The article by Pilita Clark about dilemmas in new ways of working is capable of a more rational solution (“Work from home if you want but don’t expect a pay rise”, Business Life, February 19).
The pressure for shorter working hours and working from home has presented many organisations with a problem. How to respond to this trend? It is time to conceive a way of working as revolutionary as that described by Adam Smith, the 18th-century Scottish philosopher and economist, in his theory of the 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 four days what they previously took five days to do, I could cut my wage bill by 20 per cent. I could do this by firing 20 per cent of my workforce or paying my existing workforce 20 per cent less.” Sounds logical.
It is irrational if, as quoted, working from home is more productive and is worth the equivalent of a 6 per cent pay rise. Why not a 6 per cent pay cut to cover the previous cost of commuting and disruption?
But obviously, implementing this might cause a certain amount of dissent.
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 change in response to supply and demand, what I call the “day pricing” model prices days rather than airline seats in the same way. I have also assumed that the requirement some organisations have for staff is potentially for all seven days of the week (in health, transport, hospitality sectors).
The assumption is there are some posts that need to be filled all the time but others that don’t need to be covered seven days a week or even for five days a week. There are also some days of the week that need more or fewer employees to be present at the workplace. 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.
The challenge is how to accommodate this and keep your workforce happy and productive. So, you will need first to carry out two analyses. How many people in each part of your organisation do you need and when and where do you need them? What days of the week do your employees ideally wish to work at home or in the workplace? Popular and well-subscribed days have a lower tariff (supply) while unpopular and less well-subscribed days have a premium price (demand). Just like airline seats.
This will enable you to determine an equilibrium market price for 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, thus determining the income they would receive by working their chosen schedule.
Complicated? Not really. Could be done on a sophisticated spreadsheet. But artificial intelligence would certainly do better.
Mark St Giles
Chairman, Cadogan Financial
Somerton, Somerset, UK
