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I froze the salaries of my executive team to benefit other workers (theguardian.com)
480 points by otikik on May 16, 2019 | hide | past | favorite | 313 comments



I think it's great that this company did this, but this article is a puff piece. There's no real data here. He just states that the `business tripled`. What does that actually mean? Did it triple in revenue? How did increasing the entry-level pay result in that? And how did your non-entry level employees handle the lowest wrung earning far closer to their own pay? How many executives decided that the freeze wasn't in their own best interest and left? You can't just sacrifice and redistribute and expect it to be all roses. The details matter, especially if you're trying to convince resistant minds that it's a good thing.


It's a newspaper article, the aim is to raise awareness. People should read this and wonder if/how it applies to their company.

It's easy to forget how the lowest-paid in a company are often key people in having operations run smoothly. If they have trouble paying their bills, often on sick-leave, etc, it can have an impact on everyone else (causing delays, quality issues or security issues). Ideally, you invest in fixing both the technical and the underlying social issues.


With something this important, I'd expect something more substantial than the equivalent of "I stayed on this diet for a year and it worked! I shrunk by 1/3rd!"


Puff piece or not I don't get what you want from him? Scans of their IRS taxes? It's an article to show what they did, not a step by step manual, will every single detail. Now if he lied, he'd be called on it


How about something a little bit more than "it worked" and "business tripled". An analysis of contributing factors, maybe. There's so much bullshit in the media with people claiming things that are half-truths, or outright lies. It'd be nice for something like this to have some actual justification to support it. Warts and all.


If you take this at face value, those top 20 execs must have been extremely highly paid if freezing their wages allowed this to happen. (As math done by others shows - giving 25 people a 15K raise is ~350k. That means those top people were expecting raises of that much. Implies a crazy base)

I suspect there is more to the story. Either the raises paid for themselves via lower attrition, or perhaps came with added productivity. If you look up the company on Glassdoor, there is a lot of negativity towards management.


I don't understand something from this article:

"Our margins had declined and our revenue growth had stalled. ... I was becoming increasingly worried about our team and our turnover numbers. We are a people business and in some divisions we were losing 30 to 40% of our teammates within a year.

My HR staff suggested that we re-think our recruiting and training – which made sense – but I thought that we could do more. I thought we needed to reconsider how we supported and paid our team. For our entry level jobs – where turnover was the highest – we paid the federal minimum wage of $7.25 an hour (or less than $16,000 per year).

...

I took my concerns to my team. After many tough conversations, it became clear that we could not simply raise wages and hit our budget."

This just doesn't make any sense whatsoever. Recruiting and especially training has a very real cost for non-trivial jobs. Why would they pay minimum wage when they seem to be acknowledging that not paying minimum wage would increase their profits? This is something companies learned in the early 20th century. Henry Ford was the first employer to institute a higher minimum wage for his employees (doubling the average pay of the time). He didn't do it because he was a nice guy, he did it because he found that increasing the minimum wage reduced turnover which meant less spent on training and a general increase in productivity and profits. The same reason he would also go on to standardize what we now consider the normal 8 hour work day / 40 hour work week.

This seems very much like a story of a very poorly managed company. A minimum wage is appropriate when it's appropriate. When you're losing 30-40% of your employees, likely in meaningful part due to wage, and it's costing substantial amounts to replace and retrain for their roles - it's not appropriate. It seriously seems like at times that MBAs should be relabeled to masters of business annihilation because that's invariably where these incredibly myopic views on labor:costs:revenue seem to come from.

---

edit: confirmed. Here [1] is their board. And indeed it's just an MBA pack.

[1] - https://www.carecentrix.com/about-us


I used to work for some of those guys (very indirectly) when they used to work at Medco as senior execs making millions. They are smart guys that don't need $$$ at this point. In their defense, operations/call center leaders are very metrics and cost-driven at most companies. 50% annual attrition rate is business as usual. Driving down call volume, average handle time, and increasing first-call-resolution are name of the games. Call centers are viewed only as cost center at most companies. This trend has been changing in the past few years, so I'm glad they are also in the right side of the fence.



What a find! There are a lot of jobs that are complete bullshit, especially in finance and tech. That hot new app or device isn't a necessity, its decoration. Things got done before slack existed, so why are some brilliant people wasting their time and life working tirelessly to optimize slack? People might get promoted and pat themselves on the back for reworking some aspect of the snapchat back end, for instance, but are you gonna put that accomplishment on your tombstone? Will your project ever come up in university CS lectures, or even see the light of day to be cited by other researchers? The iPhone Xs doesn't do anything fundamentally different than the first iPhone, and people buy new ones every year to do the same emailing, texting and calling, and web surfing they've always done since their first smartphone. There are people who are striving daily to make missiles more lethal, advertising more addictive, consumption more rampant, the environment more polluted, and shareholder profit more exponential.

A lack of fulfillment in the majority of straight out of undergrad private sector career paths is what got me interested in grad school, to spend my time and effort working on a topic that's explicitly not bullshit.


> last year we broadened profit sharing to all levels of the company

So... do executives think this means something to people? This incentive seems comically out-of-touch. I guess because CEOs live and breathe stock valuation-based bonuses they naturally assume that everyone gets motivated the same way. But it seems like a stretch that strains credulity to think that someone making $15/hr and getting a microscopic slice of revenue would develop a sense of motivation from the fact that their personal call-center interactions might maybe increase their share of revenue by a few pennies a week through slightly happier customers.


I really hate articles like this. The company provides home health visits, requiring a nurse. Nurses don't work for $7.50 hour. Reading closely, it was for entry-level positions, probably in a certain department. Skilled positions would require market rates.

Translation: in an economic down turn they killed the bonus, raised the pay for customer service reps, and are now claiming a moral victory as if the growth was caused by paying people more.


This seems like the equivalent of a man walking up to a homeless person, kneeling and handing the man $5 while his wife takes a picture of the action... Oh! You have an ounce of humanity left in your slowly freezing heart, you want a cookie jackass? Had the top 5% cut their salaries in half and disbursed it equally to the bottom 5% then I might have been impressed but anything short of that and you aren't going to get me to bat an eye.


And this is exactly how wage rises should work: business-driven decision without any government intervention. Good job.


That's called being an startup, any other news?


me thinks the shitty 7.25 an hour is to blame.




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