Are understaffed departments and unrealistic project deadlines the norm? 57

[LukeBizzy]

Hello,

I work for a mid size OEM. I feel like my work environment is extremely stressful. If anything it just gets worse as the years go on. Our company has been busy for years. New large scale projects pop up all the time and we make no realistic effort to schedule them. They just get thrown on the pile and often share the same deadlines as the projects we already have. Our manpower is much less than the workload, so we all just run back and forth between projects, putting out the fires of the day. The only way we survive is by cutting corners and releasing minimally checked and subpar designs. I would say that our overall quality of work is not that great, but luckily we haven't had any catastrophes. Our sales numbers increase each year, but our staff levels remain the same or even shrink (i.e. people leave and never get replaced).

I make due working in this environment, but it's takes its toll. I've read many threads on eng-tips and I feel like this topic pops up every once in a while. It seems like a lot of other people are in the same boat. I especially saw a lot of structural engineers complaining about this sort of thing; which shocked me. I naively assumed that companies would not skimp on designs with so much at stake.

Do you guys feel like this is the norm these days? Is this something you'd expect to see in certain industries and not in others? Do you feel like company size plays a role?

I'm looking forward to an interesting discussion.

Thank you.

 

[CELinOttawa]

Glass: Did you notice that we don't wait for our money? Or waste any effort chasing unpaid bills?

There is a value to not needing to wait for the cash, and there is an added value to knowing that the client is good to pay before we continue delivering good work while what will be a non-paying client simply stalls. What is your time worth to you?

I've dealt with a great deal of stale accounts over the years. In forming this company, finding a way to minimize (or, ideally, eliminate) stale bills and partial payments was a main drive for us. I believe we've succeeded.

 

[glass99]

CEL: Of course not having to chase invoices is valuable from many points of view ranging from cash flow to client relationships, but losing 20% of my revenue is a bit expensive. There are some client relationships I would willingly burn for the sake of 20% of the value of a single project. I am used to early payment bonuses being in the 2% range.

 

[structuralsteelhead]

Albeit not as eloquently put as some previous posts; I'll chime in as well:

Went on my own in 2009, engaged in civil/structural engineering consulting and have been a professional engineer since 1989. Prior to 2009 I worked 40-60 plus hours a week for various structural engineering firms over the years. Post 2009, on my own, and even now in the down turn, the pace has never lessoned for me. My wife and children hate my career with the never ending deadlines and fire extinguishing services provided by me to my clients day in and day out. And I've no one to blame but myself. This may not be true for all, but it is challenging for some of us engineers, myself included, to be good businessmen. We are "yes, I can do it" folks and find it hard to say "no" and insist on more realistic fees with respect to the time frames to do the work as you'd like and know it should be done. We don't stand firm on our contracts and change order/add requests, we undercut our competitors to get work as if the next job is going to be our last. It shouldn't be this way.

Not a clock in/clock out field,...typically no overtime pay for projects in the private sector, you'll already the lowest bidder by default having a project in front of you. Small raises year to year, having to move to get a decent raise, which if you do too much you ruin your career. Not a 40 hour a week career, and the typical private sector job will suck the life out of you and leave you with no pension or medical. We are glutens for punishment. Was hoping to make a way to a better career and life for myself on my own. However it hasn't come overnight. My wife, who used to work part time, now works full to obtain our outstanding medical benefits. While the good news is, my business is growing steadily, the bad news is, a one man show consulting firm is a hard way to go,...design, drafting, proposal and spec writing, site visits, construction administration, structural observation, RFI responses, invoicing, printing, mailing,.........you can imagine. So, still found myself working 50-60 weeks like I used to do for somebody else, but now doing it from home to be closer to my sons before they go to college. Result-Unfortunately the general family consensus is they liked me better when I was stressed out "workin' for the man" as opposed to stressed out "being the man", with my own show, working from home, harder than ever. It doesn't have to be this way.

Made recent changes this year to control my health, the pace of workflow, and mine and my family's happiness: I have to force myself to get in a good physical workout a few times a week in order to not drop dead of a heart attack at now 50, so I can keep up this pace until retirement,..........at 70. (probably not joking here) Trying a new policy with my hard to please/timeline desperate "Need it by tomorrow, or I can't use you" clients, I call their bluff, I tell them all I'm two weeks out, even if I'm two minutes out. I give them a real estimate, no breaks in price because they give me $7,000.00 worth of business a year, I could sell girl scout cookies for that amount. I ask them to send me everything they have on the project I need to get started and with any luck I'll try to get started on it sooner. Every time, without fail, it will take the contractor two weeks to get me everything I need to start to do the job anyway. So, I get my price, I get my timeline, and I charge for every change, I don't even ask for approval, I just bill for the change and defend it,...and it works, and reduces the number of change order I see coming from the same contractor/client in the future.

