'Would you take a pay cut?' Poll results/discussion

MSE_Martin

nykmedia wrote: »

This is one crazy poll - it is automatically assuming that every single person employed by the 'company' earns more than the national minimum wage, not many of them about as far as I know. My answer would be no - if the company can't afford to pay it's staff then it's whole business plan is flawed, expecting staff to help bale them out isn't a very good contingency plan.

Not that crazy the idea is to judge people's attitude to a pay cut versus job security

As for some of the comments about well run businesses... and whats its chances.

The big issue facing many companies at the moment is cash flow. I have an acquantance who runs a big company. They're full of orders, doing lots of jobs but no one is paying on time, leaving them struggling to pay their own staff due to cash flow.

There can be many causes of company problems!

Martin

Frugaldom

MSE_Martin wrote: »

...There can be many causes of company problems!

Martin

I'd still say that most problems revolve around a similar root problem, that being money (or lack of).

I don't see how asking an entire workforce to take a 10% paycut can reflect peoples' views of a payrise. It's basic arithmetic and the Government can dictate most of the numbers in some way, shape or form.

With regards to slow paying customers, I think everyone is in the same boat there and if that's something people don't want to have to face then they work for an employer, who in turn makes them some sort of guarantee that wages will be paid in full, on time, each and every week or month and will even be paid when off sick, having a child or on holiday. When the employer can no longer offer those guarantees, then it isn't for the workforce to say 'OK, pay us less, we understand and we will stick by you through thick and thin'. Nice theory, though.

HOWEVER, in the event of inflation going into minus figures and interest rates dropping to zero, THEN I would have no legitimate argument other than to EXPECT any annual adjustment to salary/wages to be in line with that inflation rate.

before_hollywood

in a word- no

i'm classed as senior on my department, and 2 years of bloomin hard work got me there, being called all the names under the sun ****ing this and **** my **** are phrases regularly shouted at me in my job, i earn well under average wages and deserve every penny i get imho, i have given the company hard work and loyalty and to be told, have your wages cut or lose your job would be an insult.

a previous company i worked for did the same to us, alongside cutting hours of existing staff so favoured staff from elsewhere could pick and choose their shifts, the building i worked in is now deralict

ceridwen

No - I wouldnt.

I wouldnt feel happy about it. But I honestly cant afford to even contemplate a paycut - as my salary is so low anyway - its just honestly not possible with the best will in the world.

Also - it presumes that one could trust management to have done their level best to run the firm well/to take equivalent paycuts themselves/to put the salary back to normal again once the firm is back to normal/it presumes firms as a whole WILL ever get back to what we regard as "normal" again. The biggest question of the lot is whether management were just using the current economic situation to get a paycut they wanted anyway - as they had been after paycuts anyway - as they wanted the staff on lower pay.

So - definitely not.

Cant afford it.

Wouldnt trust management to be telling us the truth (there's always a first I guess - but I wouldnt want to bet on it).

Gorgeous_George

I'd consider it. If I thought cuts wouldn't be a good thing for the long term future of the company.

I would want some assurance that my final salary pension scheme would be based on my 'pre-cut' final salary and that any future redundancy would be based on my 'pre-cut' salary.

I'd be more likely to agree if I worked in a small lean company.

GG

sdooley

Percentages are a con. On the way up and on the way down.

Managers on £40,000 will lose more in absolute terms than the single parent cleaner on £10,000. But they can afford to lose the £4,000 on the way down much more than the cleaner can afford to lose the £1,000 (might mean choosing between rent, food or heating).

On the way up an across the board 5% rise will be a stonking amount of money for the chief exec but still not much for those at the bottom.

I still haven't answered the question though. It's a bit of a Prisoner's Dilemma, like the original Dilemma problem I think you'd have more socially-reinforcing behaviour (agreements to the cut in salary) if colleagues were to be told who had agreed to take the cut, and less if there was a suspicion that bosses would free-ride on the underlings cuts.

