[Closed] Asking staff to take a pay cut

You can ask, but I doubt you will get away with a straight out cut.

You might get away with saying there will be no pay rises for x years to bring you in line with Leeds wages?

Stick where you are - staff are temporary and will probably leave as soon as you move! A premises move is a big undertaking. And would you lose business moving to Leeds (as Harrogate has a prestige image)?

And a pay cut would negate any advantage to the staff of moving to Leeds.

Sounds like the tail is wagging the dog a bit.

Surely you could move nearer Leeds but not in the centre? Hardly anyone lives in the centre so people would still have to travel. You'd get issues about parking provision too - believe me if you don't provide the same amount of parking you do now they'll be mutiny.

I would just say to them, yes we've considered it but as rents are so much higher it would restrict our financial position to give pay rises in the future and you would find it expensive to park etc..

There is no way that earning less money has entered into their equations when asking if you can move the business to Leeds. The reponse would certainly be interesting!

It's their responsibility to get to work, if they find the commute too much then they can find a job in Leeds.

All the above. 😀

^^^ This.

Also nobody likes the sound of 'pay cut' unless your company is in serious financial problem.

If I were your employee I would prefer money over relocation to get pay cut.

If it ain't broken why fix it?

Could you not buy a helicopter? You could pick them all off and drop them off. They get a short commute, you get to fly around in a helicopter

Blue sky thinking 😀

i employ folks on a day rate. and was asked by them for a rise.. fair enough hadnt had one for 3 years so they got an extra tenner a day. quite a stiff rise and when one then said he wanted his bus fares to and from site or even picking up from and dropping off after work i said he could have one or the other. he opted for the pick/up drop off and 6 months later moved another
7 miles away making it a 25 minute each way trip so i said sack this heres the tenner make your own way to work.. he only rarely gets the call now.. we re all in it together or not at all. your enployees knew where you were based when they signed up.. let them suck it up the more you run around after them the more they ll expect it. they could move closer or like my lad move even further away they might even move to harrogate as its much nicer living there than L666ds

I like the fact I have a 20 mile each way commute.

Some interesting responses and I agree Harrogate does have a status image, but we are in the digital industry and Leeds has a very established digital scene (so we would probably find it easier to recruit if anyone left anyway). Also we don't have parking now and most people commute by train.

I like the sound of a helicopter. Perhaps we suggest they take 50% pay cuts and we might just be able to finance a trip or two in one.

Somewhere like Otley instead?

we are in the digital industry

What are they coming into an office for, then? Is working from home not an option? If you're "in the digital industry" and employ six people there's an obvious way you could start saving 100% on the rent.

Would you need to be in the centre of Leeds if you moved?

Find somewhere out of the centre with lesser rates. If I look out of the window I can see loads of empty office space, no idea how much rent is though.

Blue sky thinking

It's Leeds though.

Grey sky thinking.

Horsforth or Headingley if they're traveling by train, must be cheaper than Harrogate or central Leeds?

I suggest you have a meeting where you read your original post out, and see what they say! 😉

I'm aware that when my business has to move to larger premises we'll have to move out of town to get the space (we make big things so we need a lot of space compared to the number of staff) so I'll have to consider extra pay to compensate for the commuting time & cost.

your enployees knew where you were based when they signed up..

This

What are they coming into an office for, then? Is working from home not an option?

And this.

As someone who lives in Leeds and works in Harrogate I'd happily take a pay cut of £176.60pcm as that's what the train costs (less if you buy a yearly season ticket, less if you are near the stations that are in Harrogate but aren't Harrogate, so hornbeam park or pannal, even starbeck)

Would 10k a year be enough to cover the cost of a move and increased rents? Would being in Leeds mean you were lost in a sea of other competitors rather than standing out in Harrogate?

Coincidentally I'm looking at helicopter rentals, and you could ship them all over from Leeds for about a grand a trip, but I'm sure they'd give you discount rates...

you'd have to pay me more to work in Leeds - geez what a hole

It's [s]Leeds[/s] Oop North though.

Grey sky thinking, where it's permanently grim. (Or so we're told in the Mystic East).

Or bring an office move to Leeds into your planning, something to 'aspire' to, factoring in a requirement for increased revenue? It's then a goal everyone can enjoy working towards and attaining?

12 months ago we made the decision to put some of our team into 700sqft office central Leeds, the option of working here has made recruitment easier.

Move to Sheffield and give Mrs PP a job! She was doing the jobs of about 6 people anyway, so you could save a ton of cash!

Seriously though, if anyone knows of any business analyst, PA or general organisational jobs going in Sheffield, please let me know. She's brilliant. Honest. 🙂

Lots of reasons people won't take a pay cut, even if it means they will be better off overall. One reason is matching/increasing salary when looking for the next job.

If you could offset the cost of the office move by working out how much your staff spend getting to Harrogate and cutting their wage by that much it might work. I'd take a grand pay cut to have a walk to work (currently spend that a year on a season ticket to get into Leeds on the train).

And if you lose staff during a move to Leeds then theres a MUCH bigger resource pool in Leeds and the surrounding areas.

