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Flex your way out of the recession

Creative thinking to get lean (without being too mean)


According to the economists, countries are coming out of recession one by one.  But all of them counsel that we're far from being out of the woods.  2010 promises to be a year of job cuts across most sectors  - and in particular the public sector as our heavily indebted government struggles to balance the books.

Most organisations are looking closely at what they do and the resources they use.  Cutting costs and improving productivity to make leaner organisations are the order of the day. 

How can flexible working help?

1. Cut property costs by working flexibly

Doing more with less is essential in difficult times.  After staff costs, the biggest costs are usually real estate.  The costs of renting and running offices. 

By deploying staff more flexibly, in terms of where and when they work, it is possible for most organisations to scale back radically the amount of space they occupy.

It might seem like in property downturn this is the worst time to dispose of property.  But most companies do not own the property they use.  It is a good time to renegotiate leases, or if there is a lease break to consider consolidating into smaller premises.

Our article on shrinking the office provides guidance on how to go about this.

It's also a time to review why the office is necessary at all.  Most of the functions carried out there could no doubt be carried out elsewhere, in a less expensive location.  But it would be a mistake to up sticks and move the entire operation desk by desk from, say, London to Liverpool.  It's a time to question how work is done, and how to use space much more efficiently - in all offices, wherever located.

Simple relocation rarely delivers the savings promised, and may lose many good employees along the way.  This can inject a 'random selection' factor into who arrives at the other end of the move.  Enabling valued staff to work at or closer to home reduces the property requirement. 

The 'closer to home' part of the equation should trigger investigations into 'flexible officing' - using serviced offices or business hubs (a fast growing market) for staff to work from on an as-needed basis.  Terms for using these can be very flexible.

Using these flexible offices can also enable staff to work closer to clients.  For many companies now, establishing a presence in a new area does not mean taking on an office.  Instead, the presence in the area can be via a serviced office, and using 'virtual office' services.

2. Don't sack the temporary staff!

Many organisations are doing what appears to be the logical thing at the moment: shedding staff, and starting by ditching consultants, contractors, interims and agency staff.  This is especially so in the public sector. After all, isn't the first duty to protect the permanent staff?

Well, first of all, it depends what they are doing.  The reason for many of the temporary/project workers being there in the first place is that they are providing skills and expertise lacking amongst the core staff.  Who will do their work after they are gone? Replacing them with a member of the permanent staff who has the wrong skillset but whose post would otherwise disappear can end up being a costly exercise.

Secondly - there's something wrong here isn't there?  At a time when the company needs more flexibility and agility, the people on the variable payroll are being ditched and the people on the fixed payroll are being entrenched.  The company's freedom of action to respond to the market has taken a hit.

The right course of action is to retain whoever is delivering a vital service, and to introduce new flexibilities rather than eliminating the existing ones.

3.  Introduce voluntary and temporary measures to deal with the troughs, as well as the peaks

Many companies have been dealing with falling order books not by laying off staff, but by offering staff temporary reduced hours, or additional leave.

One leading legal firm offered staff:

  • Reduction to 80% working for 85% pay
  • Additional leave - 4, 8, 12 or 24 weeks leave for 30% pay.

Most staff opted for one of these options.

'V-Time', or voluntary reduced hours, has proved to be quite a popular way of retaining staff.  Additional leave has been a solution favoured in the car industry by companies such as Honda.

4. Flex beyond the travel freeze

Companies may place an embargo on staff travel when times are tough.  But usually this is only temporary, and productivity can take a hit for the duration.  There are things that people actually need to travel for.

The recession offers an opportunity to think about the purpose of business travel, and to come up with some alternatives that will maintain team cohesion and contact with the customer.

Solutions such as increasing audio-conferencing, videoconferencing and web conferencing are as much about changing behaviours as about the technologies.  They also offer a continuing, rather than temporary, way to reduce travel costs.

But it's also time to think about eliminating or reducing many routine meetings altogether - especially the ones that people travel from site-to-site for.  Analyse what meetings are for, and see if it can be replicated by a teleconference or eliminated by online exchange of information.  Reducing the duration of meetings - e.g. to 20 minutes rather than booking a room for an hour or two - will incentivise participants to join in by phone rather than travel in. And increase productivity into the bargain.

Thinking creatively across the range of options

The measures outlined here take examples from three categories of flexible working: flexible location, flexible contract, and flexible time.

Together they offer options for shrinking the costs of property, travel and salaries - without losing the best skills and the ability to deliver services flexibly.


 


 

November 2009

 


 

 


All material copyright Flexibility.co.uk 2009