Ever seen a permie take a pay-cut?

[Scrag Meister]

With all this talk about rate cuts in finance (UBS), a director of a large recruitment firm made a comment about pay cuts whether permie or contractor was a wise thing in the current climate.

Over the last few years where the economy has been in tatters I have never heard of a permie getting told they needed to take a pay cut. Redundancy yes, but not a pay cut.

Surely if all the permies took a 5-10% cut the employer could afford to keep them all on board rather than swinging the redundancy axe randomly.

[mudskipper]

With all this talk about rate cuts in finance (UBS), a director of a large recruitment firm made a comment about pay cuts whether permie or contractor was a wise thing in the current climate.

Over the last few years where the economy has been in tatters I have never heard of a permie getting told they needed to take a pay cut. Redundancy yes, but not a pay cut.

Surely if all the permies took a 5-10% cut the employer could afford to keep them all on board rather than swinging the redundancy axe randomly.

Yep. It happens.

HP asked them all to take a pay cut a few years back. I think in Europe it was voluntary and the US had no choice. I think very few people volunteered!

HP begins selling pay cut plan to European workers ? The Register

[BlasterBates]

This is a legal problem, breach of contract, they'll get sued. It's much easier to make people redundant than impose a pay cut, otherwise that's exactly what they'd do. Of course they could negotiate it but it's simpler to go round handing out redundancy notices than trying to negotiate pay cuts with everyone, and it would also be illegal to sack everyone and offer them new contracts. If they tried to change the law there would be a massive backlash, and it would be open to abuse. Having said that a mechanism for reducing salaries in a recession would reduce unemployment. German companies can put their workforce on "short-time", and reduce wages temporarily, this really helpt keep unemployment down.

[doodab]

A few German SMEs offered the staff shorter weeks with lower wages rather than make them redundant back when it all kicked off. Obviously it's only an option if people can afford to take the hit. It's good for the companies as they get to keep their skilled people, and the people get to keep their jobs and any benefits. I guess it depends what you can negotiate with the unions in a lot of cases as well.

[Mich the Tester]

A few German SMEs offered the staff shorter weeks with lower wages rather than make them redundant back when it all kicked off. Obviously it's only an option if people can afford to take the hit. It's good for the companies as they get to keep their skilled people, and the people get to keep their jobs and any benefits. I guess it depends what you can negotiate with the unions in a lot of cases as well.

Yep, but of course German SMEs tend to have (not all) a good relationship with their employees who will trust that they actually will save their jobs that way and give them the rewards in the good times. Would anyone trust a stock market listed PLC to do that? Fork off, any company continually 'reorganizes' and presses a redundancy randomizer button every time the quarterly profits fall by 0.01% cannot expect employees to show any kind of loyalty whatsoever.

[bobspud]

With all this talk about rate cuts in finance (UBS), a director of a large recruitment firm made a comment about pay cuts whether permie or contractor was a wise thing in the current climate.

Over the last few years where the economy has been in tatters I have never heard of a permie getting told they needed to take a pay cut. Redundancy yes, but not a pay cut.

Surely if all the permies took a 5-10% cut the employer could afford to keep them all on board rather than swinging the redundancy axe randomly.

Yes my last ever permie company was taken over and the new company told all the Principal Consultants to take between 5 and 15% because we were too expensive compared to their staff. (Little did we know that the new place had wall to wall fat old f*ckers in non fee earning positions taking home far more than some of the chaps that was earning 1500 a day for them while taking a pay cut.)

[doodab]

Yep, but of course German SMEs tend to have (not all) a good relationship with their employees who will trust that they actually will save their jobs that way and give them the rewards in the good times. Would anyone trust a stock market listed PLC to do that? Fork off, any company continually 'reorganizes' and presses a redundancy randomizer button every time the quarterly profits fall by 0.01% cannot expect employees to show any kind of loyalty whatsoever.

Well this is true, German SMEs are often family owned and have strong ties to their communities so it's a bit less impersonal.

[alreadypacked]

With all this talk about rate cuts in finance (UBS), a director of a large recruitment firm made a comment about pay cuts whether permie or contractor was a wise thing in the current climate.

Over the last few years where the economy has been in tatters I have never heard of a permie getting told they needed to take a pay cut. Redundancy yes, but not a pay cut.

Surely if all the permies took a 5-10% cut the employer could afford to keep them all on board rather than swinging the redundancy axe randomly.

Last time I was in Zurich the company I was working with was taken over. They offered permies new contracts, where 15% of pay was now a "bonus". After year 1 no "bonus" was paid = 15% pay cut.

I didn't stay

[PAH]

Ever seen a permie take a pay-cut?

Nope, but MF has seen one take an uppercut.

[VectraMan]

I took quite a big pay cut in exchange for shares several years ago, which of course largely turned out to be worthless - although you never know.

Apparently current Permie Co. made loads of people redundant and hired them back at 20% less after the .COM bubble burst. Which sounds completely illegal, but I guess they must have found a way round it.