BusinessWeek says that employers around the country are cutting back hours rather than laying people off in response to the recession. It sounds nice at first — until you realize that it sucks.
One example in BusinessWeek’s article is the window and door maker Pella. Based in Iowa, the company is afraid that if they lay people off — they will be without enough experienced workers if the economy rebounds due to a government stimulus package.
Chris Simpson, a senior vice-president at the company, acknowledges it’s an unconventional move. But Pella believes the economy could turn around faster than most people expect, and it doesn’t want to be caught short of experienced workers. “Our contention is, consumer confidence will rebound,” says Simpson. “If there’s a [government] stimulus package of some kind, we think people are going to respond.”
A few employers are following Pella’s lead in shortening the workweek. They include steel companies such as AK Steel (AKS), the city of Atlanta, small newspapers, and hospitals. According to the U.S. Bureau of Labor Statistics, the number of employees who normally work full-time but now clock fewer than 35 hours a week because of poor business conditions has climbed 72%, to 2.57 million in November 2008, from 1.49 million in November 2007.
Most people would prefer an hours cut than to being laid off… wouldn’t you?