or profit-sharing only.
One Possible Solution. What are the reasons for the current corporate upheaval? One reason was the unchecked pay increases awarded in the 80s. Pay outweighed responsibilities, and pay continued to increase.
Another reason, especially in stable companies, was that employees stayed and were allowed to stay longer, perhaps too long. Many did, in fact, roost. While many outlived their value, loyalty was still prized as part of the corporate culture.
To afford these expanded payrolls, product prices and service fees went up. (Don't look for this to be a treatise on economics.) Then, the recession. Paring back on costs, especially payroll, became the watchword, and what was once just a trend is now a fact of life.
So what have we got? We've got inflated payrolls, perhaps relatively less productivity from more people, and a computer revolution which may be better termed a reformation since it is the computer which is forcing us to "re-form" our companies. The computer has, or can give us the capability of doing more with less and ultimately leaving more time. It's time we seriously talk about the 32-hour, four-day workweek.
Perhaps because it represents such a drastic change in our business lives, I have not advocated this concept in the past, but anyone who has been awake during the last ten years has got to realize that business is drastically changing. Most would consider this as revolutionary as the eight-hour workday was in the 30s. We adapted then: we should adapt now. It would seem to be an alternative to the "temping of America."
At the same time, one must temper even this partial solution with the admonition that most relatively healthy companies might want to consider the four-day workweek for new hires only. (I'll mention this twice.)
The following is all predicated upon an assumption that (1) companies are not now overstaffed and, (2) that a study of functional areas would be conducted to determine which can be compressed, and (3) change stinks.
Not everyone in a company would be considered for such a workweek. Rather, there are certain positions at every level of an organization which are necessary to meet the internal and external demands. (Before those of you who feel "safe" become too comfortable, another suggestion I would make is that the maximum accrued vacation at senior management levels would be three weeks a year... No pain, no gain.)
The first thing that probably comes to the reader's mind is scheduling difficulties, so let's look at various positions which may or may not be affected.
Using a small (e.g., 50 or fewer employees) bank as an example -- since almost all of us are familiar with what's been happening in banking -- the first position is the teller. Experience tells us that there are peak traffic days, and even these have been lessened through the use of ATMs. With or without mechanization, few banks need a fully staffed teller line every day of the week (not that you could find one anyway). One might go so far as to say that teller lines could be put on a three-day workweek since most banks are open half-days on Saturday.
A disclaimer. Recently, I was over at a Wells Fargo/Norwest branch and found that the platform had been moved to the teller line. (The "platform," for those of you not familiar with the term is where the officers used to sit and, a hundred years ago, it was on a pedestal or raised enough to be considered a platform.) While this met with strong resistance, it now appears that the platform had less to do than was previously assumed. Even though Wells' response to economic conditions was to lay off thousands of tellers even before the merger with Norwest, their response also included expanding responsibilities for those who remained. Had they thought about the four-day workweek, perhaps they could have saved a third of their teller lines while still giving managers operations responsibilities. One must also consider the detrimental effect this move has on customers. If the bank's philosophy is that customers will get used to anything, from higher fees to new faces, then these dual-function positions might be okay. If, on the other hand, one is looking at a smaller, community-oriented bank, neither the move nor the philosophy will hold a customer-base. This downside outweighs any positive benefits the bank may receive from instituting such a program.
Next, we should look at the various lending functions. Loan processing may well be one that cannot be reduced in work time...although with new software... Loan servicing, however, may indeed be a function which could be reduced in numbers of hours needed to perform each week. Loan origination as a "sales" function might be placed on commission only, leaving administration of lending with a full workweek.
The accounting (and auditing or compliance) department remains relatively intact since banks and savings and loans are regulated to such extremes. But, should regulations ease, a closer examination of the accounting function would be in order.
Administration is a tough one to call, especially at the most senior levels. But, it has been my experience in a number of institutions that personnel and purchasing could be reduced to a four-day workweek. No organization would grind to a halt if this were so. (Of course, and this is a very important aside, Winning Associates is usually available to answer questions six days a week, 50 weeks a year.)
One may wish to explore the possibility of an interim step before instituting a four-day workweek: those who would be chosen would use the (temporarily) extra day each week to enhance their skills and find new jobs outside the organization.
The four-day workweek is only one part of the overall cost-cutting equation. It is doubtful that more than a quarter of an existing staff could rationally be placed on such a schedule. Second, one only "saves" twenty percent of those salaries. Third, those positions most likely affected are in the lower ranks.
Therefore, the four-day workweek (1) might be best for new hires; (2) be used as an alternative to layoffs or future layoffs if such are indeed necessary; (3) used for that part of an organization where there is an on-going underutilization of personnel, i.e., some teller lines. It is my opinion that a four-day workweek will come. The question is when, not why.
7/1/99
All Rights Reserved. Copyright 1999-2000. E. A. Winning Associates, Inc.