Dan Bean, Robert Musson, and Chermaine Li
WeOrg: The Freedom to Choose
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Summary
Retire-a-Little is a program that gives employees the chance to buy back one day a week so they can spend that time on other activities that are important to them. The notion stems from the observation that we spend many of our best years -- those when we are most financially secure and healthy -- engaged in activities that benefit the organizations where we work. Many of us put off until retirement the labors we are most passionate about, whether that's art, travel, athletic endeavors, or volunteer work. The Retire-a-Little program borrows time for the future so employees can live a more fulfilled life while they are younger and healthier. In exchange, they can give that time back to organizations when after they retire - an added benefit that allows the organization to tap their wisdom while allowing retirees to continue contributing and participating.
Problem
We spend 18-23% of our lives in school, 35-40% at work, and some 35-40% retired.
If we create a graph that shows our life resources (time, money and health) we see that availability of time throughout life can be represented by a U-curve. Over that curve we can show financial resources, which looks like a bell curve. A declining vector across the graph represents health.
From looking at the chart, we can see a fundamental problem: we have money when we don't have time to spend it, and we have free time when we may feel less secure about money and have problems that limit our energy and activity levels.
Add in the conflicting demands of relationships, continuing education, and philosophical considerations (for example, Jungian concerns about essence and dealings with humankind) and we can quickly see how difficult it is to make organizational life rewarding for the people who make up the organization.
Solution
The Retire-a-Little hack derives from our experience at Semco, and is based on an idea originally surfaced during our "Are You Nuts?" meetings. During these meetings only outlandish ideas (those that are received with, "Are you crazy?") are seriously considered.
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Sidebar: Semco’s “Are You Nuts?” meetings Once a month, anyone in the company can join one of these 3-hour meetings. The goal is to expand the possibilities of change. From this forum, we have produced several programs, such as: 1. Who Needs Headquarters? We eliminated ours some 10 years ago and started 14 geographically distributed open offices around São Paulo, where people would come and go as needed, neutering the possibility of hiring or controlling people by time spent on work. 2. The Lost in Space program, where college graduates were invited to spend one year (anchored by a Mentor) doing odd jobs and connecting themselves to any areathey desired. At the end of the year, they could choose where they wanted to work. Sadly, this worked too well, and some 80% eventually took what they had learned and left the company -- a third to became CEO¹s or business owners within 5-8 years! 3. Flex-time on the Assembly Line. Factory workers set working hours amongst themselves, with little or no involvement from managers. |
In the Retire-a-Little program, employees would buy back their Wednesdays. For 10% of their salary (which permits the company to hire more people) any employee who has been with the company at least two years may begin to buy back one day a week. They then begin to work Monday, Tuesday, Thursday and Friday; on Wednesday, they do what they hope to do when they retire. So, instead of climbing Mount Denali at 77, they do it at 29 or 42. Or they take up the violin (even if it is only to find that they don't have the talent for it). In any case, every Wednesday they dedicate themselves to that activity or hobby, or humanistic concern that only retirement would allow them to.
We chose Wednesday not to set up a strict rule—that's anathema to us—but to enable us to measure and test the approach and to deliberately set it apart from the weekend, so that employees could approach their endeavors with the same determined and industrious mindset they bring to work, rather than just turning it into a three-day weekend.
In exchange, they receive a coupon, which they can trade in once they retire, for two half days of work (say, Tuesday and Thursday mornings). This coupon is accepted by a collection of like-minded partnering companies, so that the individual has multiple choices and doesn't depend on one particular company's success in the long run. These coupons are redeemable at the face value of 10% of their time "purchases" before they retired, adjusted for inflation (that is, the value of the coupon corresponds to the total value of purchased days that is then amortized in two half days a week until it reaches zero).
Some of the specific of the "redemption" process would work as follows:
1. Redemption is optional--that is, if someone does not want to work additional days in retirement, he or she doesn't have to.
2. Participating companies would be obliged to redeem the coupons, but they would be protected by a ceiling on number of redemptions per year.
3. If there are more redemptions at a particular company than the company's limit for the year, other companies would offer opportunities to "cover" those redemptions. The group of participating companies, and individual limits on redeemable coupons would not easily affect the overall balance, given that the statistics of days to be redeemed would always be negligible to a pool of companies at any given time (see more on this in the next point). A second or third company would, therefore, be easily available.
4. The financial impact of redemptions on participating companies is likely to be small, and well offset by the gain in accumulated wisdom. There are several factors that would contain the long-term costs, including employees who move away or decide not to redeem their coupons. Even if a third of the employees decided to redeem their coupons, that would only add up to about 3% of working hours, distributed over two mornings a week - a number small enough for participating companies to handle without much trouble. Participants could also easily spread out the use of the coupons, using fewer per year to stretch out the work opportunity, making the redeemable numbers relatively small. On the other end, companies could easily contract for more hours from people who are proving very productive at 74, for instance.
Practical Impact
We can see several important outcomes from this effort at the individual, organizational, and societal levels.
