This is the basic premise of a short blog entry by FT’s John Gapper.
Skadden, Arps, Slate, Meagher & Flom, which as the New York Times puts it, is “a notably gruelling place for a lawyer to work”, is offering all 1,300 of its associates – employees below partner level a year off, on a third of their salaries, as a means of cutting costs and sitting out the downturn.
I suppose this mostly applies to those who are particularly in a better situation than their peers, because after all, paying a third or whatever fraction still does cost something. And when applied to a thousand or so employees is still worth quite a handful. For some, letting go of redundancies are just plain inevitable. But when companies have the options of paying a group of employees a fraction of their original compensation, instead of letting go of more, the first option is without a doubt much better. Gapper ended the entry by saying,
It is very expensive to find well-trained employees who fit well into any business and are highly-productive. Having found them, even if there is insufficient work for them to do, it is probably cheaper to keep them on retainer than to discard them.
Which is true to a certain degree. But then again 1, it depends on the kind of jobs are being vacated and 2, a lot of the people let go now are perhaps just as qualified as the others. The way I see it, what looks more appealing is to see less layoffs because it’s just brutal to see how bad things have become (and would become).