The Second Round Of Cost Cutting: Creative Alternatives To Layoffs Are Win-Win For The Company And Employees

Accenture (formerly Andersen Consulting) offered its employees an alternative work arrangement when it needed to cut costs. Workers had the chance to take a sabbatical at a nonprofit organization of their choice. Stephanie Braun jumped at the opportunity, even though it meant a temporary 80 percent reduction in pay. Braun, then 32, manager of Accenture’s chemicals industry group, took a 7- month stint overseeing volunteers at the Fairy Godmother Foundation in Chicago, which grants wishes to the terminally ill 18 years and older. “It was an incredible chance to focus on something besides work, yet remain with the company. I had savings and am on my own so I could afford this,” Braun said. She also used her time off to study to be a docent at the Chicago Architecture Foundation.

For Accenture the idea was an innovative but risky way to cut costs and retain employee talent for the long term. Dubbed “FlexLeave,” the program began as a pilot for U.S. employees who had worked at Accenture for at least 12 months. Roughly 1200 of 17,000 eligible domestic employees initially signed on for the opportunity. Although they received only 20 percent of their salary, they continued to receive benefits and have use of their company laptops.

The Accenture story is typical of companies today that substitute traditional layoffs for custom-designed alternatives that maintain an employment relationship with the company at a reduced level for a period of time when business conditions do not warrant full-time employment. The results of such arrangements can be very rewarding and motivating to employees like Braun; it also helps the employer maintain its skill base and avoid separation transaction costs.