Tuesday, September 20, 2005

Negotiate a good staff deal - Variable costs

Variable expenses
Last time, we discussed fixed expenses when negotiating a staff job. Today we'll discuss variable expenses. These expenses vary from day to day and month to month. At the absolute least, they should allow PJs to break even. Otherwise they are support payments to the company.

Most job hunters don't think of vacation as a variable, but it is. Senior PJs who have the game figured out can negotiate reasonable vacation as part of the package.

Most PJs with many years under their belt get up to six weeks of vacation. Why would someone willingly move to another company and forfeit vacation (read as free pay)? If the other company wants the PJ bad enough, they should offer vacation as an incentive. It's understandable to request the standard two weeks per year.

Heavy hitters should be able to squeeze the appropriate number of weeks commiserate with experience. Someone with 30 years experience and a boatload of awards, should get their full six weeks. Otherwise, it's simply a loss to move.

For other shooters who aren't quite as award heavy, consider the number of years experience as incentive for vacation time. If vacation isn't offered for years of experience, deduct one week's salary from the total for each five years (major awards) or seven years (minor awards) of experience.

If a company gives an auto allowance, they might only let PJs claim out-of-county miles. If the company does not pay an allowance, they should pay mileage at the IRS standard mileage rate. If the company isn't, PJs pay the poor corporation for each mile driven. For example, if IRS rate is 40 cents per mile and the company only pays 25 cents per mile, the PJ has lost 15 cents per mile.

The argument given is the PJ can make up the difference on taxes. However, the amount made up at the end of the year is about 1/3 or 5 cents per mile. In a best-case scenario of this arrangement, the PJ loses 10 cents per mile for every mile driven all year without interest.

A normal week is about 800 miles. A normal year is about 40,000 (50x800 - the other two weeks are vacation). The 15 cents lost for all these miles equals $6,000. If there is no allowance and the company is paying less than the IRS rate, deduct this amount from the salary as an expense for the PJ.

Meal reimbursement
Since most PJs don't have time to eat a meal, this issue is typically a nicety, but knowing all options may become important by the end of the equation. For young, single PJs before payday, this might be the only meal of the day. ;-)

Some companies reimburse meal expenses based on distance while others prefer duration. Find out the policy as a factor. If the meal is based on distance, the meal cost is reimbursed if the PJ is one or two counties away from the office. If the meal is based on duration, PJs may only get reimbursed if away from home (out of town) more than eight hours.

Additionally, some in-town meals can be reimbursed if pre-approved. Typically these are award functions or other events where a PJ might actually have time to eat or is a guest speaker or otherwise a participant.

If meals are reimbursed by distance, it's normal and works out. If meals are reimbursed by duration, expect to be buying some burgers without reimbursement. For this, estimate $6 per day. Assuming it happens once bi-weekly, it could cost as much as $150 annually. Yet again, another deduction from salary.

Contest fees
Let's face it, most contest organizers decided to break even or make a profit. It's fair - especially if the winners get cash prizes.

From a contest organizer's point of view, contest fees eliminate most wannabes and save judging time. Any profits typically go toward airfare for top-notch judges or toward some form of academic scholarships. Additionally, the fees are a write off to the entrants, so entry fees shouldn't be an issue.

Problems arise when PJs must pay their own way into a contest. Yes, PJs get to write off entry fees, but again this is 1/3 cost.

Make sure the company covers contest entry fees while negotiating jobs. If they don't, the PJ is far less likely to rack up any significant awards and is losing time on a career track. Since most pro PJs enter a contest or two each year, deduct the normal amounts from a salary offer if the company doesn't cover these expenses.

As a follow-up question, ask if PJs are reimbursed for contest fees or the company pays for everyone to play. This is a double-edged sword. If PJs are reimbursed, they are giving the company an interest-free loan while waiting to be reimbursed. On the opposite side, the company typically picks which images and PJs get to compete when they're writing the check.

If a PJ finds a company that pays the fees and doesn't want to control who or what goes to contest, hug the photo editor.

Travel expenses
Travel expenses for company-authorized trips should be paid by the company. This includes airfare, rental cars, hotels, meals and everything else related to conducting company business during the trip.

Although smaller papers only authorize shoots within driving distance, make sure the company doesn't try to say the mileage covers any of these other expenses. It doesn't. This is why it's called mileage.

If the company has some strange rule I've never considered, deduct the difference between what should be paid and what is actually paid.

Variable incomes
We finally get to add some money back into the salary. :-)
These are additional sources of income for PJs. Don't consider them as part of the base salary. However, when making a side-by-side comparison of different newspaper offers, these should be included in the total package.

