How big a pay cut would you take? 6

[ajack1]

Having done the festive rounds meeting up with friends and family I don’t normally see on a regular basis I was very surprised how many were already feeling the recession.

Throughout a variety of jobs in different sectors many were on either on extended holidays, working a short week (some on full pay some not) or facing pay cuts and or redundancy.

I have not heard of short working weeks or pay cuts in the UK for many years now and it got me wondering, how many on here would take a pay cut (and how much) or a short working week in order to save their, or others jobs?

Or how many feel they are totally safe, or could go out and match what they are on in the current market place, or even would not take a pay cut under any circumstances?

 

[ajack1]

Scotty, yes I agree there must always be some “spare time” and whilst I am sure we have all worked extra hours to cover for illness, holidays or to cover a crisis that is not a long term solution.

What I question is if someone can do five days work in four days is that really a full time job?

jmw takes this even further saying that one person can do three peoples jobs, I simply refuse to accept that, if there were genuinely three jobs there in the first place.

I guess it comes down to what people want, as far as I am aware no private company is there to provide employment for as many people as possible, they are there to stay in business and make money for those that have invested in them and provide safe working conditions and a realistic salary for their employees.

If there is not sufficient demand for products you either pay the same number of people less money or less people the same or more money, or cut profit margins.

 

[debodine]

ajack1, scotty and jmw all have interesting points. If I may insert my two cents (worth about 1/2 cent in today's US economy), I would like to suggest one other possible scenario for the "one person is now doing three persons' jobs" situation.

Using the term job to mean one person in one position employed full time, I completely agree that if one person can do EVERYTHING that three people were doing, then there were not three real jobs in the first place.

However, I think that when this scenario appears to occur during a re-organization, in some cases it may be more accurate to state that one person is now doing what are the "essential" tasks demanded by management that used to be accomplished by three people, and the lesser priority tasks of all three jobs are either dropped, shuffled off to others, handled via overtime if non-salaried or pressure from mgt for additional non-paid hours if salaried, or moved to a "WHEN we can get to it, IF we can get to it" category.

Does this sound like a reasonable explanation for some (certainly not all) instances of the "one person doing three jobs" scenario? I have on occasion been the "one" and that was how I managed my tasks, but I may be an aberration.

debodine

 

[SomptingGuy]

One person doing three people's jobs. I see it all the time. I doubt the auto industry is any different from others. Walk around an engineering centre and count the contributors.

Me though? A pay cut would make the offers more interesting.

- Steve

 

[jmw]

Our perception of what can and cannot be done often differs significantly from management's perceptions and expectations.
They'd really love to think they have been employing more people than they should. The truth is they were probably already undermanned.

Yes, in some few cases it is true; in the union shops and of nationalised industries. It has even (but very rarely) been true of the odd private company.

But even before the crunch it would be fair to say many were stretched. Most engineers here would have to say that even doing their own job they work far longer hours than contracted.

Management then start a head count reduction, always the first response and they then hand out responsibilities to the remaining employees.
For a while those employees will try to do all three jobs and then they will try and prioritise what each job should deliver.

Sooner or later there will be a reckoning when the many housekeeping tasks and less essential tasks not done start to assume major proportions and the cracks begin to show.

Management at this time appears the completely surprised to discover things are not getting done as they used to be. They may also decide people aren't "pulling their weight". They will disagree about what tasks are essential (anything they need for their monthly reports is essential and often innovated on the spot.... as times get tough then is when the management reports start to get far more detailed which imposes a bigger burden on everyone).

Let's face it, even in the best of times management will not usually have to good a hands on understanding of who does what and why and how well.

So, you and I know it is often damned difficult to do just your own job and impossible to do justice to the extra jobs added on.
But what we know isn't what counts, it is what management expects that counts and while management may pay lip service to the "times are tough" and "yes, they understand the problems" they really don't.

I expect, because none of them really wants to know the real story and they really haven't the bottle to stand up to their bosses and explain that you can't get a quart out of a pint pot; after all they will also want to keep their jobs and they will do that best by promising the directors that they "can do" even if they know damn well they can't.

At times like this there aren't too many managers prepared to stick their heads above the parapet and detail exactly how bad it will be and how they will have to scale back their expectations.

remember that old problem: If it takes 10 men a week to build a wall, how long will it take one man?
Math answer: 10 weeks
Management answer: 2 weeks, OK maybe four but heads will roll if it slips. (time for the pep talks, they'll fx every problem)
Real answer, it ain't gonna get done. Forget about walls, we're too busy baling out the boat.

