Archive for the ‘Profit’ Category

Reducing Payroll Costs Closer to Home

April 25, 2009

I have been slowly following a series of cost reductions that seem to touch a lot of people I know (yes myself included). We have all heard the stories on the news about automotive workers, home builders, and financial industry types losing jobs and not having anywhere to go. These seem so distant though (despite my brother-in-law being laid off from GM and my sister-in-law, his wife, being laid off from Expedia). Yeah there are some home builders here putting people out of work, there was WaMu, there is Russell. We don’t have much in the way of auto workers around here though. We’ve got a fair amount of airplane and boat makers instead that seem to be less impacted. We clearly aren’t as bad off as other areas hit harder by the declines in these sectors.  Michigan has the highest unemployment rate at 12.6%, which is drastically different than Seattle’s unemployment rate of 8.7% (ranking it 191st on the list of major metropolitan areas). So what are the entities around here doing to reduce their costs if they aren’t closing up shop or laying off people? Surely the value of goods here in Seattle can’t be higher than the value of the goods elsewhere.

Organizations around here do seem to be reducing their costs. My friend Nathan has some great advice on reducing costs of running your business and the importance of cash flow. Other organizations out there (companies, nonprofits, government agencies) are all showing an interest in preserving cash too. Besides the great ideas for reducing operating costs that Nathan has, there are the payroll costs that usually take up a bulk of the costs. Obviously the fastest method to reduce the cost on people was to get rid of the dead weight these organizations were  carrying around for unnessessary projects or simply in an inneffective workforce. These are the numbers that we track on a grand scale. This is also what we hear the most of… “My friend lost their job”. The Bureau of Labor Statistics (BLS) is the agency that tracks these numbers. Their report for Washington State has things like, construction jobs being down 12.4%, Education and Health Services, Other Services, and Government as having an increase in jobs (1.3%, .3%, & 1.2% respectively), and a total of only a 4% drop in the last twelve months…

What do all these rises and drops in wages mean to the value of the goods we are buying and selling? Looking further at the data, the rise in the average hourly wage at a national level is roughly $5 over the last 10 years, that’s $.50/year. With an average hourly wage of $13.27 in January of 1999 and $18.43 in January of 2009. This doesn’t even include the rest of the real cost of hiring employees. Clearly we as employees cost more money these days (even if the output we are making is worth less due to decreased demand). The result? A paycut…. Of course!

The average paycut seems to be 5-10% (reflecting that on the hourly wages, 5% of $18.43, puts us back at the hourly wages of August 2007 – 10% puts back to the hourly wages of March 2006). With these kinds of cuts should we be looking to value our assets at these levels? The stock Market is much lower than the ’06 levels, the current value of the Dow is at 1998 levels. Should we be looking at wages from these levels? I sure hope not, that’s more of a 25% paycut…

So if we aren’t going to lay off a bunch of people, but we need to make our companies operate at the levels of 2006 and 2007, and perhaps even 1998. There needs to be methods for doing so, paycuts, benefit reductions, and furloughs seem to be popular choices. A few that I have heard about recently are summarized below. What about you? Are you an employee or a business owner? Are you part of a cost reduction? If you are an entrepreneur – are you paying yourself less?

Some non-layoff measures I’ve heard of lately (local and not so local):

Paycuts:

EMC Corporation – 5% accross the board for 2009, perhaps re-instated in 2010, then again maybe not. Executive staff took a previous paycut.

Siemens Business Services – Managers & directors took a paycut

Denali Advanced Integration – 5-20% paycut depending on level and margin contribution. Raises and bonuses frozen.

Microsoft – lowering the amount they are paying vendors by 10%, removing cost of living adjustments this year.

401(k) reductions:

EMC Corporation – no 401k matching

Chase (wamu) – no 401k matching

Furloughs:

Siemens Business Services – 5 days mandatory

USBank – US Bank’s furloughs were voluntary.

King County – 10 mandatory days (everyone takes them at the same time), Cost of Living Adjustments still happening (so more base pay, plus a few days off w/o pay)

Planned Parenthood – 5  mandatory days (take them at your convenience)

Add more in the comments or email and I’ll add them to the list…

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Life: Stock Market Games – Day 3

October 24, 2007

Well even if my own portfolio was completely in the hole today – at least Quentin’s in-game portfolio went up the most!! That’s three days, and all three of us have had our turn earning the most money!! Granted, Quentin was only up $11.16…. but that beats my measely $4 and Gabes $93 loss! Hopefully the fact that Gabe’s still over $10k will keep him encouraged to continue playing….

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Perhaps getting into Seattle’s new version of the hotel industry would be more profitable?

Top Ten Reasons you should not Blog

August 14, 2006

10. It’s time consuming – Kind of like watching TV, it wastes valuable time. You could be creating real content, spending time with your kids, your wife (no, reading her blog does not count as spending time together), or enjoy spending time off the grid daily instead of between jobs…

9. The blogosphere is already overloaded – Yes that’s right, there are lots of good bloggers out there, in fact at this point my humble technorati ranking is at the bottom of the list along with thousands of others (yes past the 1m rank). So why would you start or continue blogging at this point? The content has already been covered by the press and at least five other bloggers, would your comments on their blogs be sufficient?

8. It’s not journalism – So don’t pretend it is…..

7. There are too many rules – Yes rules…. even though it’s the journalistic outlet of the new web 2.0 era where everything converges in an underfined mashup of entreprenureal creativity…… there are rules about how to be a good blogger, how to not piss off the best bloggers, how to be a corporate blogger, how to get good technorati rankings, how to get A-list bloggers to link to you, and how to write lists……. There are even books on the subject :)

6. You don’t want to become another victim – yes many bloggers get victimized and bullied by the community. It’s probably one of the saddest things I have seen when a group of bloggers who most likely were beat up in middle school throw their A-list blogs around at people’s opinions….. because they can (see number seven – don’t piss off the A-list bloggers is one of the important rules)

5. There are no good platforms – ?? what Live Writer, typepad, radio, wordpress, blogger, community server, blah, blah, blah…… yep they all suck to some degree…. I have started and killed about ten different blogs because I didn’t like something about the platform, uploading pictures sucks in wordpress…. btw, this is a good thing, it will help encourage improvements like this and this.

4. It’s not profitable – yeah everyone thinks they are going to write a great blog, be an A-list kind of blogger, put up some adds and get some revenue. Or maybe they’ll have some people refer to their blog as their resume and get the next big job or find the next great partner…. or maybe they’ll just rent their chest and clear $10k…… um, good luck the long tail theory doesn’t work here – you have to be an A-list blogger first…. Guy isn’t even in the top 20!!

3. Your blogosphere colleagues won’t explain their jokes – um yeah – Jeff Jarvis, Mike Arrington, Robert Scoble, and Dave Winer….. quite posting inside jokes – they are crowding up my rss reader and it’s annoying :P

2. Why write your own, you could just claim the number one blog and be done
1. There are better things to do with your life……

10. Learn how to Get Things Done

9. Learn how to Draw

8. Learn to make Wine
7. Go Fly A Kite

6. Go Surf (even if it’s cold)
5. Learn to Dive (even if it’s cold)

4. Go get in a boat (even if it’s cold)

3. Use all of your vacation….. and some of your sick time

2. Use the 1m lines of text in a book…. or a new OS…..

1. Start a videoblog :)

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