What are the advantages and disadvantages of work-sharing?

The term work-sharing is the positive restatement of what is in fact a negative concept-equal sharing of the lack of work. When management wants to sell its employees on sharing a hardship and sharing it in good spirits, positive language may go a long way towards creating a positive attitude.

Advantages. The threat of job loss is a severe threat to employee satisfaction and productivity. Work-sharing, adopted either in the face of a threatened slowdown or as a standing policy, may do a lot to preserve morale for employers who have, in the past, lost time and employees to layoffs. Work-sharing can help to minimize the loss of employees.

Disadvantages. There are several obstacles to work-sharing as a viable alternative to reductions in force.

Seniority-based privileges of key staff. As a practical matter, work-sharing may not be possible if a slowdown is severe:

• An employer faced with cutting its payroll by half may not reasonably be able to expect all its employees to work only half a day, unless local unemployment is extremely high.

• If work-sharing is implemented, how much can a company cut everyone's workday before key staff will leave for other jobs?

• Taking a vote of the entire work force may not give management reliable information, since those who are more senior may vote for staff reductions as opposed to work-sharing.

Factors that may help determine the point at which a cut in hours will lead senior people to leave include:

1. Past history. If past layoffs or downsizings have been short, few will leave even with a severe cut in hours.

2. Job market. Can employees easily find similar work, or are they heavily dependent on their present employer?

3. Company commitment. If management has built loyalty over the years, senior employees may be more willing to focus on the group's interests and not just their own.

State unemployment compensation laws. Another obstacle to companies considering sharing work across-the-board (instead of laying off chunks of their work force) has been state unemployment laws. Many state unemployment insurance laws discourage work-sharing arrangements to the extent that they disallow employees who are working on a part-time basis from qualifying for benefits.

To facilitate the use of work-sharing arrangements to forestall the total shutdown of a plant, some states have amended their unemployment insurance laws to allow employees to draw partial unemployment while working on part-time schedules.

Structuring work-sharing. Those companies whose employees are willing to spread the effect of layoffs can choose from an array of possible alternatives:

• rotational layoff

• traditional job sharing

• extended vacations

• shared work/unemployment compensation

• voluntary time-income trade-offs

• phased retirements