I actually like what I do most days and that's why I keep going,....that has to factor into the equation of why we stay in this and don't drop out, go to nursing school for 2 1/2 years to get our RN certificate and make 6 figures a year, with overtime, starting the minute after you were scheduled to clock out. No deadlines to stress and dream about, clock in, see new patients everyday, clock out,...and then instead of thinking about the five jobs your juggling you can think about other life stuff, you can hear your family when they are speaking to you without just nodding and saying 'yes' like you've just had a frontal lobotomy, remember anniversaries, birthdays, wouldn't that be awesome..... (actually my wife is a nurse and would not appreciate this last passage, she works very hard and her job is stressful,....but she will admit, everyday a new day, and she does not lose sleep or dream about work)

So get control of your clients or employers, if you own your own business, don't discount your rates/undercutting your competition and lowering all of our salaries in the process. Don't discount rates, even for early payments, I'd rather get paid 60 days late than losing $2000.00 on a $10,000.00 job just because my client paid me a week early for a change. Thinking about adding late fee charges actually. If you are an employee, make a move if you have to. I here becoming a State employee is where it's at! Resist the urge to stay two hours late everyday for the sake of 'the man' who isn't paying you for that overtime, or dropping huge bonuses on your front porch during the holidays, or has any intention on handing his company to you when he decides to close shop. Forget about all the looks you get from your co-workers as you turn off your computer, grab your coffee mug and head for the door at 5pm! You know they're watching you, you can feel their eyes on the back of your head, but just keep walkin',... don't look back, you've got life to live from 5:01 pm til bedtime! And it won't pay you back for missing it!

 

[KENAT]

Sorry, are we engineers or marketing?

Late fee V discount for early payment is the same damn thing if you do it remotely right.

Perception of one V the other may be good marketing but fundamentally if you set your pricing correctly it ends up being the same $.

Posting guidelines faq731-376

http://eng-tips.com/market.cfm?

(probably not aimed specifically at you)
What is Engineering anyway: faq1088-1484​

 

[ajack1]

CELinOttawa I am intrigued how and why you came up with the 20% discount idea?

As you say that everyone pays within 30 days why offer such a big discount to just get paid somewhere between a day and two weeks early? I fully understand the wasted time in chasing bad debt bit but even if you offered nothing and one in six didn’t pay you would still be better off. 20% is also a huge profit margin in automotive, obviously less so in structural.

Well done if it works for you and structural offers large enough margins to allow you to do this. I wonder how this would work or not across other sectors of the industry?

 

[glass99]

structuralsteelhead: Yes, for God's sake, don't take sh*t from clients.

 

[FeX32]

Interesting how its 50/50 time stamped work mentality vs. paid for professional work.

 

[moltenmetal]

FeX32: I hope you're not implying that I have a time-stamped attitude? A time-stamped attitude in my mind, clocks out after exactly 40 hours- sometimes mid sentence at the end of the day- and I've never done that in my life. I know people who do that and it irritates me too- it shows a lack of dedication and is disrespectful of the time of other co-workers. There's a world of difference between that, and what I'm advocating.

Again I think too many people are confused about what a salaried position implies. A salary in no way implies "any amount of work required to "get the job done", for this amount of money and no more". Setting limits on what you're willing to do without at least the possibility of extra compensation doesn't make you unprofessional- it makes you realistic, and shows that you believe that your work has value.

 

[1gibson]

Your results might vary, but honesty is the best policy. I had a discussion with a previous boss in a similar environment (OEM, 20+ projects at once, which means 20 different kinds of messes) that went like this:

I don't need the money, but you need to pay me more, so the owners value my time more, so they listen and act when I make suggestions to fix the lack of planning and consistently crap inputs from upstream, that prevent me from working efficiently.


I guess it wasn't much of a discussion after all. I did get a raise, but it had no effect on the problem! So I cut out most uncompensated overtime, and suddenly things improved. Simple supply/demand, and basic marketing. If you are giving away your time and there is no limit on the capacity, the perceived value goes down. There is nothing you can do to increase the perceived value of your time other than stop working for free. I'd say I took a pretty direct shot at the other part of the value equation, with no results.

