Slow times - how long do you have

[oneintheeye]

Hi some insight from people who have been through this downturn before. Our work has dried up somewhat, although it is expected that we will have work coming in by march/april although this is not confirmed yet obviously. One of our 'framework' work will start coming in but how much and when is not clear.

My question is this, how long does it take before an employer starts thinking of cutting staff. The contract guys have long gone. We are typically on one month notice.

 

[frv]

Not long. As soon as expenses start outpacing income, I'd expect layoffs. An employer will probably be willing to forgo profit, but he will likely not go into substantial debt if there is no assurance that there is a light at the end of the tunnel.

 

[IRstuff]

There's no strict rule of thumb; everyone's different, and responses to this situation would be different.

In our case, our GM elected, back when the economy was booming, to not hire all the people that appeared to be needed for the work at hand. This allowed him to cut less than 10% when the downturn got sufficiently severe to put a crimp on overhead spending. Nonetheless, we're still riding pretty hard on the overhead accounts, again, because our GM believes in maintaining a relatively steady workforce.

Nonetheless, at previous companies, first sign of recession usually involved massive layoffs, which were matched by massive hiring when good times were evident.

TTFN

FAQ731-376

 

[MechEng2005]

I agree that every situation is different.

Some people are more easily replaced to start with. If a chain restaurant lets a few servers go, they can easily find replacements a few months later if needed. However, if the company has some obscure, custom-written software that was created 15 years ago, they might consider hanging on to the IT guy that doesn't have much to do most of the time, because he is occasionally needed to keep things moving. Even if they can find somebody that COULD do it when they are "in the black" again, how long would it take for them to get to the same skill and comfort level?

That's only one of MANY factors. I'd say it's too diverse to even begin to get an answer here. The best indication would be that you asked the question. Maybe your gut is telling you something?

-- MechEng2005

 

[ScottyUK]

My perception here in the UK is that the contractors have been hit hard by this recession, but staff engineers have faired rather better, in my industry at least. I know of literally dozens of friends who are contractors who are currently living off cash banked during the good times, while I know of only one staff guy whose job has gone and that was as a knock-on from a feeder plant closure. Of course the situation in other industries will be different: the heavy electrical industries like generation and transmission are still faced with a recruitment crisis caused by the aging workforce and their abject failure to recruit and train young engineers for two decades from the late 70's through to the late 90's (Thatcher's legacy), so that is likely making my sector appear rather more buoyant than it really is.


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

 

[oneintheeye]

well our company is slightly differnet in that it is part of a large organisation and our section is not expected to make a profit as such (any profit is re invested). We are a service company to the main company i suppos is one way of looking at it.

 

[shamsdebout]

I was layed off from a small company with only one slow month, the crazy thing was that work was to come just delayed. They were quick to get rid of me, they became busy again (in max 2 months), fortunately I was able to land another job. I will use 1 slow month has my guage to know when to run for cover.

 

[SomptingGuy]

I'd be more worried. Cutting service costs (at least in my industry) is normally first on the list. The work done by you guys is assume absorbed into the profit centres by those employees working for free mainly, whilst also doing their own day jobs.

- Steve

 

[oneintheeye]

well the service we provide couldn't be provided by any other department in the organisation. They would need to go outside the company if we did not have the staff.

 

[TDAA]

The thought is always there. It is more a matter of when do they take action.

 

[ornerynorsk]

Nobody is indispensable or irreplaceable. The value of an employee is purely relative. What makes it past the cutting table depends on how dire the situation is. You always need to have a contingency plan, or at least a fair idea of what you'd do if presented with the pink slip today.

 

[TheTick]

In some places, contract guys get to stay while direct-hires are laid off. This is due to accounting. Employees are headcount; contractors are listed as an operating expense.

 

[KENAT]

"They would need to go outside the company if we did not have the staff" haven't you heard of the outsourcing trend? In our industry, or at least my employer, keeping 'fixed' costs down seems a major factor. This is related to what Tick say.

I've seen places lay off staff to preempt slow times even though they expected better times just 2-3 months later.

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[IRstuff]

Up to a point. In aerospace, contract labor does not come cheaply, and when charging to our contracts, purchased labor is at least as expensive as regular labor, so we only do that when we're short-handed, and there isn't enough demand for a permanent employee.

TTFN

FAQ731-376

 

[oneintheeye]

I'll try and respond to some points raised. Here contract goes first (they have all gone). Outsourcing happens yes but they will not be able to outsource teh projects upcoming for various reasons, for one that they would not get it up and running in time and to a quality to meet the timescales, that I am certain of. Other reason is that a presence here is required. What I am getting at is would a company lay people off with one months notice even though it is likely that there will be work in 3 months. i.e. we would serve one month notice, then there would be a month gap, then work would come in.

 

[SomptingGuy]

Where I work, the sword of damocles generally arrives in an email communication on a Monday afternoon.

- Steve

 

[brandoncdg]

Over here in SoCal most of the larger 50+ Civil firms went to Skeleton crews slowly over the last 1.5 years. I was somewhat surprised this hit them so suddenly and they didn't see it coming.

That March timeframe is very odd as our jobs are supposedly waiting for funding sometime in Feb/March. But looking at the banking sector, banking is getting more messed up as each day goes on and money is becoming more tight to lend.

Someone, accountant or principals??, at each company must be following that trend to know how to proceed into the future.

Civil Development Group, LLC
Los Angeles Civil Engineering specializing in Hillside Grading

http://civildevelopmentgroup.com

 

[KENAT]

herewegothen, that's almost exactly the situation I was talking about. Layoffs were made in September/October, while I was off doing the final testing on a product that would lead to a big, urgent, order in November/December.

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[NomLaser]

Nothing surprises me any more. The last place that I was at, there were 2 Mechanical Engineers and 1 Electrical Engineer. I had been with the company for 2.5yrs, about a year longer than the other Mechanical Engineer.

I was in charge of nearly all of our main products. Someone decided that since they were building all of the products in China that they could do the Engineering in China as well. I was let go about 1.5 years ago and they are still fighting design issues that were changed after going overseas.

 

[IRstuff]

The answer still depends on what pressures there are on company. Obviously, the ideal situation is to ride out the small wave and keep the workforce intact. However, if your company is on the margin, there may not be sufficient leeway for that to happen, particularly since future jobs are never guaranteed; even awarded jobs can be taken away or cancelled.

Bottom line is that no one can predict the future with sufficient certainty, even from within a company.

TTFN

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