WageWatch Ibrief Blog


Posts Tagged “wage forecast”


Can a move to a six-hour workday increase productivity and the happiness quotient of employees and their families and at the same time increase productivity and company profits?   In the U.S., more than 60 years after workers, through their unions, began organizing for an eight-hour day in the 1860s, President Franklin D. Roosevelt signed the Fair Labor Standards Act in 1938 for all workers to see limits on working hours — initially 44 hours a week, then phased to 42 and eventually 40 by 1940.

Today some businesses in Sweden are trying out a six-hour workday hoping to get more done in a shorter amount of time and ensure people have the energy to enjoy their private lives.   This change is purely experimental and a voluntary one that has not been mandated by law nor implemented nationwide.

A Toyota vehicle service center in Sweden’s second largest city Gothenburg moved to shorter days thirteen years ago.  The service center reported a happier staff, a lower turnover rate, and an increase in profits during that time.  The new system keeps the garages open longer and generates new business.  Employees are doing the same amount in the six-hour workday, often more than they did in the eight-hour day.  The service center reports that employees have more stamina to do this heavy work, and they have seen greater profits and customers because cars are getting fixed faster.

The most high-profile case in recent months is the publicly funded Svartedalens nursing home in west Sweden which started a trial of a six-hour day in February 2015 to continue until the end of 2016 when they will determine whether the cost of hiring new staff members to cover the hours lost is worth the improvements to patient care and boost of employees’ morale.  The nursing home has 80 nurses working six-hour shifts maintaining their eight-hour salaries while 80 staffers at another nursing home work their standard hours.  At halfway through 2016, the nursing home trying the six-hour workday has half the average sick leave, the nurses are happier and the care is better.  The study, however, equates productivity with the quality of care, which doesn’t necessarily translate to white-collar work.

Gothenburg’s Sahlgrenska University Hospital’s orthopedics unit switched 89 nurses and doctors to a six-hour day last year, hiring 15 staffers to ensure the hospital work got done.  The test was expensive, costing the hospital $123,000 a month, but no one has called in sick since it began and the nurses and doctors have been found to be more efficient.

A number of startup companies have announced that they are also testing the concept.  These include Background AB, a creative communication agency in Falun, Dalarna and Filimundus, an app developer based in Stockholm.  Linus Feldt, Filimundus CEO believes that staying focused on a specific work task for eight hours is a huge challenge.  During an eight or more hour workday, employees take frequent breaks and look for distractions and diversions such as social media to make the workday more endurable.  With the six-hour workday, staff members at Filimundus are not allowed on social media, meetings are kept to a minimum, and the company does it’s best to eliminate other unproductive distractions.

Most of the companies who have made the shift to the six-hour workday have reported a positive impact, from increased efficiency to better communication and fewer staff sick days.  A 2014 Stanford University research paper found a “non-linear” relationship between hours worked and productivity, as well as too much work, can actually impinge productivity.  According to a study by the Families and Work Institute, overworked employees make more mistakes.  Research has shown that condensing work into more efficient hours is very unlikely to hurt productivity.  There is no need to lower pay and in fact, companies are likely to save money through less sick and personal leave, less stress leading to better health, and lower turnover costs.

Opponents of the six-hour workday feel that if Sweden were to adopt this standard, the economy would suffer from reduced competitiveness and strained finances.  The six-hour day has not been embraced by larger Swedish companies and other towns in Sweden that previously tested shorter workdays ultimately abandoned them.  In the northern city of Kiruna, officials scrapped a six-hour day for 250 municipal employees after 16 years, citing high expenses and resentment among workers who were not part of the program.

The six-hour work day would be less accepted in the U.S. because the eight+ hour workday ethic is so deeply embedded in our culture.  According to Gallup’s 2014 poll, full-time employees in the U.S. work an average of 47 hours per week.  It will be interesting to watch how the six-hour workday plays out in Sweden.  However, even with encouraging results, it’s unlikely that the U.S. will shift to shorter days anytime soon.  The rest of the world (outside of Europe) a 40-hour work week would be a very nice improvement as well.

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives. WageWatch also offers accurate, up-to-date benefit surveys, salary surveys and pay practices data that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

Lodging Industry 2012 Wage Increases- Part 2

As reported in last week’s iBrief Blog, the lodging industry experienced across the board wage increases for both hourly and salaried employees this year. Overall, wage and salary increases were reported as 2.6% for 2012, which was almost double last year’s increase of 1.4%, as reported by WageWatch in its PeerMark™ Wage Survey of over 5,000 hotels nationwide. Last week, the iBrief Blog focused on hourly increases. This week in the Blog, we will review wage increases for salaried employees.

Managers in key front of the house and back of the house positions received salary increases in excess of the average wage increase of 2.6% reported in last week’s iBrief Blog. The largest salary increase went to Chief Engineers, who on average received a 17.6% pay increase in 2012. This trend is a continuation of what WageWatch reported last week where maintenance technicians I and II received on average 5.5% hourly wage increases. Pay for experienced technical positions continue to lead the way.

Other key management positions receiving above average salary increases in 2012 include front desk managers at 3.7%, marketing and sales directors with 3.9% average increases and food and beverage directors with a 4.3% average salary increase.

As reported last week, there was little difference in the wage increase for full service hotels and focused service hotels. However, the results of the Wagewatch compensation survey for salaried employees do show some differences between full service and focused service hotel employees. The most notable difference was the salary increases for general managers. Overall, general managers received a 1.9% increase in average base salaries; however, focused service general managers on average received only a 1.5% increase while their counterparts at full service hotels received on average a 3.5% increase. The number of full service and focused service hotels surveyed in 2011 versus 2012 was not statistically significant.

Another key trend we are beginning to see emerge in the lodging industry is the hiring of more college graduates to the fill the ranks assistant managers and the management training programs. Our ongoing discussions with hotel management companies as well as with the AH&LA discloses a need for filling entry level management positions that were reduced during the severe national recession of 2008-2009.

This is a trend worth watching. If the economy continues to improve next year and rate and occupancy levels continue to climb to the degree they have the past two years, we will begin to see increased interest on the part hotel management and ownership companies to explore expansion programs. Having a strong bench of middle level managers that can fill the positions at new hotels will be critical to their plans.

WageWatch, Inc. is the leading compensation survey provider for the lodging industry with over 5,000 hotels participating in its PeerMark™ Wage survey. The PeerMark™ Wage Survey is the only Web-based custom survey tool that allows individual survey participants to select their competitive set for comparison purposes.