By Stephen Dowling
BBC News Magazine
British Airways has asked 30,000 of its staff if they would be prepared to work for nothing for up to a month to help the airline survive the global economic meltdown. How do you answer a question like that?
British Airways is feeling the pinch. Fewer Brits are jetting off to exotic locales, business class bookings are down 13%, and last year the airline made a loss of £401m.
Now it is asking for volunteers to work for nothing for between one and four weeks in order to prevent the company slipping even further into the financial mire. Its chief executive, Willie Walsh, has offered the scheme in the hope it might stop the need for compulsory redundancies, and is giving up a month's salary himself.
The scheme is, perhaps, appealing to BA employees' sense of the greater good.
BA is also offering unpaid leave and part-time working
So what would make people work for nothing? If you're a lowly worker, paying off a mortgage and juggling household budgets, what's in it for you?
Some people might think volunteering their time and effort would put them in their employer's good books - they make a sacrifice now, hoping that in better economic times they are rewarded for stepping up to the plate.
But professor of macroeconomics at Durham University, Parantap Basu, says workers need to think carefully about agreeing to such a deal with their employers.
WHAT TO CONSIDER
Can you afford to work for nothing?
Is your sacrifice likely to be rewarded?
Does it make sense in the long-term?
Does it improve your standing in the company?
Could you find alternative work of a similar nature?
Does the offer mean your job is not secure?
"It's completely driven by incentive," Prof Basu says. "If you are a worker with a good outside option you will not do it, you will not want to lose money.
"But if you quit the present job for an outside option, you have to ask yourself 'will the new job give me the same long-term security as the job at British Airways'?"
Prof Basu says the onus is on both the employer and the worker to make such an agreement work.
"We need to look at it from the perspectives of both the worker and the employer. From the worker's perspective, working for nothing signals two conflicting signals to the company.
"A short-sighted company may perceive this worker having no other outside option and thus in future this 'free' worker may be the first candidate to axe when a tougher time comes.
"The far-sighted company may perceive that this 'free' worker has a long-term commitment to the company and thus will treat this worker with greater care and respect."
Whether it is a good idea to work without pay, Prof Basu says, depends on the level of long-term commitment from both parties. "Commitment is a two-way street."
Workers put in such a situation in a publicly-listed company, for instance, could ask why shareholders were not being asked to make a similar sacrifice - perhaps giving up a share of their return.
They could also argue that if the company had previously been profitable - which BA was in the previous financial year to the tune of nearly £900m - that perhaps the company should be looking for other ways to tide themselves over in such difficult times.
Why work for free when the shareholders get the benefits?
In an industry with more casual employment - fast food for instance - working for nothing may not be in the best interests of the employee. Such companies have a high turnover of staff, and a worker is likely to find similar work easily without having to work for free.
British Airways says the first scheme, which was unveiled to staff three or four weeks ago, asked for them to volunteer for working unpaid, working part-time or taking unpaid leave, for a minimum of a month. A spokeswoman said more than 1,000 people had already expressed an interest in taking part in the scheme (they have until 24 June to sign up). Another request has asked BA workers if they would make a similar sacrifice for a two-week period.
Having your employer come to you with an offer to work for free, some argue, should be a spur for you to dust off your CV and look for another job; a company confident in its ability to ride out a recession or period of economic turmoil should not be forced to ask its staff to work for free. The words "panic management" have been used by some to describe BA's actions.
The Federation of Small Businesses spokesman says it is only large companies like BA that are in a position to propose such schemes.
"It is all very well for someone on a high wage to advocate this as they can clearly afford it. A small businesses' key asset is its staff and employers are doing all they can to hold on to them."
Sarah Smith, a senior research fellow at Bristol University, says: "Psychologists and sociologists have long held the idea of altruism and intrinsic motivation.
"There is now a growing economics literature on the importance of intrinsic motivation - in other words that people might want to work because they care or because they want to do something important not just because they are being paid to do something."
Ms Smith says in some cases we actually want to sacrifice our time and effort in order to fulfil a need to give something of ourselves- she cites social scientist Richard Titmuss' 1970 study into donating blood called Blood and Altruism.
"Paying them [donors], he argued, would reduce supply because people want to give blood for free - they may want to signal their altruism - and not be paid for it, or it could lead to the wrong people supplying it."
Ms Smith says: "I don't think that this is what the BA case is about. Isn't this a bit of belt-tightening in the short term in order to save the firm for the long run? In which case the managers are appealing to extrinsic motivations (keep the company afloat and secure employment in the longer-term). Whether the costs should fall on the workers is another matter
Here is a selection of your comments.
Surely a good response would be to offer to work in return for the salary-equivalent of shares in the Company? That way the worker's loyalty in the short term is repaid in the long term, and existing shareholders share the pain of the Company's short-term hardship.
