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Colleagues pitch in to ease the pain

To avert layoffs, employees raise their hands for pay cuts, furloughs

By Erin Ailworth
Globe Staff / March 29, 2009
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The names did it. Brandeis University English professor William Flesch knew balancing the budget of the school of Arts and Sciences meant cutting jobs. But when he studied a list of staff members whose positions were in jeopardy late last year, Flesch balked. He envisioned the faces of people he knew and liked.

"It strikes you to do anything you can not to have to fire people," said Flesch, who served on a committee charged with overseeing layoffs.

For him, that meant donating 1 percent of his salary to help retain employees who worked in nonteaching positions in the school. He urged other faculty in the department to do the same. About a third of them responded, raising $120,000 - enough to save two of seven jobs scheduled to be eliminated.

As the economic downturn persists, specialists who follow workplace trends say more employees are trying to save colleagues' jobs through voluntary pay cuts or freezes, furloughs, and donations. At Beth Israel Deaconess Medical Center in Boston, for instance, executives recently agreed to take a salary cut and doctors donated more than $350,000 to preserve several hundred positions. Similar outpourings have rescued 10 to 15 jobs at Gentle Giant Moving Co. in Somerville, and about 15 at AEW Capital Management, a real estate investment man agement firm based in Boston.

"There's this sense that we're all in this together," said Kathie Lingle, executive director of the Alliance for Work-Life Progress at WorldatWork, a human resources association in Arizona. "That's different from other recessions."

In a Suffolk University/Boston Globe poll on the economy conducted last week, 62 percent of the employed people who participated said they would accept a pay cut to save a coworker's job.

Widespread hardship can spur altruistic behavior, said R. Jay Wallace, who teaches moral and political philosophy at the University of California at Berkeley.

"This economic crisis is just bigger than any that most of us are familiar with, and it's likely to affect all of us: that person in the next office or the next cubicle or me," Wallace said. "If you have the sense that we've got to do something to save the economy or to save millions of jobs, I think people are willing to take extraordinary measures."

One of those people is Jill Anderson, whose household took a double hit because of the shrinking economy. She and her husband work at Gentle Giant, where employees opted to take pay cuts or monthlong furloughs to prevent layoffs.

"Maybe for half a second, it was like, 'Whoa!' " said Anderson, the firm's interstate sales manager. But then she agreed to give up a little to benefit everyone.

"This is about good people, a sort of family," said Anderson, whose income dropped 20 percent because she worked fewer hours for several weeks. Her husband, Tom, director of interstate operations at the company, did the same, on top of accepting a 5 percent salary reduction.

To compensate for the loss of income, the Andersons are buying groceries at a supermarket known for discounts, reducing monthly credit card payments, eating at home more often, and putting off buying summer clothes.

Coworkers like Dara McKenna are appreciative.

"Hopefully, it'll help save the company, which will, in turn, save my job, all our jobs," said McKenna, a Gentle Giant mover whose hours dwindled as lagging home sales lessened the demand for moving services.

Ryan Falvey, Gentle Giant's vice president of organizational development, said employees have helped save the company $800,000 to $1 million.

"Everyone recognizes that these sacrifices have helped us hold onto jobs," Falvey said.

At AEW, senior executives agreed to a 5 to 15 percent pay cut, depending on their salary, and chief executive Jeffrey D. Furber said he may ask employees to consider a furlough.

"I wasn't sure how this would be received," Furber said of the reduced salaries. "But I got so many e-mails from people in the firm saying, 'Great idea. I'd rather see this than someone else in the firm lose their job or me lose my job." '

Colleagues' concessions have helped AEW employee Michele O'Brien stay calm whenever she dwells on her family's finances. In October, her husband was laid off from his sales job at a software company. Meanwhile, the couple's 17-year-old son is looking at colleges to attend.

"Having the comfort level of a firm that was proactive in the way that AEW has been makes it easier for me to sleep at night because I'm not waiting for the other shoe to drop," said O'Brien, an assistant vice president in marketing and client services. Even so, she said, the family has ruled out a summer vacation, eliminated its entertainment budget, and made other cutbacks. Cambridge Health Alliance, which includes three hospitals in the Boston area, has been working to avert massive layoffs since the fall, when Governor Deval Patrick unveiled state budget cuts that would result in $40 million less for the hospital group, which relies heavily on government funding. That could have forced Cambridge Health Alliance to shed about 600 jobs from a workforce of more than 4,000. The alliance saved half the positions by negotiating with the state for aid and reducing expenses drastically. In an attempt to prevent additional cuts, Cambridge Health Alliance executives recently agreed to a 5 percent pay cut effective this summer. They will also donate 40 hours of wages each, and give up bonuses and other incentive-based compensation.

"The idea is to save jobs and preserve the mission of the hospital, not just balance the budget," said Doug Bailey, a spokesman for the alliance, which will save between $600,000 and $700,000 through the executive-level cutbacks. "And I think people are getting that."

Giving up compensation to save jobs seems to be a relatively new phenomenon, according to Lingle, the human resources specialist. It is rooted in established workplace initiatives, such as programs that allow employees to donate vacation time to help an ill coworker.

"In the workplace, it's the people who get the job done, and that's always where salvation is going to lie because they're on the front lines," she said.

Among all the goodwill, however, there is some tension. As people struggle with their personal finances, some may question whether they can afford to help others. Peer pressure also can play into someone's decision about giving up a raise or accepting a furlough, especially if coworkers go along with job-saving efforts, said Carolyn Marvin, professor of social ritual at the Annenberg School for Communication at the University of Pennsylvania. And when pay cuts aren't evenly distributed, some employees might believe they are being asked to shoulder too much of the burden.

"What is the proper sacrifice and who should be asked to sacrifice - those are the questions that we have to negotiate," Marvin said. "These are real prices that people are paying, and so it's all the more remarkable in some way when people are able to look beyond themselves and help others who are struggling even more than they are."

Beth Israel Deaconess chief executive Paul Levy said some of the e-mails he has received since the hospital reduced its layoff numbers have addressed the fairness issue. One employee said all employees, including those at the low end of the salary range, should have their wages frozen.

But an e-mail from an administrative assistant offered a more typical response, Levy said.

"I don't make a huge salary," wrote the woman, who is a single mother and holds a second job outside the hospital. "I can't offer much, but I would like to contribute $100 to the fund. I hope that helps a little in saving someone's job even if it's not my own."

Erin Ailworth can be reached at eailworth@globe.com.

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