Pay Cut - other benefits
Pay Cut - other benefits
(OP)
We are being asked if we would consider pay cuts as part of the effort to avoid redundancies - obviously they can't force us to as our wages are part of our contract, and its not even us necessarily at threat in the redundancys.
I don't mind taking a pay cut in terms of hours worked but its been made clear hours will remain the same (i.e. its a rate cut)
Have other people taken cuts in their workplace to avoid redundancies?
What other benefits are there that I could wrangle into any negotiations to soften the blow? At the minute I can only think of Flexitime and working from home a set number of days a month or something...i dunno just mulling it all over and thought id see if other people had found themselves in a similiar quandry!
I don't mind taking a pay cut in terms of hours worked but its been made clear hours will remain the same (i.e. its a rate cut)
Have other people taken cuts in their workplace to avoid redundancies?
What other benefits are there that I could wrangle into any negotiations to soften the blow? At the minute I can only think of Flexitime and working from home a set number of days a month or something...i dunno just mulling it all over and thought id see if other people had found themselves in a similiar quandry!





RE: Pay Cut - other benefits
See thread731-233836: How big a pay cut would you take? "How big a pay cut would you take?" which is in this forum. I think you will find, indirectly or not, some of your answers there.
It would be nice, it would be appropriate even, that when the company wants something from you that it should be able to offer something in return.
But what?
Flexi time? yes sure.
Work from home and we pay something toward your energy bills? sure.
Private health care? Sure
These things are damned hard to get from management even in the best of times. These are not the best of times.
OK, promised shares in a future bounty? that might get you somewhere. Benefit now, pay later.
Management like to make promises about what will happen in the future, they only worry about their end of the month figures. So sure, you could have a bonus structure set up such that when the company comes out of recession those that are still their will get a bonus. Who knows, if it were a fairy story, this future bonus might actually get paid.... to whoever is left to claim share. (Think Walmart, think Pensions)
Shares in the company? That might be a bit harder to achieve.
But it doesn't matter, whatever you want, it ain't gonna happen.
They are in a position of strength and they have all the excuse in the world for playing hard ball.
"You lucky you still have a job." is their mantra.
The time to negotiate these things is when the company is doing extraordinarily well and even then it is difficult; when they are making money hand over fist and any disruption would threaten the cash flow, that's when you can strike your bargains but when they want to reduce head counts?
The time to get the deal sorted was before the recession. It is a thing called contingency planning, that is when you have to think the unthinkable and plan for it.
The days of the Quaker Mill Owners, the Cadbury's, Lord Lever etc, they are long gone. Today's management have employee welfare in their hearts like Ghengis Khan was just bringing UN relief aid to the poor countries he visited.
So, they are looking to reduce the head count and you are putting yours above the parapet and basically saying "choose me". Like I say, are you sure you want to do this?
JMW
www.ViscoAnalyser.com
RE: Pay Cut - other benefits
RE: Pay Cut - other benefits
As far as a pay cut, I politely explain to the company that pay cuts may not be a wise move for them. They won't be able to permenantly reduce wages without either getting a lower quality of engineer or having positions unfilled. So the new people they eventually hire will get paid more than you, which isn't fair to you who helped get them through the hard times.
RE: Pay Cut - other benefits
Tell them that you're not a commodity and if they are going to treat you that way that you are going to look elsewhere immediately.
RE: Pay Cut - other benefits
I guess it's better than getting laid off, but it isn't very good for employee moral.
I have a hunch that they'll lose at least a few employees because of this.
RE: Pay Cut - other benefits
RE: Pay Cut - other benefits
Are you saying that employees should suck it up and take any pay cuts requested by the company? I have to respectfully disagree for a couple of reasons.
1.) Right now, when the economy is bad, is a perfect excuse to tell you they need to cut salaries whether it is true or not.
2.) They are not jumping through hoops to give you larger than normal raises when they are making money hand over fist.
I like my job with the company I'm at A LOT. I could have taken a few jobs that would have bumped my salary by a good 20%, but I love the projects we work on and the office environment. That being said, if I started being treated as a commodity then I would absolutely look elsewhere. While most of the job market might be poor, I don't believe that is true for the structural engineering field and I feel pretty confident that I could get another job (paying at least what I'm making now) pretty quickly (less than 3 weeks). I've had 4 calls from headhunters in the last month to 5 weeks, and I don't even have my name/information out there at all.
RE: Pay Cut - other benefits
If your company is not selling as much as before (which is likely because of the economic times) they may have more employees than required to get the work done. If this is true, layoffs make sense and are required even though they are painful.
However, if your company's cost of doing business is simply too high to be profitable but there still is plenty of work for everyone to do, they need to reduce cost rather than doing layoffs. Layoffs won't help the company lower the cost of doing business but pay cuts will.
The question I would ask myself - is cutting pay going to make this company more profitable? In the short term yes and it will help survival until the employment situation corrects itself. The long term is more of a concern because good employees will leave for more pay elsewhere (once jobs are available) and it will be hard to fill positions.
I'd be more apt to take a reduced workweek over a pay cut. Working 32 hours a week (or whatever) is obviously temporarily since no company hires part time engineers. But a 20% paycut may just become permenant if the company reduces pay and no one leaves.