One company whose staff will earn less this year - bonuses probably down at the John Lewis Partnership. The staff own the store - even more likely to reinforce 'social' behaviour.

ceridwen

Like the phrase "bosses would freeride on the underlings cuts"........probably all too true unfortunately. Look at how many firms have cut back drastically as regards provision of job pensions - BUT the executives in those firms tend to have their own separate pension scheme and that stays the same - ie no cuts in pension for them, whatever they are doing to the workforce.

It is all too true that its usually the case that its one rule for the bosses and quite another for the employees.

Its also a very good point that a percentage cut impacts more on the low-paid. If one is on very good salary of, say, £50k p.a. - then 5% of that would mean just a little bit less going into savings or 3 holidays a years, instead of 4. But 5% of NMW or a salary little more than that - then the person in those circumstances would probably be worrying about how to pay the bills.

The_Miser

In some industries the salary bill can be over 70% of overheads so a 10% cut can make a real difference. In other industries where it is 1% then a cut makes relatively little difference.

Jimmy the Wig; in my company the overheads (desk space, NI, pension contribition, per person averaged 80% of that person's salary so losing just one person reduced the overheads by nearly twice his/her wages. That is considerable. Would you prefer to be on 90% salary or no salary?

Stevemcol;
Natalie6999:
hopefully all "bonuses" and fancy cars would be cut by 100%. If not then employees would be well justified in refusing to agree.
I would go further; as an extreme each person from CEO to the loo cleaner should get the same percentage (over 100% of course) of his or her absolutely necessary survival expenses. Prior to the "great recession" one London partnership paid its staff peanuts but gave them large bonuses based on profits. With the recession the partnership was losing money heavily and the partners had each employee investigated. Each employee was then told a fictitious "profit figure" for the firm sufficient that he/she got a bonus which was sufficient for that employee and family to live based on his / her circumstances; the bonus was paid by the partners out of their own pockets. My own company used to supply its more lowly paid staff with a weekly "box" of basic foodstuffs as well as giving every staff member a (rather basic) breakfast

nykmedia; if the company can't pay its employees their normal salary then its whole business plan is flawed. Yes - I could say that for 33% of the companies I have had to analyse. Do you want them all to sack every employee and overwhelm the system? Many of those flawed companies will survive into the next upturn when there will be demand for their employees. If your company is flawed then why are you working for them?

MSEMartin wrote:
The big issue facing many companies at the moment is cash flow. I have an acquantance who runs a big company. They're full of orders, doing lots of jobs but no one is paying on time, leaving them struggling to pay their own staff due to cash flow.
There can be many causes of company problems!
Absolutely right; I have seen many many companies go to the wall for just this reason. A good friend was bankrupted in just this way - a deliberate act by a group of customers who wanted bigger discounts.

nyklmedia suggests that if inflation becomes negative and interest rates fall to zero salaries should fall - lovely and logical in concept but who would agree to that!!!

I think SDooley got it right with
Managers on £40,000 will lose more in absolute terms than the single parent cleaner on £10,000. But they can afford to lose the £4,000 on the way down much more than the cleaner can afford to lose the £1,000 (might mean choosing between rent, food or heating). (my italics and highlight).

Try thinking on a different plane. You are nationals of some country or other (mainly the UK I suspect). Your prime duty is to your country so, in deciding, you have to weigh up the effect on your country rather than on yourself as one minuscule element within the hive which is the UK. What would be the effect on your country if you caused the failure of your company and the sacking of all its employees and the loss of foreign exchange earnings (if it exports)? Just try to answer that and all the permutations of it.

Jacks_xxx

The_Miser wrote: »

Try thinking on a different plane. You are nationals of some country or other (mainly the UK I suspect). Your prime duty is to your country so, in deciding, you have to weigh up the effect on your country rather than on yourself as one minuscule element within the hive which is the UK. What would be the effect on your country if you caused the failure of your company and the sacking of all its employees and the loss of foreign exchange earnings (if it exports)? Just try to answer that and all the permutations of it.

That's kind of how I see it honeybun, "looking at the big picture" and all that! Thanks for putting it so much better than I ever could have.

Love Jacks xxx

Murtle

Yes - this is something if I remember correctly that did happen in Japan not that many years ago - they felt it better that all had a share of something, then some had nothing....