Same Pay for Shorter Hours Adds Up to Profits
For several years in the 80s, I broke my heart trying to devise projects for the province's quality of working life centre.Foiled by employee apathy and employer conservatism, the program couldn't seem to offer tangible enough rewards for all the players, much to the chagrin of both union and management devotees.Now, in the era of downsizing, you don't hear much talk about the gains -- both ethereal and material -- of "meaningful work.''So I was buoyed last week by the visit of a cheery U.S. midwesterner, Ron Healey, who believes he has his finger on the pulse of an industrial changeover as momentous as Henry Ford's assembly line and the eight-hour day.Healey believes the road to increased productivity lies in cutting hours -- not workers -- and he specifically advises CEOs to get more for less by paying employees for 30 hours' work at 40 hours' pay.The passionate crusader (who spoke to a closed-door meeting of human relations managers hosted by Barbara Hall and to a gathering at the Quakers' Friends House sponsored by 32 Hours: Action for Full Employment) isn't a union activist, a social planner or an academic.Rather, he's a turnaround management consultant who makes his money bailing out firms in crisis.Just ShrugsIf his proposal sounds like insanity, Healey just shrugs."Insanity is doing the same thing as you did before, and expecting different results,'' he says."I wouldn't be getting the attention of CEOs except that I've saved my companies anywhere from half a million to $3.4 million,'' he says.At one of his showpiece plants, Metro Plastics of Columbus, Indiana, customer returns went down 72 percent, scrap was cut by 11 percent, machine utilization increased by 22 percent, and a company that once had problems recruiting workers had lineups at the gate.Unlike radical campaigners for shorter hours, Healey has downed the ante from 32 to 30 hours for 40 hours' pay. More important, he sees 30 hours as a strategy for solving employers' problems recruiting and upgrading the already-employed, not for sharing work among the unemployed.It's the extra value added by 30-hour workers that makes the cash registers sing, he says. That's why he believes this change will be driven by voluntary private-sector needs, not legislation.A sort of classic aw-shucks guy, quick to brag about Indianapolis as the capital of amateur sports and to praise "you folks in Toronto'' for our excellent public transit system, Healey trademarked his company name, 30/40, oblivious to the fact that it's a century-old slogan of militant labor.Addictive NeedsCurrent practices, Healey claims, meet "addictive needs, not developmental ones.'' Parkinson's old law about the amount of work expanding to fit the time available is about neurotic behaviour, not productivity.Workers who pace themselves for eight hours are pacing themselves for the hours, not the work. They are filling time, not working it, he says.When talking to fellow executives, Healey likes doing a little caricature of time on the phone, at the water cooler and coffee dispenser, logging onto skin and solitaire sites on the Internet.Let them do their socializing on their own time, he says.Six hours is what gets the most out of modern workers, he says. Otherwise, "all you have is somebody at work, with the emphasis on body.''That's also why he insists on the six-hour day, rather than the four-day week, as the way to get to 30 hours. And why he scorns the increasingly popular trend toward four 10-hour days.Companies don't call on Healey until they're in crisis, he admits."Until the pain is greater than the cost of the cure, people won't change,'' he says.The firms that contract him face a crisis of rising expectations. They're going broke because they can't keep up production and quality to meet demand, not because nobody wants what they sell."There are two ways to go broke," he says, "not enough work, or too much.''In his plan, employers get more than 30 of the old hours' worth of work because workers give them 30 "flat-out" hours. Absenteeism drops, turnover drops, accidents drop, lateness disappears.Morale and company loyalty shoot up.The hidden costs of 40-hour weeks show up immediately, this time on the company balance sheets.The fact is, as Healey realizes, employers may have embraced technology as a way to displace labour, but every advance in technology has made them more dependent on their workforce.Henry Ford understood this.Although the assembly line seemed to put technology in command, reducing the worker to a cog in the machine, assembly lines gummed up when operated by indifferent workers on 10- and 12-hour shifts.Some old-time capitalists knew that this principle operated with semi-automated factories, too. In 1930, W.K. Kellogg, one of a group of self-proclaimed "liberation capitalists,'' introduced the six-hour day, 30-hour week.Trumpets ResultsAfter five years' experience, Kellogg trumpeted the results: labour unit costs down 10 per cent, accidents down 41 per cent, days lost due to accidents down 51 per cent."We can afford to pay as much for six hours as we formerly paid for eight,'' company officials bragged. The experiment was phased out by the end of the second world war.Still, Healey says the firm's pioneering snap, crackle and pop are needed by today's leading-edge companies.His work represents what he calls a "quiet revolution'' in industrial psychology.Hitting WallIndustrial psychologists keep hitting the wall because they try to work on motivation, not need, he says. The way to motivate people is to deal with their need, which is to have more time without sacrificing income.Before people will buy into this level of commitment, they want a reward more fulfilling than meaningful work -- something we never twigged to in the old quality-of-worklife movement.It just so happens that the satisfaction of this need is critical to goosing productivity.Indeed, for all the smart technology, productivity increases since 1973 have limped along at one per cent a year, half what they were earlier in the century."We're already getting the maximum productivity from technology,'' Healey says. "To get to the next level, we have to get to the maximum of human productivity.''Employers, it turns out, are the ones who pay when work is a diversion from life.