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kevabuc

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#15 : August 17, 2011, 09:58:46 PM

What's your current Labor cost %?

What's your projected Labor cost %?

Are employees salary or hourly?

Is $150,000 a salary or profit?

Can you cross train an employee to replace a contracted consultant, if any?

What's your labor productivity compared to similar businesses?

Is letting only 1 employee go going to be enough. Manufacturering is a little more labor intensive then some industries, so let's assume you operate with a 40% labor cost. Then you would have budgetted about $16,000 a year in labor to produce $40,000 in revenue. Assuming your average employee is $40,000 annually then you would have to lose between 2-3 employes to cover that.

\"The budget should be balanced; the treasury should be refilled; public debt should be reduced; and the arrogance of public officials should be controlled.\" -Cicero. 106-43 B.C.

freddy

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#16 : August 18, 2011, 06:06:16 AM

What's your current Labor cost %?

What's your projected Labor cost %?

Are employees salary or hourly?

Is $150,000 a salary or profit?

Can you cross train an employee to replace a contracted consultant, if any?

What's your labor productivity compared to similar businesses?

Is letting only 1 employee go going to be enough. Manufacturering is a little more labor intensive then some industries, so let's assume you operate with a 40% labor cost. Then you would have budgetted about $16,000 a year in labor to produce $40,000 in revenue. Assuming your average employee is $40,000 annually then you would have to lose between 2-3 employes to cover that.

All very valid questions of course, and if this was a real example those are things that would have to be considered. But the gist of this question was, do you let an employee go (general labor, no special skill) or do you take a huge personal pay cut first? In another thread, OBD tried to say that in his company they have honesty and integrity thus they don't let people go. Instead (he implies he was ownership but I doubt it) ownership took personal reductions or they all suffered together.  My guess is more like he is a low ranking union member that agreed to pay reductions but then we are now talking a whole different ballgame.

John, I must have misunderstood what you were trying to say but I still don't like the idea of asking the employees though, but I guess that's just me. If I was any sort of decent supervisor, I should already know that Jack "doesn't pull his weight.....and causes us to clean up his sloppy work". The main reason I say that, in the nearly 20 years that I have had people working for me, at least at one point most everyone of them stretches the truth just a little to protect themselves. Especially in an economy like this it can get very cut throat. If the employees think they may lose their job, the truth can be the first victim. So I would make the decision probably with some supervisor inputs (unless they are on the block) but I think it's squarely my job and responsibility.

kevabuc

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#17 : August 18, 2011, 10:12:17 AM

What does honesty and integrity have to do with not letting an employee go? As an owner, if my business suffers a loss I am the first person to take a pay cut, whether I want to or not. It just happens when I complete the P&L and I look at the cash flow.
Where' s the honesty and integrity in continuing to operate at a loss if it jeopardizes the entire company, it just puts of the inevitable for a short time and it doesn't do anyone any favors in the long run.


\"The budget should be balanced; the treasury should be refilled; public debt should be reduced; and the arrogance of public officials should be controlled.\" -Cicero. 106-43 B.C.

freddy

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#18 : August 18, 2011, 11:40:52 AM

Where' s the honesty and integrity in continuing to operate at a loss if it jeopardizes the entire company, it just puts of the inevitable for a short time and it doesn't do anyone any favors in the long run.

My point exactly and very well said. Thank you.

spartan

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#19 : August 18, 2011, 12:08:01 PM


All very valid questions of course, and if this was a real example those are things that would have to be considered. But the gist of this question was, do you let an employee go (general labor, no special skill) or do you take a huge personal pay cut first? In another thread, OBD tried to say that in his company they have honesty and integrity thus they don't let people go. Instead (he implies he was ownership but I doubt it) ownership took personal reductions or they all suffered together.  My guess is more like he is a low ranking union member that agreed to pay reductions but then we are now talking a whole different ballgame.


I do not know OBD personally, but I have known him on this board for a long time. During that time has maintained he runs his own business. A plumbing business if I recall. Just statin'

freddy

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#20 : August 18, 2011, 12:56:39 PM


All very valid questions of course, and if this was a real example those are things that would have to be considered. But the gist of this question was, do you let an employee go (general labor, no special skill) or do you take a huge personal pay cut first? In another thread, OBD tried to say that in his company they have honesty and integrity thus they don't let people go. Instead (he implies he was ownership but I doubt it) ownership took personal reductions or they all suffered together.  My guess is more like he is a low ranking union member that agreed to pay reductions but then we are now talking a whole different ballgame.