Bonus structures
Typically, large corporations give employees an annual bonus to keep everyone happy and reward them for their productivity. It's normally not a major amount, but it should be understood and clarified for new hires. The bonus might be worth $500 to every employee or slightly more for employees with many years of service.

If the competition is tight between two companies on various incentives, the bonus structure might tip the scales. When understanding the structure, get answers to the following questions:   Do all employees get a bonus? Is the company showing a profit this year? Has the company paid bonuses for the last several years? How are bonuses calculated (normally a percentage of annual salary)?

If the factors above are negative or the company has made a large purchase or investment, then don't expect a bonus and don't include it in a decision. Otherwise, include half of the expected bonus (tax eats the other half) for premium jobs. Don't include any bonus for less desirable jobs.

Most corporations offer a variety of financial plans. Among these are 401Ks, stock purchasing plans and more. Premium companies automatically pay a small amount into these funds for employees and further match any contributions the employees pay. This is the most painless way for PJs to look out for their future.

If possible, it's best to maximize individual contributions to these plans. Find out what amount, if any, the company contributes on the PJ's behalf. Add this annual amount into the offer equation.

Although it's not written anywhere (because nobody wants to get in trouble), it's generally understood that a PJ's eight-hour day is relative. PJs get paid for an eight-hour day if it's 20 hours or if it's four hours. I've tracked it, and it really does turn out to be about right (including the one hour obligatory "daily meal").

Some companies authorize overtime for specific shoots after a normal eight-hour shift. They'll tell the PJ how many hours they'll pay, and that's it. All is good. Other companies might offer compensation time for these overage hours. It's not as good a deal, but it's better than nothing.

However, the important issue when negotiating for a job is to find out the overtime policy. If the company has a zero-overtime policy, it might be good to look elsewhere. If the company has an overtime budget and would rather help out staffers rather than freelancers, it's a better deal for staffers.

Normally, this situation comes up before the holidays, vacations and around major medical, home or auto expenses arrive. The point is to allow staffers to make some extra money when needed. This provides staff-quality (and copyright) images for the company and bails out staff PJs.

If freelancers are paid fairly, this also means additional savings for the company. It may take some budgetary magic to move funds from the freelance budget to the overtime budget, but the end result benefits the company in three ways.

Typically, PJs work on days off and get paid for a full eight-hour day. They simply lose a weekend day, but got an extra day of pay at time and a half. It's a good deal if staffers need it. It's a potential hardship if overtime isn't budgeted.

Additionally, if overtime isn't budgeted, it means the remaining staffers may need to take up the slack on a smaller staff. For example, if two PJs are on vacation, another five are covering major breaking news while two more become sick, the remaining staffers must work on days off in exchange for comp time. Comp time is typically 1-to-1 rather than 1.5-to-1 as overtime pays.

In short, make certain there is an overtime budget and see how easy PJs can tap into it for personal emergencies (rather than production emergencies).

If overtime is available for staffers as needed, add one week's pay to the salary calculation. If the company has a zero overtime policy, deduct one week's pay.

Holiday pay
Holiday pay is double time (one work day plus one holiday). While negotiating, make certain the company doesn't try to offer comp days for working on holidays. Or, if they do, make certain it is at a 2-for-1 ratio.

If the holiday is on a regularly-scheduled day off and the PJ works, it should be recorded as double pay plus one comp day or triple pay (they'll never pay triple time, but give it a go).

If the company offers comp days for holidays worked, deduct three days pay.

Relocation package / signing bonus
If newspapers want to keep readers, they search for the top PJs. This means most PJs must be relocated to the newspaper. There are typically a wad of expenses involved in this move.

If the paper doesn't want to pay these expenses, pass on the offer.

Meanwhile, some companies don't specifically offer a relocation package. Instead, they will offer a signing bonus in lieu of a package.

If PJs don't need to move (a rare event), there is no harm in asking for the signing bonus anyway. If granted, add this amount to the salary package as a one-time "sweetener." For a more realistic look at the amount, only add 1/10th (the amount spread over 10 years).

Variable use and market
These factors determine PJs' ability to retain income and make additional freelance income within a market. For lower salaries, these issues become more critical.

Perpetual use
For me, this is a critical issue. I'll never again work at a company without a guarantee that I can use whatever I shoot for my own purposes without payment to the company. This isn't permission to sell prints. It's simply permission to use images the PJ created in books, blogs or Web sites without payment to the company. It's a fair request and motivates the PJ to make the best images possible.

Although it sounds strange, it's important to have this clause in writing. Otherwise, as soon as the employee leaves the fold, they could be required to pay the company the same use fees any other publisher would need to pay. Consequently, if PJs want to make a book (text or art) and use images they shot, these fees immediately devour any potential profit.

