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Topic : How to Beat Layoff
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Industry : IT Services Functional Area : Outsourcing
Activity:  1 comments  315 views  last activity : 07 06 2010 20:18:04 +0000
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                              The Idea of Work-sharing

This the new mantra in the organizations in some parts of Europe and Japan where they are not laying of employees due to recession, rather than there is salary cut and the work is shared between two or three people what was previously one person's job. The idea is that employees are required to share the pain of coping with hard times while everyone gets to keep their jobs even if they're paid less.

Worksharing is the latest buzzword in Japan Inc. Proponents say it's a good way to avoid American style layoffs in a society that has long fostered lifetime employment. Companies like Toyota Motor Corp, Mazda Motor Corp, Toshiba Corp. and Fujitsu, have all taken up some kind of worksharing.

Although critics say it's merely a fancy way to disguise wage cuts, the practice is winning powerful supporters in Japan.
The government is now considering earmarking public money for companies that take up worksharing to curb surging joblessness as the world's second largest economy slides into what authorities are calling Japan's worst recession since World War II.

A handful of Japanese companies experimented with worksharing during a slowdown a decade ago, but this time more are adopting the practice than ever before as a way to survive the far more serious recession. Worksharing is catching on here for cultural, legal and practical reasons.

Many Japanese companies maintain the tradition of lifetime employment so worksharing is a way to avoid firing regular workers. So far, most of the layoffs have involved contract workers, whose use became legal in recent years to skirt the regulations protecting full-time, salaried workers.

Labor laws tend to defend lifetime employment, usually requiring companies to provide hefty severance packages or risk facing lawsuits. If a company is in bankruptcy or losing money, it becomes easier legally to lay off workers. At the same time, worksharing allows companies to keep trained workers and bring them back up to full time quickly, once a recovery comes.

Worksharing is routine in nations such as Germany and Switzerland, where the government provides unemployment benefits to make up for the income fall from lost hours.

"The income loss is spread over more people, and fewer people suffer the depression associated with unemployment. The economic advantage is that firms retain their workers who are experienced on the job.

Worksharing is taking various forms in Japan, and some companies aren't even calling it that. At Tourism Essentials Tokyo, a job-referral company, two flight attendants sent to an airline were asked to share one job, and one person's pay, to avoid one of them getting fired. At Fujitsu's computer chip unit, the shifts at the 24-hour-running plants were increased from two shifts of 12 hours each to three 8-hour shifts so each worker had their hours and pay reduced by a third.

Worksharing is also finding acceptance in nearby South Korea.

So Can India and others also apply this worksharing approach??

 Top Comment : Alexander Lewis   | 07 06 2009 18:10:04 +0000
Aware of this concept of theirs as I was handling this sector a decade ago during the Asian currency crisis and a recession year, plus currency that went from a stable 105:1 USD to 87 and then the other way towards 147, with the Economist predicting it could go till 160. Quotes in their market generally went at +/- 5% of costing rates, salary and bonus cuts abounded, marketing guys positioned in Japan had a hard time. India cannot emulate these societies for following reasons, 1) Lack of discipline, 2) Too much of cultural diversity 3) Lack of respect for hierarchy and group and / or company loyalties, especially in IT companies. Koreans had one more thing the Japs dont have - they are aggressive, and risk takers, and highly growth oriented. Korea does not need to follow Japs so much on work sharing, as their cost structures are much lower, howevr they have very aggressive unions, their chaebols were over-leveraged, their companies were huge conglomerates in the late nineties in very diversified unrelated products. A blitzkrieg across the globe and in India generally saved them the blushes. The India strategy went straight for the Jugular, LG - Samsung - Hyundai - Daewoo all landed here, built very large capacities, premium and state of art products at high prices, branding strategies, customer feedback methods to quickly address Indian sentiments etc. JUST WAIT once the Medical and Health care area opens in India, Korea medical equipment and systems are great, they have excellence in embedded systems development not tapped by the Indians, they make a lot of Tivoli like products just like Japan does though for different reasons and operating scales as their respective markets are markedly different in terms of consumers and producers. Korea is a great market, SAD we Indians r stupid, self aggrandizing and blind in our own greatness to tap real business.
 
1 comments on "Beat the fear of layoff by worksharing!!"
  Commented by  Alexander Lewis, Marketing Manager, self    | 07 06 2009 18:10:04 +0000
Rating : +1 
Aware of this concept of theirs as I was handling this sector a decade ago during the Asian currency crisis and a recession year, plus currency that went from a stable 105:1 USD to 87 and then the other way towards 147, with the Economist predicting it could go till 160.

Quotes in their market generally went at +/- 5% of costing rates, salary and bonus cuts abounded, marketing guys positioned in Japan had a hard time.

India cannot emulate these societies for following reasons, 1) Lack of discipline, 2) Too much of cultural diversity  3)  Lack of respect for hierarchy and group and / or company loyalties, especially in IT companies. Koreans had one more thing the Japs dont have - they are aggressive, and risk takers, and highly growth oriented.

Korea does not need to follow Japs so much on work sharing, as their cost structures are much lower, howevr they have very aggressive unions, their chaebols were over-leveraged, their companies were huge conglomerates in the late nineties in very diversified unrelated products.  A blitzkrieg across the globe and in India generally saved them the blushes.

The India strategy went straight for the Jugular, LG - Samsung - Hyundai - Daewoo all landed here, built very large capacities, premium and state of art products at high prices, branding strategies, customer feedback methods to quickly address Indian sentiments etc. 

JUST WAIT once the Medical and Health care area opens in India, Korea medical equipment and systems are great, they have excellence in embedded systems development not tapped by the Indians, they make a lot of Tivoli like products just like Japan does though for different reasons and operating scales as their respective markets are markedly different in terms of consumers and producers.

Korea is a great market, SAD we Indians r stupid, self aggrandizing and blind in our own greatness to tap real business.
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