This week we discuss the popular topic of Work-Life Balance. Watch now!
VIDEO SUMMARY
We are talking about Work-Life Balance. This is an issue that a lot of people are discussing. Companies are concerned about this. Everyone wants to know how a business can create great work-life balance for its employees. I always find these conversations interesting because there is a really simple solution to work-life balance that nobody is talking about.
Before we get to the solution, let us talk about the problem. American’s work long hours. Americans work longer hours than any other country. The data from the Department of Labor, puts the typical American at over 38.7 hours a week (but that includes part time workers). 40% of workers work more than 50 hours per week. 20% of workers work more than 60 hours per week. The finance industry is really high, where people can work from 60 to 100 hours per week. This can be pretty rough on employees.
Statistics posted by “The Motley Fool” https://www.fool.com/careers/2017/12/17/heres-how-many-hours-the-average-american-works-pe.aspx
It is important to understand why this happens. I am going to share with you, one of the dirty, little secrets of business. Every business understaffs, and there is a very good reason for this. Revenue streams are variable. You will have good months and bad months, and your cash coming in the door is always fluctuating. The problem is your labor cost is stable. The whole reason people take jobs, is so they can have a steady paycheck. Your labor cost is usually your highest expense. This means your cash inflows are variable and your cash outflows are stable. This is one of the most challenging problems in accounting, is planning your staffing to account for these fluctuations. In this environment, it makes sense to understaff because if you overstaff, the outcomes are worse for everyone involved. If you staff up, and you have a bad month, two things are going to happen:
- You will have people standing around with nothing to do, and the business will lose money.
- An even worse outcome is the business might have to lay people off.
As a leader, you want to avoid either of these scenarios, which means you want to be conservative in your staffing.
I do not think that understaffing is bad. It is a business decision. What I think is the real problem is when managers take advantage of understaffing. Let me explain a common scenario. An employee takes a job that is supposed to be 40 hours a week. The employee walks into the job on the first day to find 60 hours worth of work sitting on their desk. I find that most employees want to do a good job. Most employees want to impress their boss and get good performance evaluations. Since it is the first week of work, the new employee has a decision. Do they work 40 hours and go home, or finish the 60 hours of work. They decide to stay late and finish the 60 hours of work. The manager sees this and keeps their mouth shut, because they just got 20 hours of free labor they did not have to pay for. Since the environment is still understaffed, the employee comes in the next week to still find 60 hours of work. That is how people get stuck. Company’s try and do things like provide food and have a fun environment, but they are still taking advantage of their employees.
I am going to give you the simple solution to Work-Life Balance. It is called the 40 hour work week. This is something we already know about. When people talk about work-life balance, what they really want is time. The difference between a 40 hour work week and a 60 hour work week is an 8 hour day versus a 12 hour day. That is a big difference. With an 8 hour day, you have time to go home and have dinner with your family. You have time to spend with your kids, and watch them play soccer. You have time to spend with your significant other. You have time for your hobbies. And there are people out there that really like their job and want to work more hours, but that should be their choice.
The person who is ultimately responsible here, is our business leaders. I have seen managers that are really good at this, and others who are awful at this. It is up to the managers to tell their employees explicitly, “My expectation is that you work forty hours a week.” Unless the manager says that specifically, the employee is going to feel obligated to work late. The manager needs to acknowledge that the company made the business decision to be understaffed and there is more work than can be completed in 40 hours. The manager has to tell the employee to prioritize completing what they can, and then go home to their family. Now I am not saying that employees should not work longer during busy times, like fiscal year end or tax season. But that should be an exception, not the norm.
I realize I am making a lot of enemies with this video. There are a lot of businesses, especially accounting firms, that are really bad at this. There is a reason why companies should take this seriously. I want to get to the real issue that is going on. Everyone is talking about work-life balance. What all these conversations are really about, are workers grumbling that they are being taken advantage of. If businesses do not pay attention to this, things can go very bad very quickly. I think this is a really important issue, and the solution is so simple. It is so easy to solve. Just tell your employees they have a forty hour work week. The problem completely goes away. No one would ever talk about work-life balance again.
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Neither Zach De Gregorio or Wolves and Finance Inc. shall be liable for any damages related to information in this video. It is recommended you contact a CPA in your area for business advice.