Barry Sandell, Guildford, England
What BA are proposing is already quite common in the business sector I work in. It appears in various wyas from a small pay cut accross the board to being asked to work reduced hours for reduced pay or take time off unpaid within a certain period (which amounts over the piece to a small percentage pay cut). It's not a question of saying no - the alternative is redundancies and there are no other jobs (in this line of work) to go to. Why not - we share in the good times with pay rises, and is it not only fair to share in the bad ones with a pay cut, if it keeps more people in jobs? I would do it.
Last November my colleagues and I were asked not to take our salary. The choice given was accept this, or leave. The understanding was that junior staff would merely be paid late, as and when funds became available and senior staff would have to wait until times were better. All were also promised a bonus of a month's salary and interest on owed payments. I left the job in February as things were showing no sign of improvement and by that time the company owed me thousands. Now in June I am still owed thousands in salary alone and have gone to an employment tribunal to try and get the matter resolved.
Despite this, I think it is a good strategy for firms to use to try and survive in these times. That said I would advise anyone accepting late or suspended salary payments not to let yourself be bullied into it and for both sides to ensure that there are clear and defined expectations set for the future.
Fine - as long as they agree to cut me into a profit-share for when they get back into the black....
Working for free is not a job, but a hobby. If there are too many staff for the needs of the business, then some of the workers should be paid to leave, but if the Managing Director can't make the business work without charity from the staff he should go.
I have been asked to give up salary in the past to help save a company I worked for. In that situation I was offered shares in that company as compensation. Initially, the shares were worthless, but over time they became worth having. BA should be doing something similar. They should offer people who give up salary to save the company shares as compensation. That way, if the company recovers, the employees are suitably rewarded.
Austin Platt, London
I'm the majority breadwinner in my family. My wife works a few hours a week in a minimum wage job. There are no other jobs out there! I couldn't work for free and feed the kids! I couldn't go elsewhere either....
Yogi, Falkirk, Scotland
What about the ordinary worker who still has to pay the mortgage each month, utility bills, shopping, petrol, etc? These expenses still have to be met! And for a PLC to ask for rank and file workers to forgo a month's wages is outrageous. An agreement to shift any future profits to make up this shortfall (plus a reasonable amount of interest) would have to be an absolute minimum to get me to agree at least. But no, those profits will flow towards the shareholders. How about asking them to forgo any dividend payments for the next 2 - 5 years and see how far you get!
Ron, Ely, Cambridgeshire
Since retraining and qualifying as a counsellor I have continued working for free at two NHS GP surgeries for over 5 years. I'm described as a volunteer, of course, but I feel I'm caught in a trap. I need access to clients/patients (in an NHS setting that only sporadically values the input of sessional counsellors) but building up a private practice is neither easy nor very lucrative. I therefore earn money from other types of work. I don't even get any contribution towards my travel expenses and it costs me £10 to get to one of the surgeries. Now I only do a few hours counselling a week. Why do I keep on doing it? I believe in my new profession and I feel I'm making a difference to other people's lives and sometimes I may actually be helping to keep them alive. So if any BA employee would like some free counselling - I'm your man! You'll have to pay your own travel expenses to get to the surgery of course!
Ron Wallace, Crawley
Would your employer bail you out if you were about to default on your mortgage? No. So why would you? And what happened to the social contract?
Zhi Wong, London
The psychology of this situation is irrelevant. Most of those workers being asked to work for free for a month likely have little or no mortgage. Anyone with any kind of debt doesn't work for the fun of it. I couldn't go one week unpaid let alone one month as I wouldn't be able to pay back my mortgage
Many workers in private companies have had pay freezes this year but this is a bold move by BA. Maybe ask for a compromise solution - defer payment for "x weeks" worth of work until you either leave the company or the economic situation improves?
Simon, Kent, UK
Firstly, isn't it illegal to ask staff to work for nothing? What happened to the National Minimum Wage?
Secondly, isn't it putting undue pressure on staff? Those who say no because they genuinely can't afford to work for no pay (mortgage / children / household bills) could end up being seen as "slackers" or "not committed" and be the first in line for the axe in the future.
BA should give its staff an honest return for their labour - which is not nothing. It's unethical for BA even to ask its staff to work for no pay.
Doesn't "working for free" conflict with the definition of "work"?During BA's last year, when they were profitable, did they volunteer to increase workers wages? Or indeed in any year?
Surely management should be taking the free months before the rank and file workers who earn fractions of their pay?
Richard Whitehouse, Derby
Working for nothing changes your relationship with your employer. Instead of being a mechanical relationship whereby you do work for money, loyalty is added to the relationship. I would only work for nothing if I could be sure that my company would remain loyal to me in the future.
Arun Rakhra, London, UK
Yes! On the proviso that all my bills are paid for and living expenses and day-to-day needs are funded in lieu.
Nick Selby, Barry
Could I afford to work for free for a month? Yes I probably could. Would I? No. All the years the FatCat Bosses have creamed their huge incomes out of the company and NOW they say there is no money in the pot? Oh do behave!
Someone on a million quid a year would probably not miss a months money. Someone on £20,000 or £30,000 per year (or less) would. A lot.
Paul Parkinson, Sidcup, Kent