Can Work Sharing Help Support Small Businesses?
When the economy begins to worsen, many employers cut costs by laying off employees. While this saves the company money in a struggling economy, it hurts employees, the company, and society at large. Sudden job loss is linked to increased health problems and prolonged financial struggles. For employers, especially small businesses with small staffs prior to layoffs, significant amounts of resources must be diverted toward searching, hiring, and training new employees as the economy recovers. All of this combined creates a detrimental cycle for businesses and communities when it could possibly be avoided. The solution? Work sharing.
What is work sharing?
Work sharing entails limiting employees’ hours until economic conditions improve. Although employees see a decrease in pay, many remain on company benefits such as health insurance. The employees work on what is available for fewer hours and thus less pay, but they have the opportunity to “share” their work between companies, ideally helping workers make up for their loss in pay. Taking the COVID-19 pandemic and subsequent economic fallout as an example, many industries faltered and released large numbers of their employees, but at the same time, other industries saw massive influxes of demand (food delivery, cleaning services, cleaning product manufacturing and sales, grocery stores, grocery delivery, food production facilities, digital entertainment, etc.) Work sharing can function effectively by filling the demand for these roles through company cooperation and proper infrastructure. Employers can temporarily reduce hours for staff but keep them employed and thus avoid the costs of rehiring employees down the road. For small businesses with a very limited executive staff that handles hiring, the rehiring process can consume massive amounts of time and resources for a business. Work sharing could alleviate this burden.
Is work-sharing effective?
The program is by no means a cure-all for an economic crisis, but it can help more workers stay employed and alleviate the pressure on the unemployment insurance offices and the economy as a whole. Although the process has seen use by American companies, including superstore giant Walmart, it is not yet a mainstream trend, but with increased attention and awareness from employees and employers, the program could become more popular and effective. During the pandemic, Chinese catering companies and grocery stores formed a beneficial work-sharing relationship that kept many employees in the workforce and filled in staffing gaps for overrun grocers. This way, both food service companies fulfilled their needs while not letting human and food resources go unused.
Is work-sharing in our future?
Work sharing could become a mainstream trend popular in certain industries in the future. It has seen favor amongst workers who do not wish to chain themselves to a certain company or even industry. With proper awareness and infrastructure to make it achievable for workers, it is hard to imagine that any unemployed workers would reject this system over the current norm of immediate and large layoffs. Demand for work-sharing also creates an opportunity for creating digital platforms that facilitate work sharing in an efficient and cost-effective way, maximizing its desirability for employers and employees alike. For small businesses, work-sharing could offer the solution for providing enough financial breathing room during a crisis while not severing employee relationships.
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