Wage cut or wage freeze?

Source : Sticky Wages

Check out the above story… It refers to the term “sticky wage” where companies didn’t cut wages in recessions. They just made them “grow slower”… Yet lately there have been actions where wages were cut and it’s an odd move when thinking of the following statements (which are quoted from the article).

• 1. Employee Morale: Truman Bewley found out that pay-cuts affected everyone’s morale, while firings only affected the minority. I am sure all of you, who have seen layoffs agree that the people left behind, are much more productive than they were ever before. When you see your colleague getting fired, you work extra hard to make sure that you are not next in line. Pay-cuts don’t have the same effect, as everyone is on the same boat, and there is no shock effect to spur employees.
• 2. Fear of the best people leaving: The job market has slowed down in the recession, but there are still plenty of firms that are hiring. If an employer cuts salaries across the board, it is quite likely that the better workers will find work elsewhere. So, firms which implement across the board wage cuts, risk disgruntling their better employees and have them leave for greener pastures elsewhere. This factor is a major contributor to sticky wages.
• 3. Get rid of Wally: Not all employees are created equal; some are more efficient than others. In all companies there is some deadweight. Some of your employees will be like Dilbert, some like Alice and then you will have a Wally. If you kept Dilbert and Alice, and fired Wally – your team will still do well, if anything the overall productivity of your team will increase. Even the Pointy – Haired boss knows that it is far better for him to fire Wally, than to take a chance by cutting the salaries of Alice and Dilbert, and risk losing them to Elbonians.
• 4. Preparing for the turnaround: Another factor that contributes to sticky wages is the hope of a turnaround. I know several people who are hanging around in companies without any work or pay – cuts. While there isn’t much demand for their skills now; their employer doesn’t want to take a chance. The employer is worried that if they let this person go, the competitors will build a strong team in this particular area, and drive them out of business when the market eventually turns.

Freelancing during the lesser times

Freelancefolder.com features “8 Ways Freelancers Can Survive In A Troubled Economy” ;

• Be a Bargain Hunter. Whether you’re buying routine office supplies or making a capital purchase, make sure that you get the most value for your dollar. Check sales flyers and compare costs to maximize your purchasing power. You can also look into barter arrangements to reduce your costs.
• Don’t Spend Everything That You Make. I give this advice during good economic times as well. The advice to save some of your earnings is doubly important in an uncertain economy. Whenever you are paid make sure that you set some income aside for times when your business is slow.
• Moonlight on Your Freelancing. You may have started your freelancing business by working a corporate job and moonlighting as a freelancer. There’s no reason why you can’t turn the tables and moonlight on your freelance business now. Consider taking a part-time job to bolster your monthly income.
• Ask Past Corporate Employers for Gigs. Many employers have hiring freezes, but their workload remains the same. While they may not be able to hire a new employee, often they are allowed to hire temporary help to meet a deadline. (I’m told that the money for contractors comes out of a different “bucket.”)
• Consider the Do-It-Yourself Question. Are you paying others to do tasks for you that you could actually do yourself? If your cash flow is slow, then you may want to consider whether it’s more cost efficient to continue outsourcing as you have been doing, or to start doing the tasks yourself.
• Make Sure To Consider Your Tax Liability. Even if the economy is slow, it is likely that you will still owe taxes at the end of your tax year. To avoid being saddled with a tax burden that you can’t pay, start setting money aside for taxes now. If you paid estimated taxes during the course of the year, then ask yourself if you paid enough.
• Broaden the Scope of Your Business. If your workload has slowed, then ask yourself if there are other products or services that you could add to your current offerings. Do you have a skill that you are not using? Broadening your scope could bring additional business from current customers as well as attract new ones.
• Be Patient. Difficult economic times come and they go. It may be a matter of weeks, months, or even years, but this tough economic period will also pass.

LogiTouch

About a month ago I started my own webdesign agency. So after almost 2 years of kvaes.be I’ve took the step towards entrepreneurship!

We focus on the “local” market, providing quality websites at an affordable price. It’s not “yet another high priced” bureau… The OpenSource world provides the means which enables us to provide a very interesting price.

Never underestimate what is inside you!

What does it take to be a Project Manager?

The article “Project Management: Do You Have What It Takes?” from Gloria C. Brown was recently published at PMHUT. It’s a good read for those who are thinking about Project Management as a possible carreer path!

Becoming a project manager is not for the faint of heart. In short, to be successful, you must also be an expert planner, problem-solver, diplomat, communicator, leader, learner, and manager. Plus, you must understand the policies, procedures, and politics of the organization in which you manage projects. Enter this profession only if you have the skills and knowledge indicated above, along with a willingness to continually learn more about this exciting and ever-changing field.

