Facing Economic Slowdown: How Can We Transition to a 5-Day Workweek and Cut Costs?

Respected Seniors, I need your suggestions. I am working as an HR Executive in a company. Due to the global slowdown, my company's business is facing difficulties. Sales orders are uncertain, hence we are forced to implement cost-cutting measures. I would like to know if we can transition to a 5-day workweek, closing on Saturday and Sunday. Currently, we work from 8:30 AM to 5:00 PM in the first shift and from 5:00 PM to 1:30 AM in the second shift, with a half-hour recess. Can anyone suggest a system to work 5 days a week instead of 6, to cover the working hours of one day, or any other system? Additionally, what should we do about the contract workers working with us?

Please suggest other ways of cost-cutting in the company.

Regards,
Nageshwar

Time Off Policy and Work Schedule Adjustments

Is your firm involved in manufacturing or services? What is the policy in your firm regarding time off from work? How is it considered and calculated? Often, an extra day off, such as a weekend, amounts to a benefit. You are trying to adjust for one man-day. Currently, you have 8.5 working hours, including breaks. At most, you can calculate an addition of 45 minutes at work. However, that only builds up to 4 hours and 15 minutes every week. You may consider a half-day on Saturday to adjust the rest. However, look for policies on writing off the extra working hours every day unless it's essential for production.

During a recession, you need to keep your employees' morale high. You will need time to issue a bonus; hence, some time off from work will offer them a benefit. You can always roll back when you need them to work during those hours. The choice remains yours.

I do not understand your problem. You are currently working 6 days a week and working 2 shifts. Do you want to work 5 days a week and 2 shifts with the same number of hours worked as before? Or do you want to work 5 days a week and reduce salary? If you are working the same hours and 2 shifts, how does it amount to cost-cutting? The salary cost will remain the same, as the work is the same.

Contract Workers

As for contract workers, you can more easily deal with them. You just have to tell the contractor how many people you want to reduce, and he will have to retrench or redeploy them elsewhere.

Our company is a manufacturer. Our company wants to reduce other expenses; we will not deduct the salaries of employees. We just want to save one day's cost. We want to work 5 days a week in both shifts. Because if we work in the I shift only, then the manpower of the II shift will not be able to work due to the unavailability of other machines.

We have already reduced the number of contract workers to a particular number of persons. As our sales orders are uncertain, we have to maintain a minimum number of workers to meet our production if we receive any other sales orders.

Regards,
Nageshwar

In that case, your workers can work for up to 9 hours a day and 48 hours a week. This excludes break times (reasonable lunch and tea breaks). So, in effect, you can have 9.5 hours a day (9:30). You will be able to make up the lost time this way for 5 of the 8 hours you want. However, ending the second shift at 2:30 am is a problem, so I suggest you consider starting at 6 or 7 am instead, as most factories do. I am glad to see that your management is doing all it can to avoid reducing workers' wages. I hope the workers will cooperate on work hours.

Managing Employee Costs Through Shift Adjustments

Reducing the number of shifts and reviewing shift timings may help in managing employee costs. At least the overtime payments, if any, must cease when the production targets are low due to inadequate business. This is probably the time when you could review your leave policy and permit people to avail (rather than encash) their accumulated earned leave.

When you reduce the working hours, productivity will come down. Again, when you reduce the working hours to match the poor market condition, you cannot give full wages to the workmen. Rightly, you have reduced the contract workmen as the first step. Who will do those jobs done until now by them? Your permanent workers? If you have unions, call the leaders and discuss the issue first. Please be frank across the table and make workers' representatives understand the ongoing problem.

You have to implement austerity measures by cutting extra benefits such as overtime, travel allowance, LTA, leave encashment, and other frills. I don't know the size of your organization and style of functioning.

Instead of asking us for ideas, please ask your own people in the interest and welfare of the organization. Introducing and implementing austerity measures without ensuring the cooperation of your union leaders, employees, and contractors will end up in further complications.

When some of the major units were kept under suspended animation in my erstwhile company due to pollution control problems, we called all the unions and took their suggestions. We declared partial layoff (even for staff employees) and stopped all fringe benefits temporarily until the plants resumed at full swing.

Almost all organizations experience such ups and downs, and with your right remedial actions, you will tackle this temporary problem with ease and comfort.

Best of Luck,

Ganesh Ramachandran

Cost-Cutting Recommendations

The methods of cost-cutting that you have proposed are superficial. I recommend you concentrate on your purchase and production departments. A lot of revenue leakage happens because of:

• Lack of coordination between the purchase and production departments or the purchase and sales department.

• Poor relations with vendors.

• Poor inventory management. What is the percentage of obsolete inventory?

• Lack of training for the sales staff. Have your salespeople developed indigenous methods to handle sales calls?

I recommend you address these problems first. Reducing manpower comes later. If you wish, you may contact me on my mobile at [Phone Number Removed For Privacy Reasons].

Regards,
Dinesh V Divekar

Hello Seniors, we currently do not have a lot of work, and the market position is declining. Therefore, we are considering transitioning to a five-day workweek instead of six days, with the deduction of one day's salary per week. Your prompt advice on this matter would be greatly appreciated.

Regards,
Nageshwar

Will that result in your salary going below minimum wages?