This CEO cut his employees’ salaries by 20% and implemented a 4-day work week to avoid layoffs and save the company. Here is what happened

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“There is no strategy for this”: This CEO cut his employees’ salaries by 20% and implemented a 4-day work week to avoid layoffs and save the company. Here is what happened

See if you can follow this calculation in the workplace: 40 hours – 8 hours – 20% salary = 1.

Translation: For a Canadian procurement software company, shaving 8 hours off an employee’s 40-hour work week, with a 20% pay cut, amounted to a job saved.

This clever equation adds up to another significant number: zero layoffs.

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Vancouver-based Procurify implemented the solution in the early days of the COVID-19 pandemic under the leadership of co-founder and CEO Aman Mann. You can classify your creative approach under “walking the talk,” because the software company’s slogan is “smart expense management.”

“We built Procurify for the worst of times, not the best of times,” Mann says. told Employee Benefit News. “Our philosophy has always been: “How can you help save jobs, protect your team and your business?” »

Solution feedback

It would be one thing if Mann, whose business dates back to 2013, put an iron fist on his staff. Instead, he pitched the idea to employees to get their feedback before pulling the trigger.

“It was a unanimous yes across the board, with the exception of one person who couldn’t be a part of it and chose to opt out,” Mann said. told CNBC.

Not that Mann wasn’t cautiously optimistic: “There’s no guide to this.” »

Whatever the reason for this lone worker’s departure, they may now regret it. It took Procurify about three months to get back on solid footing, after which the company’s budgets returned to normal – with everyone’s salary restored to 100%.

Learn more: Retire richer: why people work with a financial advisor retire with an extra $1.3 million

4 day work week

But why stop there? Rather than returning to a traditional five-day week, Procurify has adopted the four-day work week as permanent. Mann said he noticed how focused and energetic the staff was.

“Everyone’s mindset just changed,” he said. “It was such an incredible experience to see that and I decided, ‘Well, we’re not going back.'”

Mann isn’t alone in adopting a shortened work week to make his staff happier and more productive. In fact, it’s a movement that traces its roots back to an organization called 4 Day Week Global.

The company is the brainchild of Andrew Barnes, a successful New Zealand entrepreneur who hypothesized in 2017 that a shortened week would have a positive impact on employees and his organization.

Barnes implemented a trial and it was considered an unqualified success. Shortly after, Barnes and Charlotte Lockhart co-founded 4 Day Week Global in 2019 to see if the results could be replicated, with employees receiving 100% pay for 80% of time worked with 100% productivity goals achieved.

Many four-day work weeks tests were carried out worldwide with the help of 4 Day Week Global, give positive results. The non-profit organization invites businesses to try their luck.

Ultimately, caring bosses like Mann reinforce the enlightening, albeit hard-won, lessons of the pandemic. It is now accepted that employees prefer to work from home or in a hybrid situation. A four-day work week maybe it’s not an exaggeration.

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This article provides information only and should not be considered advice. It is provided without warranty of any kind.

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