* Individuals: greater satisfaction, longer productivity. Employees would become more devoted and happier as they see the organization is supporting them in pursuing activities they care about deeply. After retirement, they would continue to contribute to the organizations, bringing their accumulated wisdom gained over their careers. Continued productive lives well into retirement years.
* Organizations: committed staff, experienced advisers. Participating companies could expect greater engagement and productivity from their employees. As noted above, we would expect productivity to be about the same even at only 80% of time, given the employees' greater level of personal satisfaction and engagement. From retired employees, companies would gain a cadre of seasoned workers and professionals who would help younger employees take advantage of "institutional memory."
* Society: more people hired, more volunteers. As noted above, the funds that employees use to buy back their Wednesdays would be used to hire additional employees -- an eleventh employee for every ten who participate in the program. Meanwhile, every Wednesday society would see an influx of volunteers: productive people in their prime who are applying their energy and expertise to causes they feel passionately about.
First Steps
So how would an organization get started if they wanted to test this hack?
First, debate the idea to exhaustion. Test the theory, do the math, have people list what they would actually do with the time (for themselves), and how they would handle deadlines and targets without the use of their Wednesday. As with so many of our "are you nuts" ideas, I could come up with all kinds of reasons to hesitate. But this experiment is chiefy designed to push boundaries and test the future today.
Second, set up a relatively simple experiment to test the first part for some time without any loss. Just sign up employees who are willing to pay 10% of their salary to buy back their Wednesdays, and say that the coupon can only be redeemed (until further notice, negotiations and understanding) by that one company, assuming it is still in business. This would allow people to get started with the program, under the assumption that the terms, as they stand in the present, might already be the full execution of the deal. The post-retirement guarantees could be worked out over time, but they are not completely necessary for everyone to benefit from the arrangement.
Finally, be prepared for surprises. We found that what people want to do when they retire is not as awe-inspiring as we thought it would be. We thought people might become scuba divers or mountain climbers or write epic poetry. What we found was that people are looking to retirement for an opportunity to catch up on great books they’d missed, enroll in online courses at universities, or pick up a new skill or instrument. That was true for the 20-year-olds as well as for the 60-year-olds. It turns out that people were already doing a lot of adventurous and radical things in terms of sports or travel or activities on their weekends or vacations, but the Wednesday retirement time was about bringing a degree of internal growth, insight, and personal development to their lives.
January 5, 2012 at 2:45pm
Questions:
What if an employee wants to choose another day other than Wednesday? Maybe their "retirement" plan works well with 3-day weekends, for example?
Could an employee opt to bank "retirement" days for a longer sabbatical, e.g. to travel for weeks at a time?
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March 30, 2012 at 11:41am
It is great to have SEMCO in this list. I invite everyone to look more for this company and to read a lot of books and articles that Ricardo Semler has written. It has been an inspiration for me and it is one of the business cases that I use in my class "Humanistic Management" at Universidad EAN (Colombia).
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June 23, 2012 at 11:14pm
Great concept but I wonder how useful this would be for fast moving industries such as semiconductors, software or other high technology companies where constant innovation causes skills to be out dated quickly.
In some of those industries long term wisdom may not be as useful as the latest innovations, making it difficult for retired people to directly contribute to their original company or to the group of companies sharing this work.
I like the approach since it seems like a good retirement/work trade-off and it does seem to be good for the current needs of the economy (i.e. not enough jobs). This could easily improve the jobs picture for nation's that need it.
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January 2, 2013 at 2:20pm
Hi. I believe this is an excellent idea because it responds to one or two other challenges I've noticed in the 'wide world' over the past few years. There's a change in the demographics where the older folk are leaving work and there's less and less training (like apprenticeships) for people moving up. On the one hand you lose knowledge as people leave or reduce their activity, etc and on the other fewer people are training to replace them.
An example of this hack I saw recently was a friend of ours who is basically a retired builder. Instead of the more common "odd jobs" offer for semi-retired people; this chap offers his expertise to tutor and mentor people in the DYI market. So he will show you how to fix the roof but not do the labour. He gets a fair fee and the client learns and improves his /her skills.
Some other issues around the work place are industry changes were many jobs are being replaced by part-time jobs. There's lots of pressure following 'down-sizing' and restructures for the (remaining) incumbents to more with less. Something like a four day week could leave more people fresher to do more in reduced resource situations.
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March 1, 2013 at 1:07pm
Hi Ricardo
I read a case study on your company in the 90s in which it was lauded as the pioneer of corporate democracy and effective example of employee empowerment. I am working in South Africa as an open innovation program manager and my company, RIIS, ww.riis.co.za, host "The South African Innovation Summit every year", www.innovationsummit.co.za , we are really keen to have you as one of one conference speakers for our August summit. We will be grateful if your office or yourself would get back to us. my e-mail jonathan@riis.co.za
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June 17, 2013 at 3:43am
A very, very good idea Ricardo. Perhaps a radical thought but a simple way to create a "competitive advantage". I would guess that this will create a very sticky employer-employee relationship. It would help you to attract and keep top talent that would outweigh the theoretical loss of trading 20% of the work week for 10% salary. Any thoughts on that?
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