Are layoffs really the best answer to a sluggish economy? “No,” according to the CEO of a small company who believes it's not about who’s “essential” and who’s “expendable.”
Manufacturing has been hard hit by layoffs over the past 12 months. Not surprisingly, almost all participants (86 percent) in ASSEMBLY Magazine’s 2009State of the Professionsurvey claim that they work in a facility that has experienced layoffs. The rubber and plastics industry (91 percent) has been hardest hit by layoffs, while the medical device industry has been the least affected (77 percent).
Are layoffs really the best answer to a sluggish economy? “No,” according to Clint Greenleaf, CEO of Greenleaf Book Group, a small, independent publisher. “Larger rival companies [in our industry] are cutting jobs in the hundreds. On the other hand, we only have about 30 full-time employees. And even one layoff is, in my opinion, unacceptable.”
Greenleaf believes it’s not about who’s “essential” and who’s “expendable.” If you’ve done your hiring right, he claims that every employees is essential.
“Cutting one person from the team is losing one invaluable resource that helps make this entire company tick,” Greenleaf points out. “In the short term, it’s hurting morale and lowering the productivity of a department. In the long run it means the entire company’s time and money is spent trying to make up for the loss-redistributing tasks and overburdening departments, struggling to make up the slack, dealing with the paperwork, and eventually putting additional man-hours toward rehiring and retraining.”
According to Greenleaf, the most important resource in any company is people. “Without their labor and commitment, most companies would not be successful,” he explains.
Greenleaf recently asked his employees to institute what he calls “lay-on,” as opposed to the layoff. “Essentially, every employee is putting in one voluntary extra hour per day at work,” he explains. “[That] extra hour [is] to be used in the most advantageous way possible: Finishing up projects, having a meeting with a client or vendor, assisting a coworker or getting hands dirty working in another department. Even cleaning a desk or organizing files, if it helps improve efficiency.”
Greenleaf claims that the numbers work, if you do some simple math. For instance, 30 employees x 1 hour per day, multiplied by a 5-day workweek equates to 150 extra hours. If you divide that number by 40 hours per standard workweek, the result is 3.75, the equivalent of almost four full-time employee work weeks.
“For any company, an extra hour increases the work week from 40 to 45 hours and is a simple 12.5 percent increase,” says Greenleaf. “And managers don’t have to hire a single new person. Rather than cutting expenses (and revenue), we’re keeping all of our employees’ benefits and increasing productivity-and revenue, as well. And, we aren’t asking for anything big. Just a little extra time each week that is completely flexible.”
So far, the simple idea appears to be working. Since implementing the program in early March, Greenleaf's profits are up.