Compensation Question

[CarolinaPE]

I have a somewhat uncomfortable situation at work. Started with a small firm nearly two years ago and have yet to see the first cost of living adjustment or raise. Our firm is small and informal but seems to have as much or more work than we can handle. In fact they have tried to hire engineers pretty recently (and still may be in that process). After a year and a few months after I first started I had to ask for a formal review, which (after waiting another month or two) I finally had, it went really well and we both seemed pleased with the relationship. Now my 2 year anniversary is right around the corner. Being that I had nearly ten years experience in other areas of ME I caught on quickly and am doing a very comparable job of fellow engineers with 5+ years experience in this particular industry of ME. We have no HR (small firm) and the owners are engineers, not HR folks. It seems reasonable that 2 years is giving them plenty of time to see an adjustment. What do you think? A good friend of mine said that otherwise, due to inflation, no raise or cost of living adjustment was like an annual paycut (obviously). Being that I have had to ask repeatedly for a review and now apparently a raise/cost of living adjustment is this a sign of what lies ahead???

 

[wes616]

I'd say more than a cost of living. They say you get hired (mid career, industry switch) at 25% less than what they hope you are worth after a year. It's about time they kicked you a bone. look for between 15% and 25%. Have gotten as much as 37% at 18 months (but that was when I was brand new).

Wes C.
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In this house, we OBEY the laws of thermodynamics! - Homer Simpson

 

[kchida]

If it bugs you enough to post here and/or ask your peers about it, it sounds like you need to do something about it. Just be honest and upfront with them, while maintaining a professional and subtle attitude. The worst they can do is say no. If they decide to fire you because you're too persisent, than so be it. JTHOOANE (read 'just the humble opinion of a newbie engineer') Take my advice with a grain of salt, but this is just an opinion from an unadultered loose-cannon newbie engineer that hasn't been broken down....yet. (i'm sure we've all been there once.)

 

[wes616]

Kchida - you need to get fired (at least twice) :-D

Wes C.
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In this house, we OBEY the laws of thermodynamics! - Homer Simpson

 

[EngJW]

Maybe no one else there is getting a raise either. Maybe the company does not have the money, or the owners don't care about anyone but themselves. Apparently there are no HR procedures if you had to ask for a review (how many small companies actually bother with reviews?). If you are young enough the best thing would be to get out and keep changing jobs until you are over 50. After that, it is not unusual to go years without a raise.

 

[Heckler]

Newfella,

That sounds like a company I worked for about two years ago. I got a review around my 18 month but didn't get a raise. The review was a joke...whereas my boss (CTO/cofounder) was so critical it didn't go well at all. But the other engineers at the company thought I walked on water but they hadn't received a review either. So because I insisted on a review my boss took the opportunity to bash my ego/technical skills. Needless to say I started looking for work.....got a job three months later with a $15/yr pay raise.

Here is a quote I copied from a posting. It applied in my case but rings true in over situations.

Quote (TygerDawg):
My sister with her Ph.D. in Psychology has always advised me that the person at the top of the organization will imprint his/her personality on the organization. If they're nice honest demanding people, then the org will be on a fairly even keel. If they're a whacko psycho backstabbing evil SOB, then the whole place will be neurotic and dysfunctional.

 

[Maui]

Heckler, could you post the thread number for the thread that TygerDawg's quote was drawn from? I've been searching for it. Thanks in advance.


Maui

 

[MadMango]

$15 a year pay raise?

[green]"I think there is a world market for maybe five computers."[/green]
Thomas Watson, chairman of IBM, 1943.
Have you read faq731-376 to make the best use of Eng-Tips Forums?

 

[Heckler]

Maui,

thread731-136661


MadMango,

I forgot the K----$15K/yr raise making up for the 2 years I got zero. The new company saw my value and what I could bring to the table.

 

[TheTick]

Ask not, and ye shall not receive.

 

[whyun]

Starting out, my raises were in few bucks an hour increments which was "considerable" in terms of percentage increase.

During the middle of my career, increases came as percentage of annual, ranging from 3% to 5% per year. Like EngJW, in bad years, no raises.

I haven't quite hit the maximum pay range yet but once I'm there, I don't expect any raises for a few years at a time. I'm ok with that.

Remember that when you talk your boss into giving you a raise, your next raise will be delayed. If you feel that you are underpaid, AND others next to you agree, you are underpaid. Time to move on.

Small firms... Looking back, my time at small firms were so much more interesting than working for big firms... friendly atmosphere, family-like, friday beers... trade-off is pay rate.

I've seen structural drafters at big A/E firms make more than licensed engineers at structural only firms. Mechanical (especially HVAC/Plumbing) is likely very similar.

 

[RDK]

Have you actually asked for a raise or cost of living adjustment or are you just expecting that the owners will give you more money?

Not asking is the same as giving yourself the answer “no”.


