One of the obvious effects of the economic downturn has been a steady drumbeat of job losses across many sectors of the economy. An interesting trend which appears unprecedented in prior down turns is, however, emerging: many companies, with the approval of the work force, are reducing the hours and compensation of all employees in order to avoid having to eliminate any jobs.
Recent surveys suggest employees as a group favor sharing the pain a little across the board rather than putting any one employee out in the street. Suppose, for example, a machine shop employs 10 machinists and business is down by 20%. You could eliminate 2 jobs, or you could ask all 10 machinists to reduce their hours and compensation by 20%. The latter might be preferable because 2 fully unemployed workers more than likely means 2 families without any income or health insurance. The impact on society as a whole is more severe.
Successful business people know that experienced employees are critical assets who should be protected to the extent economically feasible. Experience and training are hard to replace; and when the economy does turn around, these employees will be needed. In some cases layoffs are unavoidable, but it is interesting to see that the majority of workers would seem to favor modest across the board wage and hour cuts to preserve jobs for all employees.
— Kevin Palmer