Sunday, September 18, 2005

Negotiate a good staff deal - Fixed costs

This series is primarily for mid-career PJs, but new PJs can still use the information to streamline their career path and minimize hardship along the way.

Before we begin, let's all remember we do this job because it's our passion. We didn't choose this path for the pay (we were warned repeatedly about the miserable pay levels). With the obvious said, this post isn't about whining over how little we're paid, it's about getting enough to make us grumble smile instead of cry on payday.

People who like money should become bankers. Folks who must tell stories with their images become PJs. It's a rough road, but it's the path we chose. We get the bad with the good. However, it doesn't mean we need to live in poverty to support a newspaper. The paper needs our work to sell its product.

Critical factors
We've used the information provided in the "get a job" series and have some serious job offers. Most new PJs think salary is the bottom line, but it's only a starting point in job negotiations.

There are two critical factors all PJs absolutely must understand before they accept any jobs.

1) Every PJ expense can be written off by the corporation. Salary, bonuses and job-related expenses can be paid by the company. All these expenses can be deducted from their taxes - if they choose to do so.

2) All expenses not paid by the company are paid by the PJ and MUST be deducted from potential income. Although these expenses can later be deducted by the PJ, it only represents 1/3 of the actual expense after the IRS takes their share.

Consequently, a lower salary with higher benefits is actually better than a staff job with high-salary but no compensation. The whole package should dictate where talented, hard-working PJs go.

Dissatisfied staffers might want to stop reading now. If they already know they're getting ripped off, this will only throw them into fits of depression. I have a good deal, and it's still depressing to do the math.

Salary is considered a fixed cost to the business bean counters. It's a pre-determined amount based on newspaper circulation and the individual PJ's experience level.

Although some corporations pay higher salaries, the sum result often can be less than other corporations. The pay range seems relatively uniform once the cost of living in different communities is considered. The whole package ultimately determines the competitive edge of one corporation over another.

Each of the following is a separate negotiation point for job applicants. Experienced PJs with numerous awards can demand more concessions during negotiations while newer PJs may not get "standard" concessions as a stipulation of "conditional employment." This status should be renegotiated upon annual review or the PJ should take the experience and awards and move to another paper.

Fixed costs
These are predictable monthly amounts given directly to the PJ to offset the expenses of required tools. The combined monthly amount of allowances can vary from nominal token amounts to several hundred dollars.

During the initial round of negotiations, it's important to nail down these numbers. These numbers represent income the PJ won't lose by being employed. However, they do not represent financial income because PJs incur these expenses as part of the job requirements.

Do NOT allow any negotiator to include these numbers in salary negotiations. Salary (predictable income) is entirely separate from reimbursements (out-of-pocket expenses / potential loses).

Car allowance
It's understood a dependable vehicle is required in PJ work. Because of potential abuses, this tool is often not provided to PJs. However, many newspapers give staffers a monetary allowance for the use of their privately owned vehicle in addition to mileage.

In addition to the expenses involved in routine vehicle maintenance, some companies require vehicles to be fully insured rather than simply insured for liability. This insurance protects the company's equipment (and replacement insurance), but places additional insurance expenses on the staffer.

Some companies understand the substantial monthly investment and compensate PJs appropriately with an allowance. Other companies leave these expenses to the PJ. PJs must deduct these fixed expenses from the salary offer if no allowances are provided. Otherwise, they need to deduct the difference between actual expense and reimbursement.

For example:
  $275 - monthly auto expense (payment and maintenance only).
+ $125 - monthly insurance expense.
  $400 - total monthly cost for a required vehicle.
- $300 - monthly auto allowance.
  $100 - total monthly expense to deduct from salary ($1,200 annually).

Note: If a newspaper requires full coverage without any compensation. End negotiations. These companies only bring hardship for PJs.

Cell phone allowance
Although pagers are provided by almost all newspapers, cell phones can potentially be abused by staffers. To keep expenses down, many companies offer an allowance for this essential tool.

A normal phone allowance ranges from $50 to $75 per month and may vary according to a PJ's expertise, location and mission requirements (stand alone bureaus and cellular transmissions of images from Africa aren't abuse and must be compensated).

A cell phone costs about $600 per year at $50 per month. Again, this is an expense if it's not an allowance. Deduct the cost from the salary offer.

Professional membership fees
Membership fees to the National Press Photographers Association (NPPA) ($90 per year), the Society of Professional Journalists (SPJ) and other business-related organizations are covered by many companies. Again, it's a write off to the company and keeps staffers up-to-date and on the edge.

Recently, companies are trending not to pay these fees. It's sad for the profession and not productive for the newspapers. When the newspaper has a large number of members in these organizations, they tend to gain notoriety within the industry. This can easily be turned into increased circulation and profits for the company.

It makes business sense for the company to pay. Either way, it's important for staffers - particularly at a small staff - to be members of some professional organization. Consequently, if this isn't covered by the company, it's yet another expense to deduct from the salary offer.

Camera insurance
Once a PJ fills out their first camera insurance form, they know where all their money went. A typical PJ rig can run from $10K to $20K or more. This is a significant investment. It's also a favorite target of thieves.

Most companies provide insurance to replace the equipment if stolen. This requires an annual update of the equipment list, but ensures the serial numbers are recorded in several places if the equipment gets ripped off.

Because the insurance is very pricy, most companies opt for a high deductible (around $5K) and expense lesser losses. If the company doesn't provide this insurance, it's wise for PJs to get it from another source.

Average camera insurance will cost about $2 per month of each $100 insured. For a $10K rig, this cost is about $200 per month ($2,400 per year). Again, this is an expense PJs should deduct from the salary offer.

Check fixed pay
If a PJ earns $25K per year without any allowances, the PJ is actually earning $16,990 before taxes ($25k - $8,010 fixed expenses).

Next time, we'll discuss variable benefits.

Enough for now,

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