The pressure is on!
The pressure for shorter working hours and working from home has presented many organisations with a problem. How to respond this trend? It is time to conceive a way of working as revolutionary as that described by Adam Smith in his theory of division of labour illustrated by the example of the pin manufacturer.
The first reaction of most employers is “if my employees can get done in 4 days what they previously took 5 days to do I could cut my wage bill by 20%. I could do this by firing 20% of my workforce or paying my existing workforce 20% less” Sounds logical. But implementing this might cause a certain amount of dissent.
There is a better way
So, I am suggesting a better way. This would enable employees to choose which days to work but for days to be individually priced according to the needs of a business or organisation taking into account employees’ preference. Just as airlines’ pricing models depend on supply and demand, what I call the ‘day pricing’ model prices days in the same way. I have also assumed that the requirement an organisation has for staff is potentially for all seven days of the week.
The challenge is how to accommodate this and keep your workforce happy and productive. So, you will need first to carry out two analyses.
The assumptions are
There are some posts that need to be filled all the time but others which don’t need to be covered 7 days a week or even for 5 days a week.
There are also some days of the week which need more or less employees to be present.
There are employees who for personal or family reasons prefer certain days to others.
There are employees who are prepared to work when others are not.
First, a detailed analysis of how many people and of what type you need on a given day of the week.
- Tuesdays may be quiet so staffing levels can be lower.
- Weekend staffing needs will depend on the type or organisation; hospitality may be busier at weekends but quieter on weekdays.
- Accounting and administration are not time critical and can be done any time.
- A business that is only efficient with a continuous process may need to be staffed all the time.
- A business that carries out once-off manufactures may not need all employees at the same time.
- Public services such as health and law enforcement may need to be fully staffed all the time.
- Others like some online services such as banking and finance might need more at weekends and fewer on weekdays. And so on.
- Retailers would need more staff at peak shopping days than on other days.
Second find out from your employees
- How many days a week they would like to work.
- Whether they wished to work from home, if that was feasible, or go to a workplace.
- Which days they prefer to work and., if that was feasible, or go to a workplace.
This will enable you to determine an equilibrium market price of each day based on an analysis of supply and demand and thus price every day by reference to the cost of employing a person that day. And for each staff member to select their income by determining which days they work and thus determining the income they would receive by working their chosen schedule.
To some extent this model is already in use with employers providing opportunities for part time work and paying ‘overtime’ rates for unpopular or excess hours above the standard, for example transport, hospitality, or retail.
But the day pricing model is much more flexible, and employee driven, where each employee can select from a variety of work options rather than employer driven, where the employer dictates the terms. It should be popular with both individuals and unions.
In the day pricing model employees could choose the days they worked and accept that they might earn more or less depending on which days those were. Some might choose a four-day week while others might choose a six-day week including the maximum of high-priced days. And others even a three-day week. For each person, their total pay would be the result of the aggregate of prices for the days they had chosen.
This is not the gig economy, piece work or an IR 35 problem. Employees would be employed, pay NIC and tax and enjoy all the benefits that an employed person statutorily does – pensions, holiday pay, sick pay etc.
There are some constraints
Of course, there are constraints. The number of days on offer in each price bracket is limited, just as cheap fares for advance booked airline seats are. So, if everyone chose to work only from Tuesday to Thursday they would have to vary their choice if all the days had already been sold. The initial calculation would need everyone to make an initial choice in order to create the initial pricing model. But some flexibility could be built in by allowing some interaction between higher priced and lower priced days and the possibility that an individual could move up and down the scale or make exchanges, if days in particular bands became vacant or they wished to vary the days they had chosen.
Employee choice would be limited by the total number of staff/days allocated to that particular price band. For example, there might be an upper limit of availability of Tuesdays, Wednesdays, and Thursdays, if a large majority chose to have long weekends and the price would be lower reflecting excess supply over demand. While those prepared to work at unpopular times would be able to earn more on higher priced days because of less supply. A couple could select the profile that suited their circumstances to adjust for childcare for example.
This is the way forward for the future workplace
This seems to me to be the most realistic approach to the modern workplace. It is not complicated but clear and simple, using concepts with which everyone is familiar. Any organisation adopting it would need to undertake quite a lot of initial analysis and accept the need for adjustment in the trial phase. It is a solution to the dilemma of changing patterns of work.
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