WORKING

Hey, buddy, can you spare a work share?

By L.M. SIXEL Copyright 2010 Houston Chronicle

April 14, 2010, 10:06PM

Like many suppliers of equipment to the oil and gas industry, Tenaris struggled with the recession last year. Sales were down dramatically and it was clear the company's 11 manufacturing sites in the United States were producing more than the market could absorb.

The tubular manufacturing company, based in Luxembourg with 1,400 employees in Houston, had already had a small layoff and company officials knew they wanted to avoid another. They also wanted to make sure the company, which had grown by buying two energy supply firms, didn't lose the trained workers they had carefully cultivated and the progress they've made in merging corporate cultures.

In June, Tenaris made its 800 salaried employees in the United States an offer that, it turns out, many couldn't refuse: If they worked one fewer day each week — going from 32 hours a week instead of 40 and agreed to a 15 percent cut in pay — the company would guarantee they wouldn't be cut in the event of another downsizing.

“We made it totally voluntary,” said Germán Curá, president of Tenaris in North America whose headquarters are Houston. “We understood some might not be able to do it.”

More than 70 percent of the employees signed up for its “work share” program, he said. In some work groups, everyone participated. Typically people took either Friday or Monday off, coordinating schedules with co-workers so the work was covered.

“We knew we were getting hit by the economy like everyone else,” said treasury analyst Patricia Reavis, whose position gave her better insight than most into the company's finances. She said she immediately signed up.

To cope with the pay cut, Reavis brought her lunch from home more often, bought fewer exotic coffee drinks and renewed her library card. She spent some of her Fridays off getting her yard in shape and shopped for year-end gardening bargains.

‘It boosted morale'

Along the way Reavis learned new skills so she could pick up her co-workers' duties while they were off. She also appreciated that Tenaris applied for one day's worth of unemployment benefits for her and other work share participants each week.

“It boosted morale knowing your company was working to keep people,” she said. Other companies just slashed jobs or just cut everyone's paycheck, she said.

It turns out Tenaris didn't need to resort to another round of layoffs and the program ended in December when work got busier. But it proved so popular some employees asked if they could stay on the new schedule.

“We decided not to,” said Bruce Shaffer, human resources director. “We need people back.”

For its 2,400 hourly production workers in the United States, Tenaris came up with a variety of ways to keep them on the payroll.

At some production facilities, employees worked two weeks on and two weeks off. At others, they worked one week and then took three off. They received unemployment benefits when they weren't working.

At some of the plants there wasn't enough to do, so Tenaris used the time for intensive training, something companies typically cut when funds are tight. Employees also spent their work time tidying up.

“We've got the cleanest, well-organized plants in the States,” said Curá.

Companies are becoming increasingly creative in coming up with ways to make it through tough times without laying off employees, said Steve Werner, professor of management at the C.T. Bauer College of Business at the University of Houston.

Companies are becoming increasingly creative in coming up with ways to make it through tough times without laying off employees, said Steve Werner, professor of management at the C.T. Bauer College of Business at the University of Houston.

There is more focus on the downsides of downsizing, he said.

Layoffs can be devastating for both the former employees and the ones who don't get cut, unemployment tax rates go up and companies lose knowledgeable people, said Werner. Survivors don't feel safe, he said, and may end up leaving too.

Tenaris' approach to handling the downturn has helped with recruiting, said Curá. Word got around, especially on college campuses.

Hiring again

While production levels have improved, they're still nothing like 2008, said Curá. But as the energy demand picks up, they should get even better. In December, Tenaris started hiring again, adding both salaried and hourly workers to its ranks.

Looking back, Curá has one regret: “I wished we talked it up more.”

He recalled how he'd run into other executives in the middle of the crisis, and the first question was always how everyone was holding up.

Several were surprised when he explained the reduced salaried workweek and the two-week on/two-week off arrangement, recalled Curá, who wonders whether other companies could have avoided mass layoffs if they had adopted a similar program.

lm.sixel@chron.com

Nancy@CallNancyFurst.com