RE: Pay Cut - other benefits
RE: Pay Cut - other benefits
RE: Pay Cut - other benefits
Asking for something fairly simple like flex time or 4 day week or something wouldn't necessarily lift your head much above the parapet and depending on your situation may be quite useful. However, not being as visible in the office can have down sides.
I'm looking at a pay cut and I already get some kind of flex time so I'm pretty much at the point of looking elsewhere.
KENAT,
Have you reminded yourself of FAQ731-376: Eng-Tips.com Forum Policies recently, or taken a look at posting policies: http://eng-tips.com/market.cfm?
RE: Pay Cut - other benefits
Spend the extra day off with the people most important to you, or get your head down and either learn some new skills or get applying for jobs.
----------------------------------
If we learn from our mistakes I'm getting a great education!
RE: Pay Cut - other benefits
Never, but never question engineer's judgement
RE: Pay Cut - other benefits
For those that get laid off, maybe they have to do something else for a while to make ends meet. Maybe their old job is waiting for them when economic times improve. Other industries/professions/trades go through this on a constant boom/bust cycle. This is nothing new.
RE: Pay Cut - other benefits
I don't know that I agree that one should blindly go along with "the best solution that will help the firm". Why not take a 20% cut when times are good? That would help the firm be more competitive in pricing, right? I just think that engineers, as a profession, are underpaid - why contribute even more to that? No one is standing in line to give you above average raises when times are good because then they have to "remain competitive". We keep hearing about how health care costs are going up and up and something has to be done about it, but I would bet $10 to anyone's $1 that it won't be addressed by doctors taking a pay cut.
scottyuk makes a good point. Presumably, the lack of work is the problem. Why not take the reduced salary for reduced work hours and not just a blanket cut in your salary?
RE: Pay Cut - other benefits
Development of a new product takes a year or more (historically always more except for minor enhancements) so we are always working in advance of getting any money for our efforts. For long term survival we can't realistically stop developing new product so we need to keep staff in our design area.
Now certainly on the shop floor/production side the argument to cut hours (or staff) to suit the run rate has some merit.
However, we are still making sales on our less profitable lines so need the staff to build them, the thing that's really killing us is our complex/high cost product line where the profit margin is larger just aren't selling. Almost everyone specifically associated with that line has been let go apart from a few key personel.
So I'll be taking the pay cut and looking for something else, unless it's big enough that being laid off is more attractive and that's an option.
KENAT,
Have you reminded yourself of FAQ731-376: Eng-Tips.com Forum Policies recently, or taken a look at posting policies: http://eng-tips.com/market.cfm?
RE: Pay Cut - other benefits
So, if the recession is short lived the management may justify long term projects and ride out the bad times by cutting back in the traditional areas of sales and marketing. If it looks to go on longer then they'll focus on existing saleable product as the means of keeping the cash flow.
They will tell themselves that that can always return to R&D later when times are better and they will tell themselves that there will be plenty of engineers looking for jobs to fill those places. Maybe, even some of the engineers they let go will come back.
So the initial response may be to cut back on advertising, exhibitions, training, stationary, new computers etc. Then they'll turn to the headcount. Initially it may be that it will be marketing people and some sales that will go. Maybe some of the production people (especially if sales drop off) and they may try and maintain R&D but they may cut some of the R&D budget.
Pretty soon they'll find that this isn't enough. That's when they'll start in on anything that doesn't turn a dollar each month.
Of course, you may work for one of the smart companies that have the resources to ride out even a longish recession and who know that the conventional approach is wrong; it isn't about the end of the month figures, it is about who will be the fitest when the recession ends.
JMW
www.ViscoAnalyser.com
RE: Pay Cut - other benefits
My opinion is that our management tend to be a bit short sighted, but they also have a plan (or rather hint of an idea) for restructuring/simplifying/renewing our product line - for which they need engineers.
A pay cut or freeze was suggested about a year ago, but instead they let people go as they figured a pay freeze would cause people to quit anyway (probably best first) where as with lay-offs they had more control in who left. I think now with the combination of not easily being able to cut more staff without losing key skills/experience and the job market being such that people are less likely to leave voluntarily they are considering the pay cut.
KENAT,
Have you reminded yourself of FAQ731-376: Eng-Tips.com Forum Policies recently, or taken a look at posting policies: http://eng-tips.com/market.cfm?
RE: Pay Cut - other benefits
So I'm still looking but not quite as desperately.
KENAT,
Have you reminded yourself of FAQ731-376: Eng-Tips.com Forum Policies recently, or taken a look at posting policies: http://eng-tips.com/market.cfm?
RE: Pay Cut - other benefits
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RE: Pay Cut - other benefits
But if you've noticed that, CVG, then the bean counters will have noticed too.
Guess where that takes us.
JMW
www.ViscoAnalyser.com
RE: Pay Cut - other benefits
Loyalty works both ways... and such compromise should be negotiated. I think it's fair to ask your employer the 'what's in it for me' question. At the very least, you will be the guy that 'stuck in there' with them. I would think that you will be granted some form of tenure and advancement after the economy picks up sometime next year. There is opportunity in this, really.
Good luck with whatever decision you make.
H.
"Officer, just charge me with the usual."
~Bob Probert
RE: Pay Cut - other benefits
Picking myself up off the floor where I fell out of my chair laughing my a$$ off. Good one Hoagie.
KENAT,
Have you reminded yourself of FAQ731-376: Eng-Tips.com Forum Policies recently, or taken a look at posting policies: http://eng-tips.com/market.cfm?