Global Economic Slowdown - Impact on You?

navexpert

Hi,
How does the global economic slowdown affect you and the company you are working for?

Yesterday I was informed that it is not going well for the company I am working for and that they are delaying some of the payouts for the employees until next year!!! ](*,)
There will be a lot of people leaving the company that is for sure!!!

This was a big shock to me (didn't even know it was legal) and I guess now it is time for me to look for a new job, this s*cks since I have been with the company for many years and I am always on a utilization above 100% and happy clients.

The managers claim that our competitors are doing the same. What is your company doing to survive?

PS. Anybody looking for experience NAV consultant/developer in US? [-o<

DenSter

If it's just a utilization bonus that will be delayed I would probably not leave right away. If you work for who (which would mean I am familiar with your utilization program) I think you work for it really does suck, because the utilization component is such a large part of your income.

It is happening everywhere. It never hurts to look around and see what is available, but I'd caution against leaving just because of bonus payouts are going to be late.

To answer your concern about whether it is legal... most employment is 'at will', so they can basically do whatever they feel like. Unless you have a contract that spells out the system, with payment guarantees you're screwed. I wouldn't take legal action about that anyway, not good for the relationship. Just be happy they came out and said they are not able to make the payments. Where I used to work they changed the system, everyone was going to have to work even harder to get to the same level, and they spunit to make it look as if that was a good thing for us.

navexpert

Thanks for your reply DenSter,
Yes, it is the utilization bonus, in my case it is 30-40% of my salary.

DenSter

Ouch, that hurts ](*,) I know how you feel though, it was one of the important reasons for me to leave my job.

kriki

What is an "utilization bonus"? I never heard of it.

DenSter

Simply put, your utilization is the ratio of your work time that is billable. Say you work 40 hours a week. If you bill 40 hours to customers, your utilization is 100%. If you bill 44 hours, your utilization is 110%. Some companies have a system where if our utilization is more than a certain percentage, you get a bonus based on your utilization number.

kine

Or somewhere you have some percentage from each "utilized" hour + fixed part of salary.

Alex_Chow

What is the typical pay at Tectura (I'm assuming that's the company you guys are talking about, not much global VAR out there) with 100% utilization rate?

DenSter

I don't know if we're all talking about that particular company, I can only speak from my own experience. I'd say with 100% utilization, that component was about 20% of my income. Not getting my utilization check would have been in effect a severe paycut.

kine

In our system 100% utilization can be more than 50% of salary... in this case it is much worse...

DenSter

Yes for you it would be terrible. It depends on how companies look at the utilization component whether they will change it though.

If the utilization component is considered to be part of your base pay, then your company would think very seriously before changing the system. You probably also have it in writing. If it is considered a "bonus", "something extra", even though it is such a high percentage of your income, and there is no contract about it, then it can be changed without notice.

Alex_Chow

In my old job, we're paid based on our billable hours. And that would constitute about 70% to 80% of our pay. So having that taken away will be unthinkable...

DenSter

In my current job, billable hours is 100% of my income

jorgebraga

Thats not a job!! You are a company working for a company!!! Are you responsible for getting customers?

Alex_Chow

jorgebraga wrote:

Thats not a job!! You are a company working for a company!!! Are you responsible for getting customers?

He's kidding. He has his own company.

DenSter

jorgebraga wrote:

Thats not a job!!

Not a job... that's funny, I am working twice as hard as I've ever worked that's for sure

navexpert

DenSter wrote:

Yes for you it would be terrible. It depends on how companies look at the utilization component whether they will change it though.

If the utilization component is considered to be part of your base pay, then your company would think very seriously before changing the system. You probably also have it in writing. If it is considered a "bonus", "something extra", even though it is such a high percentage of your income, and there is no contract about it, then it can be changed without notice.

In my case it is definitely part of the base pay and not just ‘something extra’, that is why our fixed part of the salary is a lot less than at other places.

Now they have also started laying off people! Talk about meltdown.

Nobody else is experiencing the same thing?

jorgebraga

Not a job... that's funny, I am working twice as hard as I've ever worked that's for sure

Didnt mean to insult you! What i mean is that there is a groing social dumping when it comes to jobs (as in receving a salary for your work!). The feeling i have is that companies are just dumping salarys and catching whoever awnsers the call not regarding quality. From what you guys are saying theres less and less protection for those that work, specially if billing hours comes as a part of your salary. For instance if a comercial guy does a bad deal selling NAV Services you'll pay for it on your salary (not your fault, but you'll pay for it) because you will not have billable hours?! In my view companies should absorv the costs of hiring bad workers (and not the remaining workers) , otherwise we are all just companies and not workers.

