Question

In: Operations Management

Accounting firm KPMG's UK offices wanted to decrease payroll costs while maintaining the company's commitment to...

Accounting firm KPMG's UK offices wanted to decrease payroll costs while maintaining the company's commitment to its employees. So KPMG gave its UK-based employees the choice of either volunteering for a four-day workweek at 90 percent of their salary (80 percent if fewer than 75 percent of employees signed up); a four- to twelve-week sabbatical at 30 percent of their base pay; either or both; or neither. Volunteering for the program, called Flexible Futures, triggered an eighteen-month change in the employee's employment contract giving KMPG the right to exercise the chosen option if and when it needed to. This allowed the company to reduce employee hours and pay on short notice and reduce the need for large-scale staff reductions if economic challenges arose.

To educate employees about their options, KPMG held conference calls, trained managers to answer potential questions, and posted a long list of questions and answers on a dedicated Flexible Futures page on its intranet. The website also included a calculator to enable employees to easily calculate what their take-home pay would be under any of the options. A link to KPMG's corporate responsibility website helped connect employees interested in sabbaticals with nonprofit organizations that needed accounting expertise.

Flexible Futures gives employees greater job security and control over their own destiny. This has allowed them to worry less about their jobs and focus more on their clients. More than 85 percent of KPMG employees signed up for at least one of the options. KPMG expects this to save the company up to 15 percent of payroll costs and to boost employee morale.

  1. How does this program help KPMG?

  2. How does this program help KPMG's employees?

  3. If you were employed by KPMG, would this program appeal to you? Why or why not?

Solutions

Expert Solution

This program is aimed at arriving a win-win situation. KPMG wishes to reduce it's payroll costs by reducing the number of working days. Also, KPMG wishes to achieve a highly motivated staff who would work diligently during the working hours and be more productive and contribute towards the success of the firm.

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The employees would achieve one more day off , and can spend it wisely into something more fruitful. The employees receive the pay as per their work, receive trainings to develop their skills and upgrade their knowledge. Thus, their morale is boosted and they receive the required motivation to work efficiently.

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Yes. Definitely. This program would help me save time such that I could spend the extra available time with my other professional and personal commitments. Further, the firm would be providing trainings for knowledge and skill development. This would benefit me ad strengthen me professionally.


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