Are you ready to downshift?

Downsizing is the spectre that haunts Britain. But there is a new alternative to sweeping job cuts, argues Stephen Bevan
We are experiencing a revolution in the workplace. Delayering, downsizing, redundancies, cutbacks - all have left companies heading for corporate anorexia. The few employees left behind are over-worked and discontented, fearful for their jobs. They feel little love for employers: survivors wonder when will the reaper take them out. Just when everyone needs to pull together, when loyalty is at a premium, employees are disgruntled, angry and looking to leave.

In short, large companies are heading for big trouble unless they move fast. They are reducing their staffing to a core upon which, ironically, they are far more dependent than ever before. Yet that core has less reason than ever before to remain loyal.

Nowhere is this dilemma more true than in banking, where competition and electronic technology means that thousands of jobs are being shed and will continue to be lost for the next decade. Branches that once teemed with clerks and tellers are empty shells where a few people keep the machines running and provide a human face.

Yet just as the revolution has moved into its bloodiest phase, salvation seems to have appeared. This week, National Westminster Bank announced plans to cut the equivalent of 15,000 jobs, nearly a third of its staff. These days, that's barely news. The real surprise is that the bank proposes to make the cutbacks not by mass compulsory redundancies, but by work- sharing among employees. That means four-day weeks and part-time working for thousands of workers. Not redundancy, but less working.

It sounds like a publicity stunt, a big profit-chasing company suffering a temporary attack of conscience: it is hard for banks, busy celebrating bumper profits, to announce that they are sending thousands of loyal employees on to the dole queue. Here, it seems, is a way to appease bitter staff who have their noses pressed to the window as shareholders feast.

Perhaps. But cynics should take a second look at what NatWest is proposing. The bank's cost-saving measures could in fact be the pattern of the future, the blueprint of how big companies will cut their costs, while at the same time preserving some sense of stability, loyalty and well-being among their employees. It may well be that the brutal days of simple downsizing are numbered, and that the smart company of the future will instead opt for "downshifting", reducing the hours their employees work.

This trend is already becoming established in the United States. The Lincoln Electric Company, for example, recently promised employees with more than three years' service that they would not be laid off through lack of work. This dispensation has required some short-time working and a reallocation of work. But it is based on the belief that "relief from anxiety over job security frees people to do their best work". In California, New United Motor manufacturing (NUMMI), a Toyota-General Motors joint venture, has guaranteed job security in return for a reduction in the number of job layers and for more flexible working practices. This has resulted in increased trust between management and workforce. And "trust", as Francis Fukuyama, the American commentator, argues in his latest bestseller, is the gel that holds together organisations which may in a short space of time see rapid changes in their employees, their consumers and their share ownership.

It is clear that companies such as NatWest have clearly recognised that (leaving aside issues of ethics, public relations and a new industrial relations agenda, all of which are important) it makes sound business sense to take radical steps to make the changes necessary in their business to build up trust, motivation and confidence in their remaining employees.

Such a view of enlightened self-interest in other companies might well be welcomed by many employees. There is a growing voice in favour of a more forgiving workplace that can allow people to give their non-working lives more of a priority. Men - particularly fathers - have joined the chorus of complaint against the ever-longer working hours that seem to be the price of career advancement or of being able simply to stand still and avoid redundancy. One telling statistic is that a third of fathers of young children work more than 50 hours a week. Downshifting also offers opportunities to groups to whom the workplace has been inflexible. Women returning to employment, people with caring responsibilities for children or elderly relatives, older workers and people with disabilities might all benefit from a move away from the traditional model of full-time work, which conventional downsizing has tended to reassert. So, if NatWest blazed a trail for other companies to follow, it might receive the thanks of more than just its own staff.

But a sceptical eye should be cast upon moves to worksharing and the redistribution principle. It will be less welcome among those who actually need a full-time salary and for those who regard having a full-time job as critical to their psychological well-being and self-esteem. Reductions in working time, without a concomitant increase in feelings of job security might do little for individual confidence or a consumer-led recovery.

The biggest question mark against seeing downshifting as the nirvana, the long-awaited humanising of inevitable cost-cutting, springs from the fact it is driven by business imperatives rather than the desires of the workforce. The practice may make sense in the short run to companies such as NatWest that cannot afford to traumatise their structures with the scale of job cuts which the economics of their industry demand. But in the longer term, they may think that they have little choice other than to cut their workforce and consolidate the company around a much smaller staff. If this is the long-term outcome, and staff recognise it as such, then downshifting will soon be rumbled as a con, a device cynically used to manipulate employees to the company's advantage without offering them any long-term security. Such a result will do little to establish that rare and fast-disappearing glue - trust and loyalty - that is now needed more than ever to help companies through rocky and uncertain times ahead.

NatWest may be pioneering a bold, imaginative way forward. But the bank may still have a lot to prove to employees whom the Nineties has turned into cynics.

The writer is associate director of the Institute for Employment Studies at the University of Sussex.