If all workers of a company receive based on billable hours, what kind of risk do the owenrs of the company have?! Just the capital risk? What about bad management? Because your boss is a morone when it comes to management you should get less money because billable hours are not available?!? Very very dangerous social dumping!

Alex_Chow

Yep, I completely agree with you. I've been an recepient of unbillable hours based on bad management at my old job.

However, on the flip side, NAV resources aren't exactly cheap. And the quality of the work produced is hard to measure in the initial months.

DenSter

jorgebraga wrote:

Didnt mean to insult you!

I know you didn't, don't worry about it when I reply with a that means I'm not taking it badly

Savatage

I wanted to go to Amsterdam but the dollars in the toilet

DenSter

So going back to the original question. I would also like to hear about what other NAV partners are doing, if they are affected by today's economy, and if they are indeed cutting back on bonus/incentive payouts.

To me it sounds like the DUMBEST thing to do to cut cost is to take away people's money, money that they have already worked hard for.

By the way, "navexpert", there is a LOT of speculation going around about who you are

kine

I do not know any impacts to us there, only some customers are rethinking their implementations...

Alex_Chow

kine wrote:

I do not know any impacts to us there, only some customers are rethinking their implementations...

That sums it up for us too.

ssingla

I have been associated with OEM manufacturers in auto industries for the last couple of years. I built my company on them and now most of them are facing shutdowns and sluggish sales. Couple of prospective client's unit are so badly hit that they are unable to repay loans to the banks. I forsee no work after 1st April (when current assignment ends). ](*,) This is the worst time I have seen in my life. ](*,)
I am thinking to diversify our bussiness. The first option seems to be system audit. My professional qualification and experience in audit and system implementation can help.
Looking for some expert's view on the same.

Alex_Chow

You may want to ask the people who are still living how they got through the Great Depression in the 20s.

David_Singleton

ssingla wrote:

I have been associated with OEM manufacturers in auto industries for the last couple of years. I built my company on them and now most of them are facing shutdowns and sluggish sales. Couple of prospective client's unit are so badly hit that they are unable to repay loans to the banks. I forsee no work after 1st April (when current assignment ends). ](*,) This is the worst time I have seen in my life. ](*,)
I am thinking to diversify our bussiness. The first option seems to be system audit. My professional qualification and experience in audit and system implementation can help.
Looking for some expert's view on the same.

This surprises me somewhat. I would think that someone with your skills in the market you are in should have so much work that you can't keep up. I must admit I really do not know the Northern market that well, but down south you would be like gold.

bbrown

Another area I see becoming an issue is management of receivables. Many banks have severely tightened their commercial lending practices. Customer will no long have some of the commercial credit as the banks restrict available credit. Customers will begin looking for other sources. Delaying payment of vendor invoices will be on area that they leverage. They will basically begin treating their vendors as their own line of credit. Service providers will need to be aware and possibly tighten collection practices. Or they may find themselves with lots of work but no actual money for their services.

ssingla

David Singleton wrote:

This surprises me somewhat. I would think that someone with your skills in the market you are in should have so much work that you can't keep up. I must admit I really do not know the Northern market that well, but down south you would be like gold.

Sad but true . Working alone I can generate enough bussiness to keep myself busy but with my team, I am finding difficult to find enough bussines for keeping them occupied. Nevertheless hope is still alive .
The real problem is that companies have frezzed Capex and are holding as much cash as they can. With no signs of improvement in conditions atleast in the short run the next financial year will be tough.

Miklos_Hollender

This utilization bonus sounds kinda strange to me, though I had it too at my first job, but never understood it. Salespeople are the ones who get in the tasks, project managers are the ones who distribute it, consultants / developers simply do whatever tasks are coming from salespeople and project managers. So utilization is never dependant on consultants / developers, it does not make much sense as an incentive.

OTOH it makes sense to pay everybody less when there is less sales coming, so if you see it as a cost-control measure and not as an incentive then it makes sense.

kine

It have meaning - when you sell something e.g. as 2 days of work, and the developer with consultant do it in 1 day, they have utilization 2 days, not one, and the second day they have free for another work... ;-) They are motivated to do the job quicker than what was sold.