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HUMAN RESOURCES

Employee Swapping

Instead of making temporary layoffs, one company contracts out idle workers to other local businesses.
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Faced with having to make temporary layoffs, Rhino Foods president Ted Castle asked employees to help think of alternatives. They suggested contracting out idle workers to other local businesses -- and they volunteered to go!

"I could see how much it meant to Ted," says one volunteer, Steve Mayo. "And I wanted to make him proud." It's easy to see why the $5-million Burlington, Vt., specialty-dessert maker didn't want to lay off workers like Mayo. But the idea called for careful planning to address the following issues:

The client's values. After contacting companies interested in temporarily taking workers, Rhino's human-resources director, Marlene Dailey, examined their mission statements and, in some cases, visited their work sites. Gardener's Supply, a catalog marketer of gardening goods, and Ben & Jerry's, Rhino's biggest customer, both took workers.

Job responsibilities. The workers -- bakers by experience -- handled order fulfillment at Gardener's Supply and food production at Ben & Jerry's. Rhino made it clear that the job switch was not a vacation. Although the companies agreed to discuss any disciplinary problems with Rhino first, "if we got fired there," Mayo says, "we got fired here."

Job duration. Workers needed to know the situation was temporary, so Rhino limited the first assignment to three weeks at Gardener's Supply, where four people went to work. Both parties were so happy with the arrangement that they extended it by several weeks.

Pay. Workers received the salaries the other company normally paid for the same jobs, unless they were lower than the workers' salaries at Rhino; in that case, Rhino made up the difference. Rhino cut the workers' checks.

Benefits. Rhino continued to pay for the employees' health and dental coverage. Otherwise, Dailey says, "it would have meant a big hassle for us and the employees." Rhino also had to continue statutory benefits such as workers' compensation, but Dailey says that next time Rhino will ask client companies to chip in.

Communication. The Rhino workers continued to attend optional weekly company meetings after hours. When their temporary jobs ended, they told their supervisors and Dailey what they'd learned. One came back from Ben & Jerry's with an idea to rotate breaks for production-line employees.

Costs. Dailey lists some of them: the money to cover salary differentials and benefits for people who are not producing for Rhino, and much of Dailey's time, as well as that of founder Ted Castle, over the four weeks it took to set up the program. Those costs aren't insignificant, but they're cheaper, Rhino management believes, than the alternatives -- layoffs or the limbo of make-work. Now production has picked up, and Rhino may need to bring in contracted workers to handle a year-end rush.

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Last updated: Dec 1, 1993




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