MANAGEMENT : The appeal of part-timers
Thursday 23 March 1995
But recent research by the management consultants McKinsey & Co suggests that companies adopting it might find themselves in that much sought-after "win-win-win situation". Far from being "a temporarily fashionable but shortlived remedy", it provides a significant "opportunity to increase the flexibility and openness of employment markets", argues Helmut Hagemann, a director in the firm's Munich office. "Most of all, it creates opportunities for everyone - companies, staff, the economy as a whole - to win."
Noting that only about 38 per cent of employees in a study of workers in German companies were interested in switching to part-time work, Mr Hagemann says that companies have to give employees the right incentives to change their minds. Many women, and an increasing number of men, are keen on the concept. But the decision depends on the financial consequences.
"If employers want to introduce part-time work quickly and on a large scale, they must either ensure that the drop in take-home pay for part- time work is perceptibly smaller than the reduction in time worked or avoid a pay cut altogether by withdrawing other benefits," he writes in an article called "How Working Less Can Mean More" in the latest issue of the McKinsey Quarterly.
On the other hand, there are huge potential savings for employers. Higher productivity, lower absenteeism and a more intensive use of capital yield savings equivalent to 5.5 per cent of total personnel and capital costs, says Mr Hagemann. With introducing and implementing part-time working arrangements representing a cost of only 1.1 per cent, that leaves a net gain to the company of 4.4 per cent - equivalent to roughly a fifth of the personnel cost of the employees opting for part-time work.
Recurring net savings of this type will cover the one-time cost of converting to part-time work in two years or less for roughly 60 per cent of jobs, according to the study by Mr Hagemann and his colleagues. But this also means that about 40 per cent of jobs will not yield economic benefits if they are converted from full time to part time. So, employers need to develop solutions specially designed for jobs classified as suitable for being converted.
But introducing part-time work is not just about cutting costs. The appeal from the employer's point of view, says Mr Hagemann, "lies in the productivity gains that can be realised".
These can be obtained in three ways. The first is standard part-time work, where an employee simply works fewer hours or days than the conventional worker and improves his or her individual performance. The McKinsey team found that a reduction in hours led to computer operators improving productivity by an average of 20 per cent without increasing stress levels.
Second is cyclical part-time. This allows peaks and troughs in demand to be handled more efficiently. In industries such as banking, retail and tourism companies can reduce overtime costs through annualised-hours contracts or deploying part-timers to supplement core full-timers.
Finally, shift-based part-time work can extend a company's operating hours. In manufacturing industries with expensive equipment capital productivity can be increased by operating more than one shift per day. Even if union agreements prevent full-time shifts being adopted, short "twilight" shifts at the beginning or end of the day can make a significant difference.
Governments can also gain from this approach. As an employer, the public sector can use innovative part-time schemes. "If governments want to capture the considerable savings that are possible with more widespread flexible part-time work, it is in their interests to widen the gap between part-time wages and unemployment benefits to make working part-time the more financially worthwhile option," concludes Mr Hagemann.
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