I do not know OBD personally, but I have known him on this board for a long time. During that time has maintained he runs his own business. A plumbing business if I recall. Just statin'

Cool OBD the plumber, but that does not entitle him to make the comments he did. His comments (A company with honest and integrity does not let employees go) were still dead wrong as proven by many in this thread.

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#21 : August 18, 2011, 01:32:39 PM

Instead (he implies he was ownership but I doubt it) ownership took personal reductions or they all suffered together.  My guess is more like he is a low ranking union member that agreed to pay reductions but then we are now talking a whole different ballgame.


This was the ONLY thing I was commenting on. Trying to be informative only.

freddy

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#22 : August 18, 2011, 02:08:41 PM

Instead (he implies he was ownership but I doubt it) ownership took personal reductions or they all suffered together.  My guess is more like he is a low ranking union member that agreed to pay reductions but then we are now talking a whole different ballgame.


This was the ONLY thing I was commenting on. Trying to be informative only.

Thats cool, no worries

John Galt?

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#23 : August 18, 2011, 02:25:43 PM

What's your current Labor cost %?

What's your projected Labor cost %?

Are employees salary or hourly?

Is $150,000 a salary or profit?

Can you cross train an employee to replace a contracted consultant, if any?

What's your labor productivity compared to similar businesses?

Is letting only 1 employee go going to be enough. Manufacturering is a little more labor intensive then some industries, so let's assume you operate with a 40% labor cost. Then you would have budgetted about $16,000 a year in labor to produce $40,000 in revenue. Assuming your average employee is $40,000 annually then you would have to lose between 2-3 employes to cover that.

All very valid questions of course, and if this was a real example those are things that would have to be considered. But the gist of this question was, do you let an employee go (general labor, no special skill) or do you take a huge personal pay cut first? In another thread, OBD tried to say that in his company they have honesty and integrity thus they don't let people go. Instead (he implies he was ownership but I doubt it) ownership took personal reductions or they all suffered together.  My guess is more like he is a low ranking union member that agreed to pay reductions but then we are now talking a whole different ballgame.

John, I must have misunderstood what you were trying to say but I still don't like the idea of asking the employees though, but I guess that's just me. If I was any sort of decent supervisor, I should already know that Jack "doesn't pull his weight.....and causes us to clean up his sloppy work". The main reason I say that, in the nearly 20 years that I have had people working for me, at least at one point most everyone of them stretches the truth just a little to protect themselves. Especially in an economy like this it can get very cut throat. If the employees think they may lose their job, the truth can be the first victim. So I would make the decision probably with some supervisor inputs (unless they are on the block) but I think it's squarely my job and responsibility.


Okay, supervisor inputs then. I'd still allow the employees some input. You don't have to take it. It is more of a morale thing. If they think they have some input, and that you-the owner is attentive to their ideas, they feel better about their job and less resentful when the axe does fall.

As far as cutting a job or taking a pay cut. What I look at is "who's fault is the slow down?" If it is a pure manufacturing firm with little control over the sales channel (i.e. little to no sales force), then slow downs are hard to control, so you have to let people go. But if it is a firm where you control your sales and marketing, then the slow down is ownership/managements fault regardless of the economy and I would be far less likely fire someone because I didn't market-plan for the economic conditions.


freddy

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#24 : August 18, 2011, 04:19:37 PM

I'll meet you half way...I can accept asking the employess a general question "What can we do you reduce costs" and I could even ask for a volunteer. But I would never ask employees to tell me which employee should go. Too many bad things from that. How would most people react if somehow they found out somone voted for them to get fired. Nah, don't want the employees that remain to turn on each other.

SpeedyClaxton

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#25 : August 18, 2011, 06:04:08 PM

Hire a Mexican and pay him $20 a day.

We shut down \\\\\\\" The Vet\\\\\\\" and we opened up Lincoln Financial with a bang!!!!
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