Sooner or later, of course, management will start to "retrench" but while staff are the first to go, last to go is that beginning of the year forecast (which was probably fiction even before the recession hit).


JMW

http://www.ViscoAnalyser.com

 

[GregLocock]

JMW - your wall example is similar to the real life example in "the mythical man month", pulling people OFF a development project was found to make it run faster.

I think if I had the authority to reconfigure what I do at work then a 20% improvement in my efficiency would be fairly easy to do, but there'd be no t's dotted and i's crossed. For instance, I'll often run investigations for other people that could be done by a draftsman, but since I live in topsy turvey world at the moment it is quicker and so in some ways more efficient if I do it and let the draftie get on with his main job.



Cheers

Greg Locock

SIGlease see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[IRstuff]

The concern about a company holding on 80% pay after the recession is over is completely overblown. In any recession, there will be companies that either have no cuts, or there will be companies that quickly reverse the cuts once the recession is over. This is a natural consequence of companies needing to attract people to fill the jobs needed for the expanding economy later. No company will survive the upturn by maintaining a recession profile and pay scale, simply because their workforce will bail en masse to the better paying jobs and conditions. This is always been a strict fact in a capitalist economy.

TTFN

FAQ731-376

 

[jmw]

If capitalism were easy then we would not have so many companies going bust, having to be nationalised and apparently unable to survive a recession without draconian measures.

Part of the reason is a lack of benchmarking... seeing what successful companies do and emulating them... all too many companies seem to the worst possible thing through faulty logic or understanding.

For example, when the economy as a whole or a sector of the market goes into recession the almost Pavlovian response is to slash sales and marketing budgets and the sales and marketing headcount.

Expenses are reduced, exhibitions cancelled, advertising cut way back, people are laid off and entertainment budges#ts slashed. Companies also move into short term thinking. What matters most to them is the end of the month position and they consume substantially more of the sales teams time in preparing more detailed reports than ever before. They start to discount to get "orders this month" and they fail to support new products which will take time to mature and generate sales.

There are some obvious reasons why they do this but the most obvious reason for not doing it escapes most management teams; the fact that as recession ends the companies that recover fastest and best are those that not only do not cut sales and marketing budgets but expend more on them.

Of course, the rude fact is they have profited by gaining market share in the depressed market i.e. while total sales are down in the sector, one or two companies can actually show growth at the expense of their competitors who followed the conventional path.

For practically any scenario in any market sector we can see examples of companies that "buck the trend" and companies that follow their instincts but which must have lemming genes in their make up.

So capitalism is actually every bit as bloody in tooth and claw as nature and evolution works not through acquired knowledge but at a much baser level.

Too many companies do not have what it takes and thus one cannot be sanguine about the future of any one company.

If captalism were a designed and constructed entity we might be better of but it isn't, it is an evolved system in which too often governments feel inclined to act when they shouldn't and not to act when they should.

In this crisis for example, every man on the street knew what was wrong with the mortgae lending business but governments and the various fiscal watchdogs failed to act. Then when the crash happens they act to protect and preserve some of the sickest and weakest dogs in the pack.



JMW

http://www.ViscoAnalyser.com

 

[plasgears]

At the time I accepted my first pay cut [accepted an offer below my level] my career took a down turn. On the other hand, this company gave me the longest time of employment of all my jobs.

My recommendation is to avoid the pay cut if possible. The first job offer is not always your salvation. When the offers start coming in there will be others. For me they came in twos and threes.

 

[ilovechickens]

We think we will be lucky and be very busy this year, but if not then no I would not be keen to take a paycut.

Like many other engineers who have posted here, we do not get paid overtime when things are great - if we work 60 hour weeks and the company bills the client 60 hours we still only get paid for 40 hours, hence on principle I would be exceeding reluctant to take a paycut.

I would however be willing to reduce the number of hours I work for an equivalent decrease in pay, on the understanding that when the market picks up things go back to normal.

 

[Zapster]

I’d gladly take a 75% reduction in income and work two jobs if my family was hungry or without a warm house. I think the question is meaningless unless you know how much someone earns to start with. How about: how much of a pay cut would you take if the alternative was to starve or freeze to death?

Or how about how much of a pay cut can you take before you need to change your lifestyle?

 

[ilovechickens]

You're right of course Zapster, principles would go out the door very quickly if my kids were hungry and cold.

Mind you, if I took a 75% reduction in income and still had to work the same hours I would not have the time to do two jobs.

