As a topic of discussion, towards the goal of lowering overhead.
Volunteered by individual employees, or asked for across the board from the CEO?
If employees give in:
a) reasonable to expect something in return?
b) should a finite metric be in place to determine when said concessions terminate?
c) what would be reasonable to expect/give?
Anything else you can think of?
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Replies
bump
Something in return? At this point the CEO is probably wondering if he can keep the ship from sinking. It might be appropriate to just be happy the job has not gone away. I suppose it might be smart to have the CEO open the company books... his salary out in the open, etc.
I would set a fixed period for the concessions. Something like "we'll run this way for 6 months and see where we are". If things improve, theoretically there will be other options for employees, so the market might handle that on its own.
What is reasonable to give up? I think this has to come from the boss, and you have to trust him. If he says "I can keep the work flowing if everyone takes a $5/hr cut"... and you trust him... you go with it.
This strikes me as something that might work if everyone has some history with the company, and everyone knows the boss is an A+ human being, I'd proceed. No matter what happens, there is the potential for bad feelings. The ship might sink anyway, or the boss might decide he can't take it anymore, etc. I would go in with no expectations except maybe work continues for a little while.
Thanks David,
You hit on many good points.
The fact that the ship may sink anyway is perhaps the biggest reason why I would think a body might look for something in return for the concession.
Eric
I would want to see the companies financial's.
Particularly the owner's compensation unless as David said you absolutely know the owner is an A-1 person. Worked for a company at the end of the 80's whose owner asked the crews to concede something on wages to keep the doors open after a couple of rough jobs.
Crews obliged, within 2 years owner bought himself a new truck and a mountain cabin but balked at restoring wages.
They can't get your Goat if you don't tell them where it is hidden.
Thanks dove.
I'm on the same track as you.
It has to be transparent.
"Concessions will be given back when we get going again" ain't gonna cut it for long.
You are a CEO. This is business.
Company I work for during the last tough times, for our industry any way did something like this.
Employees took a 7% pay cut to aviod layoffs. Management took a 10% pay cut. No exceptions.
Once we had a couple of quaters of profitablility back pay was restored.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
If an opinion contrary to your own makes you angry, that is a sign that you are subconsciously aware of having no good reason for thinking as you do.... Bertrand Russell
http://www.drawingwithlight.smugmug.com
Thanks.
I'd say that if an employee is offering or accepting a significant pay cut on behalf of the company it's completely reasonable to get something in return.
If an employee is willing to sacrifice for the company, it seems like more of a cooperative, rather than a typical employer/employee relationship. Are you looking for profit-sharing, or what?
k
Are you looking for profit-sharing, or what?
Not sure. It just seems fair that something should be given in return.
Thanks for your reply.
yes, it does seem fair.
k
Eric,
on the surface it seems to me that the ONE thing you really want out of a wage concession---is to keep your job---ultimately that's your goal.
but- it certainley seems reasonable to set a time limmit on it, for example" let's agree to a $5/hour wage cut for the next 6 months----and we will re-visit this conversation at that time"
also-- it would seem reasonable to have an understanding that your wage will return to "pre-concession" levels BEFORE any new hires are made.
but ultimately--you don't have any work-if there isn't any work.
IF 6 months from now--you want your wages bumped back up to pre-concession levels--and your employer says "sorry, but no"-- it would be quite reasonable for you to seek employment elswhere at "pre-concession" pay level--- if you are un-able to find higher paying work--perhaps the existing employer is correct in not restoring the former pay rate.
My best wishes to you-because if this is even under consideration, things must be touchy,
Best wishes, again-Stephen
Eric
Is this concession related to your change in responsibilities? In the other thread you said you were no longer Production Manager.
If you are not doing the manager duties and back in the field then yeah a reduction in pay would be apprpriate. And I don't think any concession would be warranted. However if work picks up and you are eased into doing much of the same duties as Production Manager then a return might be neccesary. And I would make that explicit in my concession speech
good luck
Never got a raise with the promotion.
It's just all releated to the slowdown.
From my experience in a couple different "downsizing" cycles is the pay cut will not fix the company's problems and you will be unemployed fairly soon anyway. You better be seeking other opportunities.
From the employees' point of view, they need to ask the question they implicitly answer every morning when they go to work: Am I better off doing this job than the alternative(s)?
In a lousy economy, most people making $20 per hour would rather make $15 than have to look for another job that may not exist. We stay at our jobs for a variety of reasons: Money, job satisfaction, tangible benefits like health ins., intangible benefits like no hassle if I stay home with a sick kid once in a while, etc.
In this economy, most employees are in a weak bargaining position and can't really demand anything. Maybe there can be some sort of recognition between labor and management that "we're all in this together and we all need to sacrifice" with the hope that when things get better, they get better for everyone. Thus the suggestion "let's look at things in x months" may be the best anyone can reasonably expect. No rational owner can promise anything very specific in this economy.
I think you are right on, As a small GC, we have just this week began to think along those lines. Landed a job yesterday with those terms agreed upon with my guys just to keep working. It has been excruciating to put together a full work week for the guys, let alone myself as owner. We are a tight group and want to stay together, life on the outside is grim with no better alternative. Going forward, we may have to do this to survive..... after all we are all in this together. I'm glad I read this thread!
