No matter how big your business, no matter how successful, chances are it will face lean times. When those lean times come, how can you retain one of your biggest competitive advantages—your most knowledgeable, most experienced and most trusted employees?
“We’ve used the plan, on and off for several years now,” says Charlie Jenkins, human resources director for Tacoma-based clothing company Morning Sun. “In today’s job market it’s difficult enough to find employees. We don’t want to lose them if we don’t have to.”
If you’re facing just such a problem, Washington’s Employment Security Department (ESD) has a plan they want you to know about. It’s called the Shared Work Plan.
“On a temporary basis, employers can reduce their costs by cutting payroll, without losing their most valued employees,” explains program plan coordinator Pat Novarro.
Curious? Novarro explains further. Under the plan, ESD will pay benefits to workers if their employers fall upon hard times and are faced with the ugly spectre of layoffs — even if those employees aren’t actually unemployed.
“If a company could be forced to lay off at least 10 percent of its workforce — or ten percent of an individual business unit, or some combination of specific departments, they could be eligible,” Novarro says.
Rather than see those employees laid off, she explains, the state will pay unemployment benefits for the hours that the affected workers’ miss. The company must retain the workers at a half-time schedule, at least, she adds.
“Our workload changes weekly,” explains Jackie Chapman, office manager for Chehalis’ Quali Cast Foundry. “We can’t constantly lay people off and bring them back.”
The employers benefit by retaining expert personnel they might otherwise lose — since ESD requires that workers collecting unemployment benefits must search full-time for another job.
The situation is perfect for Morning Sun, which specializes in customizing ladies tops — such as sweatshirts — with silk-screening and embroidery.
“Because of the nature of fashion, our business changes from year to year,” Morning Sun’s Jenkins explains. “At the end of our season, we have to count our re-orders before we know how many employees we’ll be able to keep on.”
Workers benefit as well, Novarro says. That’s because traditional unemployment benefits are paid out as a percentage of a workers former wage. Additionally, if workers find part-time work (for instance, half-time at their previous employer), they might earn so much that they wouldn’t be eligible for benefits at all — while still earning a fraction of their former salaries. She observes that this isn’t much of an incentive for them to stick around until a struggling employer can right itself.
Under the shared work plan, however, the picture improves dramatically. Say a full-time employee’s hours are cut to half-time. According to Novarro, that employee can earn their normal wage for the 20 hours per week they work — and still be eligible for half of their normal unemployment benefits for the 20 hours they’ve lost.
Using the plan, says Jenkins, Morning Sun can retain skilled employees such as embroiders and silk-screeners, rather than spend months training new ones. Chapman says Quali Cast benefits even more — skilled foundry workers may apprentice up to three years to master their craft.
By Christopher Hord, Business Examiner staff