Offering employees paid sabbaticals on lower wages, and prodding them to go off and do something rewarding seems like a European, not to say Swedish, employment policy. But it is catching on among the most unlikely of US employers.
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.
The NYT this morning profiles one of the beneficiaries – Heather Eisenlord, who is being paid $80,000 to fulfil her ambition of travelling around the world.
Many companies, including KPMG, are now offering employees reduced working hours or paid sabbaticals, for similar reasons. Those that are paying for staff to take a break clearly believe it is worth doing it rather than laying them off, and attempting to rehire them later on if and when things pick up.
The first reaction of most people to hearing that companies are creating the professional equivalent of General Motors’ much-reviled Jobs Bank for assembly line workers – paying workers to stay at home – would be that it is a waste of money.
But I think it does make financial sense in an uncertain economic period. The cost of acquisition of staff for a professional services company – like the cost of acquisition of new customers for businesses that depend on subscribers – is extremely high.
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.
