‘The four-day week is the optimal option’: how industrial giants survive in self-isolation
The coronavirus pandemic has seriously damaged the economy, but leading companies are looking for an opportunity not to lay off their employees to the last
The optimal thing enterprises can do during the coronavirus pandemic and the economic decline is to make the working week shorter. In any case, it is much better than laying off workers, experts think. And some large companies in Russia and abroad have already taken this step. By the way, the idea of switching to a four-day working week was heard from the mouth of top state officials as early as a year ago, but the situation was different then. Realnoe Vremya’s correspondent found out why leading international corporations were making such a step.
The coronavirus pandemic has hit all spheres of life, it also has wreaked havoc on the economy. Production downtime during general self-isolation has negatively influenced the financial situation of enterprises. Oil companies have suffered twice more: prices for black gold have recently gown down. Now many have to adjust to existing conditions. Leading companies have decided to reduce the working week not to cut the staff and save valuable personnel.
For instance, SIBUR (staff is equal to about 23,000 people) is switching to a four-day working week. The holding is shifting almost a fourth of the staff to the new working schedule — the headquarters in Moscow and administration and management staff in regions. So the company hopes to reduce possible losses by a third. The corporation is also reconsidering several projects and reducing costs on contractors’ services.
Alrosa (38,000 employees) has already shifted all the management in Moscow and Mirny (Sakha, Yakutia) to the four-day working week. The management of all subdivisions of the company has also had a shorter working week.
Russian Railway PJSC (over 700,000 workers) has taken analogous measures. The number of trips by Russian Railway has reduced since March, an economic fall was seen throughout the first quarter of 2020. And Director General Oleg Belozyorov took such a measure as an alternative to staff layoff.
Krasnokamsk Wooden Toys Factory (Perm Krai), Yekaterinburg Metro, Russian Forbes and others have taken such a step too. As for Tatarstan, KAMAZ too is getting ready for such a scenario: the Chelny lorry manufacturer depends on supplies of components from China. And the factory can switch to a three-day working week from 15 June.
Car factories have begun to stop due to the coronavirus in Russia. Volkswagen and PSA have announced plans to suspend the operation. Cars have stopped being manufactured in the factories of PSA и Fiat Chrysler in Europe. Renault, Ford и Nissan have announced their plants in Spain have stopped in Spain, Volkswagen is ready to close production due to a shortage of components. Tesla has agreed to stop its factory in Fremont in the USA.
Let’s remember Medvedev
The PRC began to switch to a 4,5-day working week as early as in March, in fact. Domestic consumption provides over half of GDP of the Celestial Kingdom. However, the volume of retail sales has dropped by 20,5% during the first two months because of the wave of the pandemic. According to Chinese authorities’ idea, with the transition to the new schedule, the citizens will start consuming more goods, use services and travel, which is to give a stimulus to economic growth.
It should be noted that last year as Prime Minister of Russia Dmitry Medvedev voiced an idea of switching to a four-day working week. His idea was backed in the State Duma right away. Some experts were sceptic about the initiative.
Tatarstan had a wait-and-see standpoint then. It was when a federal experiment was announced tens of Tatarstan enterprises joined too. It goes without saying that nothing was said about COVID-19 and quarantine and a high alert in the middle of 2019.
Among pluses of the shorter week, there was named a possibility of reducing stress and decreasing the rate of no show-up at work due to illness. This will also help cut costs on utility bills, cleaning, light, conditioning.
Understanding with personnel
Orders of enterprises are reducing, there are failures in payments for products supplied, this is why the top management of companies is working to reduce the working time. If executives aren’t taking any steps now, the enterprise can shut down tomorrow.
“First of all, the staff must be saved. In the deadlock situation, some are laying off personnel too. Tatarstan President Rustam Minnikhanov and Russian Minister of Industry and Trade Denis Manturov have supported the amazing idea: to save people, it is necessary to give 12,130 rubles not to the unemployed in the employment agency but accept lists of laid-off employees of enterprises so that they will receive this sum. When there are no pay and orders, many enterprises can’t or hardly can pay 12,130 rubles. While they would pay for their employee’s part-time job — a week or two. So on the one hand, Russian citizens’ income would be maintained, on the other hand, enterprises could provide their workers with a job as much as they can,” Mayorov comments for Realnoe Vremya.
Moreover, the interlocutor notes that workers should express understanding too.
“This allows making current legislation only by agreement with personnel. We would like people to understand it. It is not the guilt of managers that people turn out in such a situation. They should meet each other halfway,” he says.
“People can be laid off, of course, but this isn’t desirable, while they can switch to the four-day week. This already happened during the crisis in 2014-2015 and 2008-2009. Consequently, it is a softer measure. Companies fairly hope that demand will recover at least in the third quarter and they will go back to the standard five-day working week. By the way, Dmitry Medvedev too expressed the idea of a four-day week, but then they recognised that it was early yet, the economy wasn’t mature,” the expert says.
Razuvayev considers that it is irrational to lay off employees. Firstly, such specialists may not be found later. Secondly, the social aspect shouldn’t be forgotten. Thirdly, if everything is done legally, all additional payments must be provided.
“If we are talking about large companies, the level of their specialists is very high, and one doesn’t want to lose them like in the 1990s, they won’t simply be found then,” the expert explains. “This is why companies are doing their best to avoid lay-offs, and the four-day working week is the softest and optimal option I just welcome.”