Where is everybody? Having enjoyed over 30 years of consecutive growth and improvements in living standards, we’ve become accustomed to an increasingly cushy lifestyle. There’s now a push for a 4-day working week whilst keeping weekly earnings unchanged, which is likely to gain widespread populistic support. But how is the extra 20% of work going to get done? And how does that stack up when employers don’t even get applicants now?
The magic recipe being sold by a Federal Senate committee is the 100-80-100 model where employees retain 100% of the salary while reducing their hours to 80% and maintaining 100% productivity. I’ve always maintained that if any person is 80% productive that’s as good as it’s ever going to get. So in theory, it’s hard to argue with the concept. But theory is not reality. Even a machine can’t run 100% of the time. In fact, a mentor of mine ran by the philosophy that his most successful sales person only needed to work 5 minutes every day – however as it was impossible to know which 5 minutes, they had to be there all day.
A growing trend in marketing the past couple of years has been the rise of companies using advertising media to attract employees as compared to selling their products. The prices charged have therefore been able to be increased, because if you don’t have enough people or resources to deliver on your promises, why not use higher price as a demand regulator? This has been one of the factors driving inflation.
Having had exposure to working overseas, Australians generally work hard and play hard. We not only put a lot into the hours, but we’re a decisive bunch who make quick decisions and get on with the task at hand. I recall a colleague who took a job in Asia, and after a few weeks his 2nd in charge came to him and explained that the staff were being overworked and needed time with their families. Culturally, it was not acceptable for the employees to arrive after or leave before their manager. Not having any family himself, he therefore went for a 10 minute walk to a local coffee shop at a reasonable finishing hour, and when he returned to the office found it empty. Problem solved, and everyone achieved the same amount of actual work.
However, Australian average annual labour hours are only 55th highest in the world (of 66 measured) at 1,613 hours. Our trend has seen a progressive decline from 1,852 hours in year 2000 (it was steady before then). Top-of-the-list Cambodians work 2,455 hours by comparison, and mostly that’s hard physical work (63% employed in agriculture or industrial roles). Australians are 80% in service roles – roles where the chargeable output is highly correlated to hours actually worked, think for example a hair dresser, doctor, lawyer or barista. Even in our industry, people ask what the hourly rate is, when it’s the total cost of the job that should matter.
We have to be careful how we automatically interpret these figures, as some Australian awards “entitle” people to have a full 6 months off once all leave is now accounted for, which no doubt brings down the average somewhat. We also have a much higher proportion of part time employees, mostly by choice. On the other hand, I know lots of people working 60+ hours per week. So an average number is just that, but it does mean that we have less hourly capacity in our economy compared to many other countries.
There aren’t many people who wouldn’t appreciate more time to do what they want to do whenever they want to do it. Employers have become much more flexible in recent years and have adapted with more flexible hours for employees where possible. This is part of evolution, trying to constantly improve life.
The problem for employers in all this is how will the work get done, and who will pay for the extra costs? Already now, the good workers are close to breaking point (with many experienced people choosing to retire early), and there isn’t a work ready pool of people to tap into to add to the workforce. If someone is off sick or on holidays, the tensions rise as the work load somehow still must be done properly and timely.So how would this 100-80-100 model work? Outside of very sheltered work environments (where there is no customer to look after, which rules out most roles within the private sector), it’s difficult to see how it could work. A farmer needs to milk the cows every day. Shops and food venues can’t simply improve productivity and fit 100% of the work in to 80% of the time – there are only so many tables available, and I’m sure we’d all be complaining if these facilities were only available 4 days a week (mathematically they’d be closed nearly half the week, and given the push that employees should also set their own hours, they’d with a high probability be shut the same days their customers are off).
Further, rents and other costs will have to be spread across less outputs. Prices of all goods and services will have to go up, so purchasing power will be reduced due to further inflation (pushing interest rates up too, creating a vicious cycle). Most people spend more money when they aren’t at work than when they are busy earning it. So whilst we might get newfound time, our costs to have that time would also rise.
If 100% of the work can suddenly be done in 80% of the time, I’m looking forward to seeing who can prove the concept. If it could be done, why haven’t they already reduced their staff by 20%, and paid the remainder 25% more?
I’m fully supportive of improving productivity to reward those who contribute with both a better lifestyle as well as financial comfort. However, it’s simplistic to think that what everyone does currently can miraculously achieve the same required output in significantly less time. What’s needed is a cost/benefit analysis of every requirement on businesses and reduce those tasks and costs that add little or no value. Review things like checklists, paperwork for the sake of paperwork, task duplication, frequency of inspection intervals, reporting requirements, reviewing why 2 people are doing a 1-person job, site induction requirements for trained professionals, etc. We need to be both doing the right things (effective) and doing them right (efficient).
Reducing these little “luxuries” might allow us to enjoy actual luxuries instead. A shortage of people indicates we need to work out how to do more with less. Otherwise, something’s gotta give. Corporate history is littered with once mighty companies that lost sight of what they were doing and why they were successful.
Words from the wise
“It’s not the hours you put in, it’s what you put in the hours that counts.”
“Efficiency is doing things right. Effectiveness is doing the right things.”
People are a business’s greatest Asset. Without good people, nothing gets done.
As always, onwards and upwards!
Fred Carlsson
