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furloughs: volunteers and high salaries March 23, 2009

Posted by That Guy in Economic Downturn, Management, Observations, Seen Elsewhere.
Tags: , ,

The Wall Street Journal published a piece last week on the politics of volunteering for a furlough. I’ve written about furloughs a bit, as has the WordPress community, but in much of what’s written, employees are being forced to take the unpaid furloughs and their only choice — if any — is when.

Some companies apparently are making furloughs voluntary, and that’s all well and good. And in some cases, by taking a furlough you can make it abundantly clear to management just how important you are to the operation. Just be careful of the reverse:

“In this job market the last thing you want is for people to think they can do without you,” says Marie McIntyre, an organizational psychologist in Atlanta and author of “Secrets to Winning at Office Politics.” If you seem eager to take much time off “you may be viewed as expendable.”

One of the most difficult parts of reading articles about furloughs, though, isn’t the increasing number of them being required. It’s seeing the amount of money managers are losing:

University of New Mexico President David Schmidly sparked a controversy when he announced the voluntary program, which is set to begin in July. Numerous letters appeared in the campus newspaper protesting the program as unfair to average workers, and calling on senior administrators to shoulder more of the cutbacks. Mr. Schmidly himself plans to take 15 days off, forfeiting nearly 6% of his pay, or roughly $20,000, according to a university spokeswoman.

Let’s do a little simple math. If 20000=0.06x, then Mr. Schmidly makes about $333,000 a year. To someone who makes that much money, $20,000 isn’t very much. But to someone who makes $50,000 a year, six percent is $3000. Car payments for a year are often about $3600; mortgage payments are $1000 a month or more. We’ve all gone into debt during the boom years, and now it’s coming back to bite us as the recession settles in for the long haul. But what’s worse is that we’ve become accustomed to a certain type of lifestyle and are unwilling to give it up even if we lose a significant chunk of money due to furloughs.

The WSJ article warns employees to make sure their managers are taking furloughs too, and for the most part, you’ll find that they are. Here at CorporateSpeak, everyone from the CEO on down has taken a furlough week. But when the CEO makes more money in a month than you’ll make in a year, he or she won’t even notice. It’ll just be an extra week’s worth of vacation — one where the company cannot contact you by its own policies*, so you may find it even more relaxing than the usual kind.

My Big Boss took his furlough the same week as me — just a coincidence. He’s pulling down about a million a year. He’s not the kind of guy to flaunt his money or spend frivolously — he drives an early-2000s vehicle and his suits look about the same as the kind I might buy at the store — but he’s not going to miss his six percent loss nearly as much as I am. And that’s just one thing that frustrates people about furloughs: it’s not always about the money we lose, or the time we lose; it’s the money our bosses don’t.

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* That’s the policy at CorporateSpeak. Your mileage may vary.



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