Think The Opposite

It’s not always about thinking what’s the right thing to do, sometimes it’s just about checking out the opposite! The next presentation has some good points in it. I don’t agree with all of them, yet you can decide on that yourself… 😉

http://static.slideshare.net/swf/ssplayer2.swf?doc=think-the-opposite-1212255483133635-9

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It’s all about persistence

The next slideset relates to one of the points of the “Become the IT top striker“; namely towards the point about persistence.

http://static.slideshare.net/swf/ssplayer2.swf?doc=its-not-how-good-you-are-its-how-good-youwant-to-be1-1214259674804150-9

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The difference between Consultancy and Bodyshopping

During my career I had multiple discussions about the line between bodyshopping & consultancy. Yet “Work The Line” has a really nice post on this.

Some excerpts…

Does the firm have genuine practice areas based on shared intellectual property? A consultancy should have mechanisms for capturing, sharing, and reusing intellectual property in areas of specialized expertise. These mechanisms can be embodied in people (practice leaders), processes (defined practices for knowledge-sharing), and tools (collaborative software, reusable collateral, etc.).

So is there an infrastructure to back up your knowledge workers? As a consultancy firm your key asset is the knowledge of your people, so are the able to share this asset?

Does the firm limit its consultants’ billable time for strategic purposes? A body shop bills as much of its consultants’ time as possible, all the time. In contrast, a consultancy continually invests time in improving its collective knowledge and performance.

Key indicators here are training & the % of people “on the bench”. If people are allocated fulltime towards a customer; how can they be acquire their knowledge? One might say that this is because they are trained on the job, but those are not always the grounds where one can gain much experience in new/expert fields. When spending all your time “on the road” is not allowing the time for reading, communicating and reflection which is essential to maintain quality.

Does the firm measure success in terms of profitability per engagement? This question is closely related to the last two. If a firm’s goal is simply to bill as much as possible, and its preference is to bill for time and materials, it will have no interest in the profitability of individual engagements, and will simply “run the clock” as long as it can. Conversely, if a firm uses its knowledge to deliver high-value fixed-price engagements, it will try to perform engagements as quickly and efficiently as possible, in order to maximize their profitability.

The profit made on project with a fixed price is based upon your knowledge. The more you know, the more efficient you can provide the solution. Where is your motivation when you charge by the hour? Then it’s just a hidden form of interim work (to me).

Does the firm leverage new skills to build higher-level relationships? Over time, a firm builds skills engagement by engagement. It comes in to offer skill A, and picks up skill B in the process. If the firm simply adds these new skills to its list of “things we do,” it is behaving like a body shop. If the firm analyzes, consolidates and leverages these skills into higher-level client relationships, it is behaving like a consultancy.

Do you have many different profile which are being “rented” towards clients, or do you have a specific area where your knowledge dominates? This come close to the question whether or not the firm can distinct one self (as a brand) by encapsulating a specific value proposition.

Conclusion

A body shop bills as much of its consultants’ time as possible, all the time. In contrast, a consultancy continually invests time in improving its collective knowledge and performance.

Why did you hire me?

Keith LaFerriere wrote an article titled “Why Did You Hire Me?” for “A List Apart”. It’s a definite must-read for every professional out there!

Can you remember being on a project or in a professional position where someone, somewhere, didn’t raise the question: “how much are we paying for this?” The question is sometimes born of jealousy or financial responsibility, but usually not out of malice. The client and their team want their money’s worth. Do your job correctly and hopefully it won’t become a question of “Why are we paying for this?”

And for those who’re just a tad lazy, here’s the bottom line

You are responsible for your own happiness, but you should always be aware of the cost. If you feel you will be able to perform to new levels and maintain a sense of peace in your career, then by all means explore, but please remember that those who do not learn from history are doomed to repeat it. It shouldn’t be a question of “Why did you hire me?” but “When will we get to work together again?”

Become the IT top striker

The IT hat-trick
IT is a service oriented group within the company, yet they often see themselves as a separate entity. Yet some IT staff manage to get noticed in all the right ways. What are the secrets of their success? Cio.com featured an article called “Four Secrets to Becoming a Rising IT Star”. The basics to start with are energy, enthusiasm & passion. But the difference can be made by scoring the following hat-trick:

• Be good to your end users : You might be the next upcoming tech guru, but remember who your customer is… Do not make people feel stupid! People might not be that technical, so present the information in a manner that they understand the technology and it’s importance to the company. When you go to the doctor, would you appreciate it that he started laughing at you because you didn’t know what that medical term meant?
• Business Intelligence : Is your IT department leading your company, or doesn’t it even seem to be able to follow? Get to know your organization & business. What do they do things, and how can you help them to improve?
• Communication & Trust : Trust is the glue that binds relationships together inside and outside of work. Without it, moving up is virtually impossible. And honest communication is a huge part of building trust with your manager. Share the good news—and the bad. Information sharing, when it comes right down to it, translates to respect.

Did you say manga?!?