Approach this like any other problem. First do your homework. Find pout the average salary for other engineers in your field and location. Most if not all of the Canadian associations conduct a salary survey and publish the salary statistics by industry, field of work, education, experience etc. They also discuss benefits and other non monetary forms of compensation. They are very well documented salary surveys and quite useful. (see

http://www.apegm.mb.ca

for the Manitoba one and follow the links under information for members. You can also find links to other Canadian associations to find their surveys on the Manitoba site.)

Then look at the cost of living statistics, i.e. consumer price index. Here in Canada Statistics Canada publishes this information.

If your two year old salary times the inflation factor is about equal to the average rate for other engineers in your field and location then you have a good case.

Next make your case. Look at it like a normal presentation where you are making your case for a decision. Have the facts and don’t get sidetracked or emotional.

Support your position with some concrete examples where you have brought additional business or recognition to the firm. Have some examples where you saved the firm some money. Show that you have contributed and are worth the additional money. The owners are looking for value for their money and generally if you show that they are getting it they will agree to a raise.

Finally don’t threaten to quit if you don’t get the raise. A statement “If I don’t get xx dollars I’ll quit” can be considered a resignation. All your manager has to do is say “I accept your resignation” and you can be out of a job that minute with no recourse or severance.


Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[CarolinaPE]

Thanks for all the input. When taking this job I was aware small firms may not pay quite as much and the benefit packages were generally not as good. I'm ok with not quite as good since we moved closer to family. What will be a problem is if it gets to be "not even close". I am pretty aware though what other firms (even local ones) are paying with another 2 years or so of experience and it is significantly more (40-50% range). I think the money is there though as we are not slow in the slightest. It could be they are trying to grow and hire more engineers and now is not a good time. SOME communication on that level would go a long way. I already left money on the table when I made a career switch (within ME) and went from a senior level back to junior level. Cannot afford to be senior level again working at a jr level salary, this has been a sacrifice but with purpose. I do like working with these guys and like I said I do plan on having a talk. Nothing threatening to leave or any of that business, more of a "hey cost of everything goes up every year (inflation), I also have to have more value now with some experience also". We will see how it shakes out. It just bugs me a little that I have to bring this stuff up.

 

[CarolinaPE]

PS- a little more background info. This is the smallest firm I have worked for by a longshot. I would est the avg # of employees at a place I have worked for averaged in the hundreds. So they were complete with an HR dept, scheduled annual reviews, annual compensation adjustments (or none but at least they told you) and annual bonuses (or not but they said that too). Thanks again for your input.

 

[jmw]

People are one of the few assets a business has that appreciate in value.

I think the phrase "intellectual capital" describes it best (

http://www.intellectualcapital.nl/)

or "intangible assets".

The problem is that this is a recent (formal) concept (started in 1980), though one might guess that informally "good" managers recognised this intuitiively, and for many managers this is an alien concept. They measure poeple by what it costs to hire and fire and balance the cost of replacement against the cost of retention without regard to such factors as the time taken for a replacement to become as effective as the person he replaces.

To a degree this is a refelection of the treatment of the "replacable" manual skills being applied to to skilled and professional employees.

What it means is that in an ideal world your value to the company should be known and measured as automatically as the accountants measure the value of an item of equipment and you shouldn't have to divert some of your own time and effort to researching your value measured in the market place whereas the management should have a knowledge of your value to the operation based on a range of factors.

It also means that review discussions can take unexpected turns. Engineers are said to be unemotional and logical while it is a fair bet that managers are the converse. In fact it sometimes seems as if managers are potentially the most emotional and least rational people on the planet (with obvious exceptions which PC forbids I mention).

Do not expect fair treatment, logical appraisal or rational outcomes. Be prepared for distaster and always have your CV/Resume up to date and out there. ALways be ready to consider pastures new but avoid "blackmail".

Do not expect loyalty to be anything other than a one-way street.

If your company has pressures on it that means it cannot afford to pay you what you are worth (even if you can get them to admit what you are worth) look elsewhere. All the excerise of belt tightening (i.e. employees accepting that "times are tough" and that pay rises will not occur)will prove is that what you are worth and what you will accept are two different things.

One company i was at spent many years telling the employees of its most profitable business unit that times were tough in aerospace and that we were supporting aerospace. This went on for years with no annual pay rises, rationalisation, no investment, and a general devaluaing of the workforce. Management paid most attention to the profit and loss statement which meant controlling the salary bill.

Then a few years ago they sold the aerospace business for $60,000,000. This money was shared out among the shareholders. Not a single employee saw eny return on their own investment of time and loyalty. Do't make any mistake, if you forgo any rightful reward you are investing in the company and you ought to either accept that, look for some tangible alternative e.g. shares or get out. At any one time even in the depths of recession there are companies that grow and reward and others that don't. Never back a loosing side.

JMW

http://www.ViscoAnalyser.com