Is it realistic to ask people to take a pay cut in order to make it affordable (given that they will have significantly reduced travel costs and times and they are currently getting a bit over what they would expect to get in Leeds anyway)?

Will you be paying more or less than your competitors after the pay cut?

People wont care about the fact they used to have to commute to Harrogate, they will just look at the fact that you are either paying more or less than the competitor 2 doors down.

Seeing as though your employees are all north Leeds based, why not get some where nearer to Leeds?

I work in Harrogate, and we have to pay retentions to staff to keep them from the bright lights of Leeds. It works for a while, but they always end up leaving.

Surely you set up business up based on cost, not on the whim of the staff?

Staff are not a fixed cost, rent is.

What are they coming into an office for, then? Is working from home not an option?

Will you be paying more or less than your competitors after the pay cut?

This is about as Millennial as it gets - take job in one location, get paid higher than average, lobby employer to relocate with expectation of keeping job and money while lowering personal costs.

Madness..!

Good luck johndoh - I think I'd be a bit more old school* in my business planning..!

*That's why I'm a corporate drone employing other corporate drones....

This is about as Millennial as it gets

Tbh Leeds to Harrogate is not a huge commute anyway, unless of course they're south of the river

I commute Baildon to Ripon & back, it's not a bad commute. Better than Baildon to Barnsley anyway , which was my previous job

If you move to Leeds, a member of staff leaves, you advertise and the best candidate lives in Harrogate, will you pay them more? If you did, how do you think the other staff will take that?

Tell them to get on their bikes!!

Where do you live, OP? Harrogate or Leeds?

I live in Harrogate so I would have to start commuting. My business partner lives in Otley so he would have a similar commute to what he does now.

They are saving commuting costs and also gaining more free time, so better quality of life, so an adjustment in pay is completely feasible.

Just work out by what percentages the wage bill would have to come down to cover the increased rental and see if that amount equates somewhat to commute costs, and if it does then tell them that is what is going to happen. They won't be losing any actual money, although if you contribute to their pensions you might have to up the percentage a small amount to compensate.

I applaud you. A successful business owner that cares about your staff welfare.

I would stick where you are as they knew the location when they signed up. You obviously listen to your staff so I'm sure you will continue to be successful and grow. With your approach I'm sure if anyone leaves, you won't have a problem attracting new talent.

What is tour gross margin? What % of your cost and revenues are accounted for by (1) rent and (2) staff costs?
How unique are skills of current staff?
As coughs said, do you need an office or could they work remotely
What do you want? It's you company and your capital invested and you are the risk taker

As others have hinted if you want to keep them happy but not relocate (a business hassle and means you have a commute) then allow working from home a few days per week.

Does seem a strange situation, was it just coincidence all your staff live in Leeds or did you relocate from there in the past? Also, as has been asked, why would you need to be in the centre of Leeds? I would have thought there would be plenty of office space available in out of town business parks (that usually have good transport links and decent parking).

As to whether I'd accept a pay cut, it would depend if I'd end up financially worse off or not. If I broke even then I'd happily say yes as it would give me personal time back but I wouldn't really want to be worse off in terms of income (regardless of what figure you could put on personal time).

I don't think in your situation it's unreasonable to ask, could even put it to a vote with only 6 employees. Also, if you had 1 or 2 No voters and they eventually left over it (following relocation) would they be easy to replace?

My team of 6 are currently trialling working from home for 2 or 3 days a week (some of our work needs to be done in the office due to security constraints) and one of them has worked out that he'll be better off by approx £150 a month and saving between 2 & 3 hours travelling a day, so that's the equivalent of a pretty hefty pay rise for him.

Perhaps you should encourage a bit more home working? It may require setting down a few boundaries or targets depending on how much you trust your staff but if they can see the virtual pay benefits like Mark has then why not try it?

I guess you need to consider if you can grow your business with a move. Shouldn't just be to make staff happy. Although it is important you keep your staff. No staff, no business.

Or offer flexible working arrnagements.

Does seem a strange situation, was it just coincidence all your staff live in Leeds or did you relocate from there in the past?

Thank you for all these genuinely helpful comments – for once there seems to be no-one out to shoot an OP down in flames and it is all giving me plenty of food for thought. Thank you, I love you all 🙂

If you do move to Leeds, you can give me a job as thanks....

johndoh - Member
We do have a remote working option (one member of staff lives in London) and we allow working from home/flexible working but we encourage a 'default' of being in the office.

(Deliberately provocative question...) Why is your default 'being in the office'? What does your business or the staff gain by they being there?

I work for one of the big 5 IT consultancies and we have staff all over the country (and world actually). You can live wherever you like. Our default is 'be where you need to be to do the work'. I can be home, client site, one of our offices, in the park, it doesn't matter as long as I'm able to work with the people I need to work with, and deliver what I need to deliver.

I work for one of the big 5 IT consultancies and we have staff all over the country (and world actually). You can live wherever you like. Our default is 'be where you need to be to do the work'. I can be home, client site, one of our offices, in the park, it doesn't matter as long as I'm able to work with the people I need to work with, and deliver what I need to deliver.

As someone who worked from home for 10 years, you can't underestimate the value of colocating a team that needs to interact with each other on a daily basis.