When its tractor sales to Russia plunged this spring, Buhler Industries Inc. BUI-T faced three tough choices: fire 90 of its workers, shut down its tractor-making plant for four months, or put its affected staff on a three-day week.
It chose the latter. As of this month, 200 Winnipeg-based workers no longer work Mondays and Fridays. Under a federal program, they collect up to 55 per cent of their salary through employment insurance for the two days they're not working. It means a drop in pay - but they're keeping their jobs.
"We thought hard about what we had to do, and this was the best solution," said Todd Trueman, director of human resources. "At least this way, we can retain people so we'll be ready to resume production again."
All across Canada, the number of employers using the program in a bid to save jobs and cut costs is climbing: About 3,500 "work-sharing" (or shortened workweek) agreements are now in place.
Since the program was revamped six months ago as a part of the federal stimulus program, the number of workers covered has more than quadrupled - hitting 130,000 this month from 27,000 in January.
The sharpest increases are in Quebec, Ontario and British Columbia, according to Human Resources and Skills Development Canada (HRSDC). Manufacturers have been the main employers in the program, but interest is spilling to the tech, forestry, mining and oil sectors.
Without such programs, the country's jobless rate - now at an 11-year high of 8.4 per cent - would be even higher, economists say.
"It's helping alleviate the upward pressure on the unemployment rate," said Toronto-Dominion Bank economist Pascal Gauthier.
Colleen Coates, senior consultant at People First HR Services Ltd. in Winnipeg, has helped a slew of companies file applications for the program recently. "There's 50- to 75-per-cent greater interest in this program recently," Ms. Coates said. "It's significant."
The strategy satisfies both a short-term need - to reduce costs - and a longer-term objective to retain highly skilled workers so companies can quickly ramp up once demand rebounds, she said.
Under the program, companies can apply to reduce their workweek by one to three days, with workers receiving EI for the off-the-job time.
To qualify, companies must show that the downturn in their business is temporary, that demand has fallen more than 10 per cent, and that without work-sharing, it would have to cut jobs.
Benjamin Tal, senior economist at CIBC World Markets, said the chief benefit of the program is that it avoids layoffs and adds flexibility to the labour market.
"Is it optimal? No. But it's the best solution given the environment we're operating in," he said. "This is buying jobs and buying time."
Such workplace programs have been around since 1977. In January, Ottawa extended the maximum length of time a company's employees can receive benefits to 52 weeks from 38 weeks previously.
The department also loosened the criteria of who can apply to the program, and is trying to streamline the process for employers.
Photon Control Inc. PHO-X said its move to a four-day week saved 10 jobs. The Burnaby, B.C.-based company, which employs 30, was considering downsizing earlier this year as revenue for its temperature sensors and spectrometers plunged 40 per cent.
Now, all its staff are off on Fridays, collecting EI for that day. The decision was voluntary and everyone agreed to it. The company is saving about $17,000 a month, without the pain of firing workers.
"It really helps us further down the road, when we'll need the loyalty of staff to expand in new markets to compensate for this slowdown," said Helena Rebec, Photon's acting director of human resources.
In the manufacturing hub of Cambridge, Ont., MetoKote Corp., maker of metal coating for products such as grocery carts and auto parts, is on a four-day week. The change has saved about a third of the factory's 53 jobs, said plant manager Mark Soave.
In Laval, Que., 20-20 Technologies Inc. TWT-T has put 50 staff on a four-day week since March. The software developer is saving about $57,000 a month in reduced labour costs, said Christine Labelle, vice-president of human resources.
At Buhler, Mr. Trueman acknowledged that not everyone was happy about being moved to a three-day workweek - which was not voluntary.
"Our real goal is to get everyone back to work full time."
Work sharing at a glance
Number of federal "work-sharing" agreements in place across Canada
Number of workers covered by such agreements
1 to 3
Number of days companies can cut their work week