A Shorter Work Week for a Cut in Salary—Is it Worth It? Elaine Varelas Weighs In

Is a four-day work week at a 15% pay cut a good deal? Elaine Varelas provides some considerations.

Ask the Job Doc.
Ask the Job Doc. –Boston.com

Q: My company announced an organization-wide offering for employees to work a four-day week at a 15% cut in their current salary. It’s being billed as a flexible workplace initiative, and as a parent, an extra day at home would be helpful, but I worry about potential consequences. Is this a good offer or are we being scammed?

A: Part of workforce planning involves matching the needs of the company with the needs of the employees. Your organization might be going through a slow time right now, but if the outlook is positive, they could see this arrangement as a good temporary solution to current circumstances. Financially, you’re getting a great offer because you’re cutting out 20% of your work week while only taking a 15% cut in pay. Many other organizations facing a similar situation would implement a lay off, but your company is instead trying to find a solution without having to take that step. So, no, I don’t see this as a scam at all—I see this as a potential win-win situation for both the organization and its employees.

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It’s always smart to examine what the consequences of any decision could be, especially one that impacts your career and financial standing. The first thing you need to do is get clarity on the details of the arrangement. Do you retain 100% of your benefits or are those impacted as well? Does taking this offer affect promotions or yearly bonuses? Is the workload being reduced or are you being asked to do five days’ work in four? If you don’t accept the arrangement, what does that mean for you? If you do ultimately accept the reduced work week, make it explicit that you remain serious about your career and future with the company. Tell your manager “I’m eager to get promoted and take on more responsibility. My wife is in medical school right now/my husband travels extensively for work, so this arrangement makes the most sense for us, and it does not negate my commitment to my future.” Make sure that the company knows this as a temporary situation for you. It’s okay to ask if a reduction in force does occur during this arrangement what your benefits would be based on—because you want them based on your original full compensation. Gain a full understanding of the deal and emphasize your dedication to your job before accepting.

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You also have to assess how things balance out in your personal life, whether it’s childcare, transportation, or your partner’s schedule. If you buy a monthly train pass, only using it four days a week doesn’t make the pass cost any less. Maybe your day care doesn’t let you send your kids for just four days a week or your parking pass might be paid weekly instead of daily. Estimate the costs of these kinds of expenses and make sure the extra day off is still financially worth it—or feasible—for your specific situation.

There are other unintended, less-than-positive consequences, from both the employee and the company perspective. For one, the organization could determine that the work you do is easily accomplished in just four days, impacting the future status of your role to being permanently part time. Or the work may not pick up as quickly as leadership anticipated, impacting employee morale and potentially resulting in attrition of key talent. While this arrangement seems to benefit both employees and the company, especially with how they’ve proportioned the cut, some people can’t afford to take a 15% pay cut—even with an extra day off—so the organization may be putting themselves at risk for good people to leave. Look around at what you know and can observe about the organization. Is business down? Try to assess if there is cause for concern about the long term based on the organization’s business as well as the value of your position to the company. If your role is secondary to the primary focus of the business, consider what the future of that position looks like. Consider, too, the information that the company learns from who accepts this offer and who doesn’t.

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Ultimately, you are playing the same game the company is—trying to see the future. Will the business pick up? Will your financial situation stay the same? None of us can predict the future, so if this is a great opportunity for you, enjoy it and stay alert to what is happening at the company.

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