 

[ScottyUK]

If the pay cut is justified by genuine lack of work then there should be no reason to work regular hours. One is intimately tied to the other: I'd take the cut, but would expect it to be pro-rata with reduced hours.


----------------------------------

If we learn from our mistakes I'm getting a great education!

 

[jmw]

And of course, any pay cuts and extra work demanded of you would be matched by management taking similar percentage cuts and doing more work and the shareholders would be very prepared to reduce their expectations.... or am I thinking of some other planet?


JMW

http://www.ViscoAnalyser.com

 

[737eng]

Just took a 5% paycut. What ticks me off the most is that I heard it on the news before I heard it from the company. 2nd thing that ticks me off is that all the press releases and memos state that all salaried employees are taking a 5% pay-cut, which in my opinion makes it sound like we are volunteering and I am definetly not volunteering for a paycut. Why don't they just state that we are being "given" or being "forced to take" a paycut. Other than that it hasn't really sunken in yet, I guess it will hit when I get my first paycheck.

Right now in Engineering there may be other jobs out there that may actually pay me more and I have had offers at other companys, but not in my geographic region. So I have to compare the 5% to moving the family, kids changing schools, selling and buying a house in the current market, ticked off wife because we moved three times in the last 10 years and she has to make new friends every time, etc..... At 5%, I am going to feel it, but we won't be starving or freezing, probably just won't be eating out as much, or buying upgrades for my bicycle, etc... So my real question is 5% worth uplifting and relocating my family, right now it is not, I would probably lose more than the 5% just on the sale of my house due to the current market, again I may get a good deal on another house.

Anyway, thanks for letting me get this out, feels good to get it out.

 

[moltenmetal]

I'll take a pay cut IF I'm also offered a meaningful percentage of the profit in the form of a cash bonus, or a slice of ownership, or some other benefit on the up-side. Shared pain for shared gain is fair- as long as it's calculated fairly. Oh yeah- and the place has to have a HOPE of generating a profit in the forseeable future, otherwise layoffs are inevitable anyway.

I'll also accept a work reduction in return for reduced pay, ie. unpaid time off. That too is fair.

But a straight pay cut with no upside? Same number of hours, or more, for less money? Thanks, but no thanks. I've lived up to my end of the employment contract and I expect them to live up to theirs.

 

[Bribyk]

I wouldn't take a cut because most CEOs never would. In Canada last year (2008), the average top CEO pay increased by 22% over 2007, presumably due to their stellar performance.

 

[TurbineGen]

I'd take a pay cut down to 60% so long as I was expected to only put in 60% of the hours. Like Scotty said, if there is a genuine lack of work, then why would they expect me to put in 100% time and get less pay? I keep a 4-5 month buffer in my bank account in the event I might get laid off. I also have plans for a side business that I can immediately fall back on as well.

------------------------------------------------------------------------
If it is broken, fix it. If it isn't broken, I'll soon fix that.

 

[ornerynorsk]

zero dollars. Life is too short to go backwards. If you need to go backwards temporarily, it should be on your own terms. If a ship develops a leak and it may or may not sink, when exactly does one abandon ship? This question has different implications for every individual. Only you can answer it for yourself.

 

[ajack1]

I think Zapster highlighted what I was trying to get at in the original post. I would not expect anyone in their right mind to take a pay cut if they didn’t need to or could walk into another job on the same or better pay, but as he/she says if you are starving you would, you would almost certainly resort to stealing from garbage cans but not out of choice. I would guess many on this site will fall somewhere between those two, a drop in lifestyle is a long way from starving.

I also expected the normal I would never take a pay cut unless management/ shareholders/ owners did but I wonder how true that is if it became reality?

If others found themselves in the unfortunate position that 737 eng found themselves in would they do the same, even if you had 4-5 months contingency money put by would you feel secure enough to believe there would be a job of equal value available in that time?

 

[cksh]

As an automotive engineer in michigan I would certainly entertain a pay cut. But how much I don't know. Maybe 10% if I was desperate. There are still jobs up here and I get calls on occasion for other jobs so I would really have to weigh my options the moment something happens.

Some coworkers have already had temporary layoffs. Some permanently. I have taken a week without pay. My wife and I planned for the temporary layoff but I was lucky and got to stay on.

My company would expect 120% output regardless of how many days we had to work per week. Just as they expect now. I do not get overtime so from their point of view they have nothing to lose. They would have us work on the weekend to make up for the 3 days a week we could work. It's funny though that I have never heard the term mandatory overtime thrown around. I think it has been hammered so much into our long term employees heads that they don't know anything else.