The only thing I struggled with was changing the way I made commitments for completion dates. But somehow, coworkers that obviously cared about the quality of their work product and gave me stuff I could use, got taken care of first and as promised, even if I had to stay late. The rest got taken care of strictly during business hours, and were assigned a priority level that matched the quality of the input. Be careful, and DO NOT make those decisions based on personal relationships.

"Oh I said that would get done yesterday? Well there were more problems with it than I anticipated, still working through them. I have other work that I can actually complete so I'm doing that now. Want to change my priorities? Feel free to pass it up the food chain and/or help expedite a response to the questions I sent out."

I did not struggle with quality of work. If I'm doing it, it is done right, and everybody knows it. If it takes too long, then next time improve the input or adjust your expectations. Or give it to someone who will half-ass it on time, and I'll go back and fix it later when the shop can't put it together.

 

[moltenmetal]

1gibson: exactly. Value your services, and don't make a liar of yourself by giving them away in substantial quantity for free. All of a sudden, others will value your services more too. Also important: as a result, they'll value MY services more too, and those of every other engineer.

Ensuring that your salary is sufficient to demonstrate a respect for the profession and for your contribution to the value proposition of the company is important- very important. But asking for more pay might not have gotten you what you wanted because you asked for more salary, rather than asking for a slice of the profit your work generated for them. Want to really get their attention? Ask for THAT.

Motivated people work hard because it's part of their nature. You also don't want to let colleagues down and sometimes you take one for the team- I get all that. When the extra work for free becomes consistent, it's a problem, even if your co-workers and management are the nicest people going- even if YOU are the one motivated to do it and nobody else is pushing you. If they're really nice, they'll give you a slice- otherwise, you're being taken advantage of, or doing the rest of your life a disservice.

 

[KENAT]

Warning crabby mood alert...

Value our services, maybe. Or maybe they'll move the work to a "low cost region design firm" because that's on the VP's list of goals for the year. Doesn't matter that their costs end up being 80% of having a staff member do it and that 20% is more than used up by getting them up to speed, reviewing their work, fixing their work, integrating their CAD work with yours ... If you're lucky you get to stay on as a project mis manager and ride the death spiral all the way to bankruptcy.

Posting guidelines faq731-376

http://eng-tips.com/market.cfm?

(probably not aimed specifically at you)
What is Engineering anyway: faq1088-1484​

 

[GMcD]

Most Canadian Provincial Engineering Associations have a line similar to this in their Code of Ethics: "Uphold the principle of appropriate and adequate compensation for the performance of engineering and geoscience work" - if the employer is calling themselves an Engineering Company and professional engineers are in the management team - they have to comply with this basic tenet of the Code of Ethics. I agree with what Moltenmetal says: if you don't value your own time and performance, you will be taken advantage of, whether it's you as the person, or the company you work for.

Kenat- I get what you are saying- I have been at firms that outsourced the CAD work to overseas to take advantage of the overnight delivery time zone effect, but once the actual total costs vs savings was measured, it was a break-even on a good day - while the company saved some CAD production costs, they incurred more higher cost time for project managers and designers to have to make corrections and changes to the CAD plans. It got to the point of the mark-ups taking almost as much time as the in house designer would take to just do the CAD themselves.

One thing about the MEP Consulting business is that it is still very local - buildings get designed and built locally, so there is very little incentive or financial sense to try to have a building meant for City A to be designed by a firm in City B a few time zones away - the local codes and standards vary widely in our business - heck the local bylaws and Code sections enforcement is different just in the 8 local municipalities here in my world, all within an hours' drive of each other. Our particular problem is that the industry as whole allowed itself to be turned into a commodity - more consultants than projects, hence the competition to arrive at the bottom first.

 

[glass99]

Optimistic thought of the day: All of the jobs which can be outsourced overseas, have been. Its not 1995 any more.

 

[Compositepro]

I think this discussion illistrates my point that we all need to learn to be less emotionally sensitive about work. I don't see any real disagreements in what people are saying. There is a strong tendency to assume the "other guy" is taking the most extreme position that can be interpreted from the words. That, in itself, is a major cause of problems when dealing with people. Sometimes it is best to just let people vent.

 

[CELinOttawa]

Well ajack, here's the simple truth of our pricing was that it was pretty arbitrary. We only really calculated our costs and then worked it against a "worst case" low level of productivity. I'll explain in detail:

- Cost to run the office = $4k liability + $6.5k office + $2k codes + $5k equipment & supplies = $17.5k break even amount.
- Man hours for first year = 2x 840 (two half-time principles) + 1 x 420(one quarter time principle) =
- First year productivity set to 15%. We want this to break even, after this everything above 15% productivity becomes "cream".

