Up to half of companies within the STW Communications Group’s stable could introduce a nine day fortnight for staff in a cost cutting measure initiated by CEO Mike Connaghan.
In an email to MDs and CEOs within the group a few weeks ago Connaghan revealed his cost management initiative which would involve staff working nine days a fortnight, instead of 10. He would not be drawn on which companies he approached or which were implementing the initiative, but confirmed, “It is happening, but only in some agencies.”
He added that this is not something being forced onto companies, but rather a suggested cost cutting measure.
“It’s not an across the board initiative but it’s certainly a more creative way of trying to manage through tough times,” he said. “While some businesses may roll out the initiative among their senior management, others will implement it across the company, and some not at all. It’s horses for courses.”
STW Group, which includes agencies Singleton, Ogilvy and Mather and Ikon Communications, recently reported a loss of 6% in underlying net profit after tax in its half yearly results. Further charges of $5.5 million relating to property moves and other payments resulted in a 60% drop in the group’s reported NPAT.
Connaghan hinted that introducing nine day fortnights could help to prevent job losses across the group but did not deny the possibility of redundancies this year.
“We’ve got 74 businesses and every business has a different situation. Some will be looking at initiatives like the nine day fortnight, some will be looking at redundancies and some are hiring at the moment,” he said, adding: “It’s impossible to generalise.”
He said cost cutting measures like these were necessary in order to boost market share in deteriorating economic conditions.
“We are in a fight for market share. It may be a smaller market but it just means that we have to be smarter and better than our competitors and win more of that market share.”
Other media companies are also battling the downturn by reducing working days. Last week Network Ten announced plans to make its staff take at least two days extra leave over the Easter period and to consider reducing their working weeks in order to trim costs. News Magazines, a division of News Limited, has also revealed plans to give staff the option of working four day weeks or taking unpaid annual leave.