If possible, get the words "all images" into the agreement. This allows PJs to use outtakes in addition to those which ran. Since we all know many good images die because space is tight, it's best to get these words into the agreement.

The images are being published somewhere, so the lawyers can't argue about normal outtake problems. No subpoena problems are created by publishing extra images.

If the company refuses to allow perpetual use or - even worse - charges for use, deduct $2,000 per year (a cover spread plus two inside pages).

Aftermarket sales rights
Aftermarket sales are possibly the most lucrative of all variable incomes. This income shouldn't be calculated into salary negotiations, however it's a critical bargaining point. Whatever the eventual agreement is;   get it in writing.

The company could keep 100 percent or let the staffer keep whatever they can earn. Larger organizations may have an aftermarket sales editor or manager (a staffer's best friend). This person contacts other publishers to get secondary income from staff-produced images. The use fees typically range from $50 to several thousand dollars (depends on the image and interested markets).

At medium and large papers, print sales go into a general fund. The selling of prints are considered a courtesy for the customers and whatever profit does come for the margin is easily absorbed by the general cost of doing business (pool lenses, batteries, etc...)

Smaller, one-shooter pubs may consider aftermarket sales as make-good for low salary. The smaller publications typically aren't prepared to handle large-scale print sales, so they'll additionally let PJs price, sell and pocket profits from prints as well as aftermarket rights. Again, this keeps lower-paid staffers happier.

Either way, PJs should not feel abused at the end of the game. If the company actively markets the images for the PJ and splits the aftermarket profit, it's a good deal. If a PJ is required to market the images and gets no compensation, it's time to look for a new job.

If the company keeps all aftermarket profits, deduct $2,000 per year.

In-house contests
In-house contests are poo-pooed by some staffers, but they add up to a significant amount for the company. They can also add up to a significant amount for PJs if it's a regular goal.

In-house contests are far easier to win than head-to-head international pro competitions. The likelihood of winning is based on the number of staff members available for the prize pool. The contest may be among photo staffers, the newsroom or the entire organization. These contests may also take place weekly, monthly, quarterly or annually.

Some in-house contests are considered easy money for whoever enters because most staffers forget to enter. Other contest winners are determined by management. Either way, consider it found cash when it happens, but don't consider it in the salary negotiations.

Even though we won't add it into the calculation, we still need to know about it - particularly if it's an easy-money contest. We'll want to know who (how many) can enter, how it's judged, how much it pays, how frequently it occurs. Then, we can try for the prizes and possibly pick up some extra beer money.

If the company has no in-house contests, deduct $500 per year.

Schedule rotation
Schedules may appear to be a quality of life issue, but it eventually boils down to money in the bank. Saturday night is when folks get married and have lavish parties where quality photography is needed. A wedding can earn a good PJ $5K ($20K p/month in May and June).

Consequently, if the PJ has no potential of ever having Saturday nights off, this is potentially a significant loss. Friday nights also have a fair amount of freelance work, but it'll never make up for Saturday nights.

Staff rotation policies are typically determined by the photo department. A fair rotation allows all staffers to have weekends off during some part of the year. It may not be during the ideal time, but staffers will normally trade out as needed to manage freelance gigs.

However, if the rotation is completely determined by seniority within a company, it becomes a liability to be "the new kid." If the staff has little turnover, it might be 10 years before the PJ can expect to shoot freelance regularly on Saturday nights.

Because freelance income is an unpredictable amount, it can't really be added to a PJ salary offer, but it means the offer on the table better more than cover all the PJ's expenses or there will be trouble down the line.

If the new PJ must work every Saturday night until further notice, deduct at least $5,000 per year (one premium wedding).

Freelance potential
Obviously the size of a newspaper's city directly impacts the ability to freelance. If the city's size is measured in millions, there is far more freelance potential than if it's measured in thousands.

However, if there is dramatic distance from the nearest larger town, PJs have a significant advantage. If national news breaks in the proximity of the PJ's home city, no other PJs may be able to cover the news as rapidly. Consequently, a rural PJ may be able to dictate better terms for freelance assignments. If the freelance client doesn't like the terms, they can send a shooter from New York. ;-}

A single shooter or small staff in a large geographical area may be the only pro shooter(s) within several hours of the area. As such, potential clients contact the closest daily newspaper to the area they need covered. This creates potentially significant extra income for staffers in those areas.

The only potential problem is at a small paper inside a large metro area with a nearby mega-paper. Freelance clients call the big paper first and the smaller papers only get cheap clients.

If the paper is the smaller player in a major market, deduct $1,500 per year.

Workplace variables
These could be considered "happy factors." They determine the value a company places on PJs and their emotional well being as it applies to the workplace.

