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?

 

[jmw]

So the Royal Bank of SCotland needs a helping hand and yet its Chairman was awarded glbal business man of the year for taking it from obscurity to the international spolight in 10 years.
Now we know how it was done and while the rest of us will be faced with pay cuts etc, he is sitting pretty.
It is at times like these that you realise that the various regulators have done nothing but sit on their hands till too late.

JMW

http://www.ViscoAnalyser.com

 

[KENAT]

jmw, a bit off topic, but remember how much he/bank probably donated to political campaigning and I suspect you'll see a relationship.

KENAT,

Have you reminded yourself of faq731-376 recently, or taken a look at posting policies:

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

 

[KENAT]

Found a relevant article.

http://msn.careerbuilder.com/Articl...d976f141de47d7a9214c7f2922299c-287145679-R5-4

Our senior staff have apparantly already taken, or at least agreed to take a cut, so we'll likely be next. Could be up to 7.5% apparantly, at least that's what the lowese level of directors so far affected have taken.

KENAT,

Have you reminded yourself of faq731-376 recently, or taken a look at posting policies:

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

 

[KENAT]

Sorry to resurrect an older thread but...

They finally decided to implement pay cuts across the board, supposedly temporary. It's a sliding scale but for me it's about 4.4%.

Also have to take a total of 12 days vacation between end of June & end of the year. July 4th week, Thanksgiving week (both of which include some holidays) and 40 other hours in second half of year. Conveniently, 'junior' employees get a total of 10 days vacation + 2 'float' days, essentially holidays but with no set date.

KENAT,

Have you reminded yourself of faq731-376 recently, or taken a look at posting policies:

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

What is Engineering anyway: faq1088-1484

 

[vc66]

Yea, KENAT.

I'm about where you are.

And they cut management bonuses by 50%. WHY THE F are they getting bonuses at all?!!!

V

 

[jmw]

Bonuses?

Let's see:
- they are doing such a good job in such difficult times that if it weren't for them there'd be nothing left at all?
- they managed to con so much money out of the government that it'd be a shame not to grab some themselves?
- their contracts were written by lawyers who get a percentage?
- they don't need a reason, even a bad one and who are you to ask?

To be fair, there are reasons why bonuses are paid irrespective of performance.
Some jobs carry a lower pay than usual but with a guaranteed bonus - it means the company doesn't have to pay the same amount of tax e.g. National Insurance or pension contribution.
Notice that the reasons why things are done in such a manner is usually nothing to do with what is good for the employee or even the company, but generally what is good for the investors - this usually means the top management are the prime beneficiaries and their bonuses are also ring fenced and probably some also get a lower salary (as it appears in the company report) but a bigger bonus.
When I say "or even of the good of the company" it is because some directors are past masters at running companies into the ground and coming up smelling of roses.

The methods of selling failing businesses at top prices is an art form in itself. Sir Arnold Winestock (GEC)was good at putting one or two plums together with a bunch of dogs and selling the whole package to someone else who then shot the dogs.

There was a joke at one company I worked for where the management got together and did a Management Buyout, they were even worse at managing the company for themselves than for someone else: "How do you get Smith, Brown and Jones to manage an £11million company? Give them a £22million company."
Yes, in two or three years they halved turnover and destroyed margins. They laid people off left right and centre and then? they sold the business for more than they paid for it.
Sorry, a rant ongoing? ....I'll stop there...



JMW

http://www.ViscoAnalyser.com

 

[davidinindy]

Wow... I'm a little busy job-hunting to read all of the replies. I did want to add my .02$ though.
I would've considered taking a pay-cut or working a 4 day week with coorosponding pay versus just being let go.

And I disagree with the statement that engineers are in demand and shouldn't be concerened. While I'm not a degreed engineer, one other of the 12 let go this round was. If there are no new projects to engineer, why would they keep you? Especially since the company I worked for got bought back in May, and has pleny of other engineersa overseas that can do the job.
I think it'd be foolish to assume any position is stable in this economy.

David

 

[KENAT]

As far as I know we haven't got any bail out bucks from the govt jmw;-).

However, from what I know of it their bonuses aren't directly linked to if the company is profitable, it's not some kind of enhanced profit sharing.

They have certain goals and if they achieve them they get the bonus.

Now you'd hope the goals are in line with what's good for the company, but I wouldn't guarantee it.

My guess is most of the 'goals' are related to reducing fixed costs of business in favour of variable ones - primarily out sourcing of one sought or another. So even if we tank, so long as they out-sourced $X million then they'll get their bonus.

My favourite example is from a few years ago. One Engineering director had a goal related to saving money & improving aspects of quality, the operations VP though had a goal related to on time shipment. Given that the former was at least perceived as an enemy of the latter, guess who got a bonus and who didn't.

KENAT,

Have you reminded yourself of faq731-376 recently, or taken a look at posting policies:

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

What is Engineering anyway: faq1088-1484

 

[davidinindy]

Forgot to ad that I'd be looking for a new job while working at this reduced income.

David

 

[IRstuff]

jmw,

That brings back memories of Fairchild Semiconductor (University), where you learned what not to do at your own company. When Schlumberger was losing a $1B a year on Fairchild, the management proposed a leveraged buyout, which, amazing, the Schlumberger board was actually smart enough to nix. After all, if these knuckleheads couldn't manage their way to simple profitability working for Schlumberger, how were they going to be profitable AND pay off their buyout loan?

It seems like many companies work with retention bonuses, to keep "key" employees from bailing. Often, they run over more than 1 year, which means they could have started when times weren't that bad, and continued through the current debacle. Now, such bonuses aren't necessary, but they're written into a bunch of legal contracts.

TTFN

FAQ731-376

 

[Lion06]

I just found out we're all getting a pay cut. I'm looking already.

 

[RHTPE]

What an interesting thread. Some very good points made.

My job was cut back in the beginning of February 2009. Corporate Engineer, managing the design aspects of work done by 7 technical folks. The new Division Manager (my ex-boss) has essentially doubled those 7 individuals' work load by requiring that all work output must be checked by someone else. Relying on the expertise of the more senior guys and/or expecting each to seek advice when they recognized they were in dangerous waters was unacceptable. So, the group's workload has increased, yet the group's throughput has decreased. Tension in the group has skyrocketed. They are all still working, but guess who's happier?

The senior guys have lost their key perk - a company car. As far as I know the loss comes with no change in salary. No raises this year either.

I would have accepted the loss of the vehicle with no change in compensation. I would have accepted a cut in pay of up to 20%, but ONLY with a corresponding cut in hours of 20%. I would have accepted a clamp-down on my expenses related to continuing education (which were reimbursed by the company). But none of this was offered - instead, they viewed me only as a cost center and cut my position. Now the group has no mentor, and what P.E. services I provided will be out-sourced.

But, as I look back on it all, I'm now the only one who can get up in the morning and have a smile on my face and start the day with a very mellow atititude. I have some limited consulting work that is starting to realize some benefits. Certainly not the kind of income I was accustomed to, but my bride and I will adapt. But I can pick and choose what projects to pursue, and I do not have to fear saying no to a boss.

By the way, I'm probably in the worst position to find employment here in the Northeast US - over 55 with too much experience.

I've vented. I'm good to enjoy the weekend now.


Ralph
Structures Consulting
Northeast USA

 

[cpy911]

I take this thread to heart. I am with a small consulting design company. I am on a sliding scale pay rate, where I get a bonus above a certain billable hours/month. A significant lack of work has eliminated my bonus, which represents a 10% cut from my last job. Now, a deeper lack of work means another 20% cut of my actual salary. I am expected to show up for normal work week hours. Is this a sign to start looking? I have only been at this for a few months now...please advise. I just don't see the upside...but I have been jumping jobs a lot recently due to various economic issues, that I am trying to stay put! What would/should an engineer do?

Thanks.

 

[KENAT]

The sign to start looking was when you took the offer cpy911, you should probably always keep an eye out for alternate employment though how much time you spend on this will vary. Certainly as soon as you weren't getting enough billable hours this should have been a red flag that prompted you into action.

That said, I don't always follow my own advice, I look for other work in fits & spurts but should probably have been putting more effort into it for a while now.

This might be better for a new thread.

KENAT,

Have you reminded yourself of faq731-376 recently, or taken a look at posting policies:

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

What is Engineering anyway: faq1088-1484