Thus: $17.5k/(0.15(2x840+420)) = $55.55/hour

Quite low, thus we can comfortably set our rates at market rate. Now that the rates are substantially higher than the mininum we're willing to work for, we can offer clients early payment discounts in order to keep the chasing to a minimum.

Oh, and as for clients all paying within 30 days, I feel this is because of another part of our payment policy: any client who pays late - even once - is never extended the opportunity for a twenty percent discount again. And yes, we have lost clients that way. No, no I don't care.

Perhaps others are unwilling to discount their rates, but in this world of sales and midnight madness BS you need an angle that gets the clients excited to use you, and to pay you for your services. Eighty percent of every engagement without worrying one blink is a faster "on with the show" and the next eighty percent... That's worth parting with 20% we would have burnt through if we were honest about our time wasted chasing. The difference is I am not willing to consider the overhead BS that normally comes with running a practice "sunk costs". Those are my minutes, my dollars, my time to sell or use myself. They are all on the books, not one little exception.

 

[ajack1]

Very interesting CELinOttawa, it is always interesting to see what solutions different people/ companies come up with to the same problem.

20% still seems a big discount to me, however if it works as both a marketing tool and an early payment incentive and keep you busy and making good money then good for you. Personally I take a very different view in that I am not that bothered in the length of payment terms only that they are paid on time and without costing me time. I therefore ask the customer what payment terms they would like and add a very small factor for longer terms. The reason for this is most people/ companies are happy doing what they have asked for and as long as the company is not surviving hand to mouth an extra 30-60 days really makes no difference. One downside is it does leave you exposed to a larger amount of money if a company do not pay or go into administration.

I would add that this probably only works for a small company and one where you work within a close knit community where companies are aware of each other and work with each other on a regular basis. I have never had a company not pay other than those going into administration and whilst we have tightened up our contracted terms and conditions, it is still near impossible to get money back; however it would not come close to “losing” 20% on all orders, maybe 1-2% tops.

As with so many things in life there is not a one size fits all solution. The area I live in has all the formula one racing teams except one with a 40 mile radius, so I know a good few people that work in this sector and not just in engineering roles. All are very well paid and work in a cutting edge environment and most love what they do. On the flip side all are on very short rolling contracts, certainly not owners in the company and it is all about getting the job done, start going home at five if you don’t get some overtime or a share in the company and you will be out of work tomorrow. Despite what some people on here say all the ones I know are very highly regarded professionals.

That really sums it up. What is one person’s dream job would be a nightmare for someone else, it doesn’t make them amateurs but it is not for everyone. The secret is to find what works for you and do what makes you happy, if you fail to do that you are probably better looking at yourself as the problem.

 

[glass99]

CEL: thanks for sharing in detail your cost estimate. I have to say that I think you are missing a few significant overhead items which you will need to figure into things long term. Your OH estimate is light by a factor of 2x at least. Software, general liability insurance, training, phone+internet, computer hardware, employment taxes, accounting/tax prep, licenses, travel and marketing all come to mind. Being in Canada you skip health insurance (lucky you). I would be happy to keep my OH to $60k/yr/person. Though we do about 2200 billable hours per year, so that's only $27/hr.

Also interesting that the 20% thing is a one time offer.

 

[glass99]

Compositepro, yes, you are absolutely correct about understanding other people's points of view, especially your boss or client. It lets you tailor your behavior to work with them better. It also gets you out of the master-servant mindset which can really hold back engineers in particular. Many times we in technical fields are doing jobs which our bosses/clients do not understand, so there is a lot of scope for "interpreting" what we are told to do. For me, there is a strong correlation between the expertise of my client and the fees I am able to charge (low client expertise = high consultant fee).

 

[CELinOttawa]

I can guarentee that the way we run our practice will not work for most, and certainlynis not the "norm", but it works wonderfully for us.

Glass: Those OH numbers are correct. We're in our third year of operation and fourth since we decided to do this. Taxes from pay represent a great deal more of the OH in Canada. They are not my concern as they are deducted from the employees.

 

[glass99]

CEL: You don't have employer taxes? In the US the big one is FICA which is Social Security and Medicare. Its approx 7% of salary each for both the employee and employer. There are a slew of smaller ones too like unemployment insurance. In NYC we also pay 8% of "profit" corporate tax.