Going forward, we may have to do this to survive..... after all we are all in this together
Not many companies/employees are in this postition-that is, "we are all in this together". Employees with profit sharing are of course a little more vested in the "company" than those without. Size of the company has something to do with it. Employees of a large company often don't feel they are a part of the whole. Smaller companies can seem to be more of a team.
An interesting question for sure. Extend it to a situation with your subcontractors. I'm a sole proprietor. I use plumbing, electrical, and often drywall subs. Am I going to find myself in the position of asking their help (lower price) as we go forward? I know that I've been thinking on the possibility of adjusting my labor charges, but will I want to or have to shoulder the entire burden?
Great time to be thinking like this with the joys of Christmas just around the corner.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
I guess the fact that the holidays and a long winter ahead are upon that makes it even harder. My three guys have been passing out cards to job sites, their family, and even stopping by secondary and primary homes that need an obvious roof patch or railing fix. I must say that they have extended my efforts on their own accord (off the clock) to help our cause and couldn't be more gratefull. It took a long time to find these fellows and would regret letting them go, not to mention they will work for less money. Although they know that there is no guarrantee on the outcome or short term future, it sure is nice to know they have our back and treat this as more than "just a paycheck or job". I count my blessings everyday with these guys and breaks my heart to know that these current circumstances with the economy may very well bust it all up on us!
I understand your feelings. Hard to find guys like that and hard also to find employers that have the welfare and concerns of their employees at heart.
Being one guy I have no one to rely on, nor anyone to be concerned about but me in regards to this business. The subs I use would be affected, but not overwhelmed because of my loss of work.
I'll be out of commission till after the New Year but am thinking already of ways to cultivate potential business. It has been slow b/4, but never with such a cloud attached. Seems that every time my concern was beginning, the phone would ring. This time-not so sure.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
Calvin,
thanks for the response. I agree with the "not so sure" feeling with todays current circumstances. The phone always rang to the rescue and it always would work out. Now when I come home, I ask my wife (bus. partner)"did anyone call?" and we both start laughing, if we did not laugh we would probrably cry. The hardest thing is to stay positive.
Maybe start to attend church on Sunday? Not the religious type, but I suppose I could be if it made a difference. That is a thread in itself. I am ready to let this year run itself out, and hope that the incoming year of 2009 will bring cheer and contracts for all!
Amen,
that is if you go on sunday.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
Will do!
How do you think they will feel about an IOU in the collection basket? :-)
Why not throw some business cards in? Can't hurt to extend your networking!
Edited 12/11/2008 6:12 pm ET by MikeRyan
I don't know about you.....
but I'm not a church goer.
However, our ad campaigns run in the same ditch.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
C & E here...or when I do something really grievious!
Shoot, write on your business card you are throwing in (?) . They need (?) done, give you a call.
The paster on sunday will get up there and say "brothers and sisters" lemme see ya hands............
Ceasar put a new threshold under the rectory door as his donation!
say amen!
Can't beat that ad.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
Boy, that would open up new doors, so to speak!! Do you think the big guy upstairs would then forgive past sins?
I've been a believer in doing good deeds.
Hope someone is watching. But if not.
I sleep real good at night.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
Am I going to find myself in the position of asking their help (lower price) as we go forward? I know that I've been thinking on the possibility of adjusting my labor charges, but will I want to or have to shoulder the entire burden?
Cal,
I have somewhat found myself in this position. I don't use alot of subs and have never tried to negotiate with them for a cheaper price.I truly believe ya get what ya pay for but......... I have bid a few jobs lately and did not get them even though I bid my end "real tight''.
I did not feel like I got a "I need this work also" price from my one of my subs. He has always been on the high end but was willing to do remodel work which is mostly what I do. Some of the other ones seemed to make some concessions in their price' judging from past history.
Been thinking about sitting down with him and explaining my situation. I can't continue to pay XXXX for this when everyone else is paying #### and still compete in these economic conditions.
Not sure what to do.
dug..........not liking these adjustments
I hear you. On my remodels I run a different model. It's always referral and usually ends up Cost plus a percentage. When I get a price from plumber/elect/etc they usually give me a more firm bid on the job. However, we go T&M on the job. There are usually no surprises as all the trades are well versed in remodels and don't come up with that deer in the headlights look.........."well I didn't know that would be there"..........Their final bill most always is less than their estimate. I have that thought as a cushion but am hesitant to play that numbers game.
So, there's no way I can go down unless they go down. It's going to make for some interesting discussion over the holidays.A Great Place for Information, Comraderie, and a Sucker Punch.
Remodeling Contractor just outside the Glass City.
http://www.quittintime.com/
Different outlook.
Thanks
I think instead of a pay concession I would negotiate for a shortened work week allowing you a chance to make a second income find side jobs or help bring in work with a commission for successful leads.
ANDYSZ2
WHY DO I HAVE TO EXPLAIN TO FRIENDS AND FAMILY THAT BEING A SOLE PROPRIETOR IS A REAL JOB?
REMODELER/PUNCHOUT SPECIALIST
Slippery slope here.
Ok to ask the employees to give up something either willingly or not but management has to be very careful.
Anything that's even slightly perceived as a luxury or unneeded will cause moral to plummet.
No fancy vacations (ok, you can go see the MIL in Deluth), no new cars, no golf outings, no flying anywhere to conventions, if you have a boat, no taking it out, if you have a place in Vail, it's on the market and you don't go there anymore....
Employees aren't stupid.
Runnerguy