Camera purchase plan
Some companies prefer to provide all equipment for their PJs. This trend is happening more since digital cameras were introduced. However, prices have gone down from the old $20K bodies, so the trend may reverse.

Other companies provide camera bodies and have the PJs provide all accessories. Still, some companies expect PJs to provide everything. It's important to know what's expected when PJs walk in the door.

At papers where PJs are expected to provide all or most equipment, there should be an equipment purchase plan in place. Otherwise, PJs are in trouble from day one.

A decent purchase plan includes an annual matching camera allowance (1-to-1 with some limits). A great purchase plan is a 50/50 plan with zero interest. This is a great staff incentive and keeps good PJs at a location for a while.

The 50/50 plan allows staff PJs to have a candy-store shopping spree. They select whatever they want. The company pays for the equipment, deducts 50 percent and allows PJs to pay back the other 50 percent over time without interest (because the company takes the deduction up front).

This insures PJs have top-quality equipment at all times. Every few years, staffers pay off their loan and reinvest in newer equipment. Meanwhile, they are disinclined to leave the company because they either must pay off the entire remaining loan or turn in an equal amount of equipment to the remaining loan amount. Neither are good options for working PJs. So, they'll stay with the company longer.

If there is no camera purchase plan and PJs are expected to provide equipment, deduct $1,000 per year.

Work environment
PJs don't hang around the office. However when we return, it's good to return to a pleasant atmosphere. When interviewing, if PJs have state-of-the-art equipment (for speed), and personal spaces, it's more promising than some other options.

The amount a company spends on equipment, furniture and office supplies aren't proof of a good job. But, if these same items are inadequate, it's not a good sign.

Old computer equipment does the same job as new equipment. However, PJs must spend more time waiting on the equipment and it's more likely to crash. Therefore, it's easy to guess the company may not value the PJ's time if they haven't updated computers or other equipment in the last 10 years.

Don't expect the company to value the PJ either. If "anything cheap" works as equipment, it works as a PJ as well.

Although there is no real monetary value on this, consider the age of some computers could make PJs lose up to a week of time waiting or restarting old computers. Deduct a day's or a week's pay for old equipment.

Stress is caused by many factors in this job. There are enough real-world stresses to keep PJs wired and restless all night. If other company employees have too much idle time, they may decide to fill the time by creating stress for other folks by constantly changing procedures and expectations. This is a bad combination for PJs because we aren't in the office to combat these stress assaults.

The best situation is an established and codified standard operating procedure. If the company offering a job hasn't written down the processes, then procedures are entirely decided by the whim of those in charge.

Sure, adaptability and flexibility are hallmarks of good PJs. However stable scanning, editing and assignment procedures should exist to maximize efficiency and reduce stress. This job is stressful enough.

Stress and inefficiency wastes time. Deduct one or two day's pay if the company doesn't have a written SOP.

Job security is the primary reason to become a newspaper staffer. Experienced PJs can make far more income and have more freedom as freelancers. However, there is comfort in knowing a predictable amount will be deposited in the bank every other Friday.

Job hunters need to know how stable the company is before signing onto this lifestyle. Upstart papers are the most dangerous and should offer substantial salaries because the entire venture could fold rapidly.

At established papers, PJs should ask why the job became available. If the previous shooter moved on to a bigger paper, fine. If the previous shooters were released because they wore the wrong brand of shoes or some other silly issues, some alarms should sound. If the previous staffer had a heart attack or committed suicide, many questions are warranted.

If the job doesn't appear secure, it's wise for a PJ to save at least two weeks of pay. Deduct these two weeks from the base pay offer.

Hazardous duty pay
As far as I know, there is no such thing at any newspapers. Military and some emergency workers get additional pay while in hazardous areas, but PJs don't. If anyone can convince their department to offer it to new hires, it would be a strong incentive.

Check the balance
Obviously, there are many reasons to change jobs. When PJs consider more than one option, make sure to compare the jobs numerically to get the best deal. Once the staff deal is negotiated and agreed, the company usually won't renegotiate until the PJ already has another offer at a different company.

Consequently, it's important to maximize negotiations so PJs won't be hunting for a new job a week after starting.

For each job offer, run the numbers through this formula page to determine the best options. It doesn't include the image potential, assignment quality, proximity to family or other ethereal values, but it makes PJs take a cold, hard look at the offer on the table. This apples-to-apples comparison should make the better job immediately visible.

Staffers with strong stomachs might want to do the numbers on their current job to see if it's time to find a new home. Since I can predict the outcome for most folks, let's make this less painful. For each $1K lost, take a shot of something strong. If most staff jobs are as bad as I've heard, most PJs should pass out before they get to the bottom line. It's probably best.

Enough for now,

No comments: