Thursday, January 22, 2009

Of Negotiations and Job/Salary Cuts

Now with high-fiber Add On:

In one of my recent studio jaunts, an artist pulled me aside to say:

"I'm getting jerked around the admin here. I had a contract that was up for renewal, and they called me in and said they would pick up my option, but only if I signed an amendment keeping my salary at the old rate. I think this is pretty unfair, since I'm on the low end of department pay rates now ..."

Of late, I've heard variations of the above at various work places. There seems to be something in the air.

... Warner Brothers Entertainment is the latest to cut staff, announcing 800 jobs would be lost, or 10 percent of its worldwide staff. NBC Universal and Viacom have already cut jobs, and industry watchers expect more job cuts to be announced by Walt Disney and Sony Pictures ...

The thing of it is, I don't know a studio that isn't performing serious belt-tightening, and this is on top of previous belt-tightening And part of the tightening is walking back salaries.

The complaint I hear from members is: Why are they doing this? The company had a great year!"

There's really a variety of answers, and here are three: 1) There's an economic meltdown going on, and corporations, no matter how great their recent success, are running scared. 2) Companies really are experiencing problems. And 3) Employees are more receptive to now wage hikes when lots of people are unemployed.

I know there's been a lot of angst among artists and tech directors in the cartoon business, and rightfully so. When management holds meeting saying how tough things are, people start worrying after their livelihoods.

I mean, if Harrison Ford isn't getting his usual stipend, things must be bad, no?

But that didn't change the sad situation of the employee who thought he was being abused: "I'm doing better work than the guys in the other cubicles, but they're making lots more money than me. It's not fair ..."

My answer was ...

"Fairness has got nothing to do with it. If Gargantuan Cartoons can buy your services for less, why do you think they'll voluntarily pay more? They are not in this to be even-handed, they are in business to make money."

Your task is to negotiate wisely and well. That means you

1) Know what others are making and can make a cogent arguments why you should make as much ("I'm faster and more productive, my quality is better," etc.)

2) Know what the company's bottom-line is. If they are really not going to raise your salary because of some corporate wage freeze, then you need a strategy to work around that. (Like, an agreement for a pay bump at a future date?)

3) Know what your bottom line is, and be prepared to act if you don't get it (for instance, walking away from a bad deal.)

4) Not giving a final answer until you go off and mull the company's proposal for 24-48 hours.

Negotiating pay hikes right now is really, really tricky. My advice, go in with as much useful information as you can to buttress your arguments, but don't assume a successful outcome.

The only way you can guarantee the pay raise you deserve is if you know what cards management is holding, and what money they're willing to slap down on the green felt table to keep you happy. (In other words, whether or not you've got sufficient leverage.)

Add On: And on the macro level, there is more great news with unemployment:

The number of workers filing new claims for jobless benefits rose by a more-than-expected 62,000 last week, government data Thursday showed, as a year-long recession continued to chill the labor market.

Initial claims for state unemployment insurance benefits increased to a seasonally adjusted 589,000 in the week ended Jan. 17 from a revised 527,000 the prior week, the Labor Department said.

It was the highest level of initial claims since a matching reading in the week of Dec. 20. The last time claims were higher was in 1982 ...

Since employment is a lagging indicator and the leading indicators don't look so hot, we will no doubt have some ... ah ... choppy times ahead.


Anonymous said...

I wish I could light a candle rather than curse the darkness, but I can't. My personal opinion(and one which any and all are free to disagree with) is that this is not going to get better but worse.

The super huge and totally ineffective conglomerates that dominate our media have been proven ineffective. They rule by committee, and in doing so they lack any real vision. Their hierarchy is clogged with tiers upon tiers of expensive middle management and they have proven for nearly the past decade that they cannot create enough decent content to make a profit. Sure they come close with a hit here and there for every four or five dozen tries, but its getting just a little worse every year.

You'd think that some small studios would be there to fill the gap for Time Warner, Disney, and Viacom ... but they won't. Because those three companies OWN nearly all of the channels and in owning them their policy is not to show anything on those channels that they don't own entirely.

They can't produce the best content because they are too big to cultivate it and they won;t show content produced anywhere else. This is where media deregulation has brought us. A stale dead end.

I know this is a dreary drum to bang. I'm sorry. There just isn't a single benefit to the employees from this media conglomerate clusterbang that we are stuck with. Not one single benefit to it.

Anonymous said...

I hate to agree with a downer statement but I must say I do. Things are tightening up and will continue to do so. Some of these media giants are profusely bleeding and the smaller companies are holding their own. They do have the challenges of getting past the media giant gate keepers, but with smaller more rounded staff they are survivors. They may not make as much as the large studios but in other ways they may be more rewarding like a lengthier term or more optimism about going into work. The state of animation has been in a serious state of change for the last 6 years. not sure when it will settle out.

Steve Hulett said...

"Too big to fail" seems also to mean "Too big to succeed."

Obviously some exceptions exist, but this seems to be the current reality.

Anonymous said...

Well, I don't disagree with robiscus, but instead of focusing on what we can't change, maybe we just need to focus on what we can, such as:

keeping our skills sharp,
getting some training on relevant software to add to our skill set,
always having our eyes and ears on the job listings, keeping abreast on what's happening in the industry

I know a lot of people constantly doing this and its paid some dividends for them.

There are some jobs out there still. The big congloms do need to produce new shows, maybe not as many. The point is, they have to produce new shows. And they will have a need for artists.


Anonymous said...

The word is out there that there was some "survey" done between major animation studios, union and non-union on animator salaries (Disney Feature, Pixar, Dreamworks feature, Blue Sky and Sony Imageworks) So each of these studios could supposedly assess how much they pay their staff and adjust, generally downward. Does the union oversee this type of conversation at all? It seems like something they should be involved in to prevent wage collusion. I personally think this type of survey should be, or maybe is illegal. The free market will set prices properly without letting a studio's corporate ego come into play. Animators will take work at a studio when the price is right. It seems a bit wrong to hire someone, move them, get them settled in, and then adjust wages out from underneath them after talking with their competitors.

Steve Hulett said...

There's various forces at play regarding wages ... I mean, beyond "market forces."

1) If a union has "critical mass" in a market, it can aid in keeping salaries higher. If not, not.

2) TAG publishes an annual wage survey, accessible on the internet at (click on "contracts" then "wages").

3) In my experience, studios try like hell to keep employees from sharing wage info, even though it's in violation of California labor code -- sections 232(a), 232(b) and 232(c), if you're interested.

I've gotten plenty of reports through the years from artists who have one-on-on-ones with managers who say "we'd really appreciate it if you would keep your salary to yourself."

When I've called managers on it, I get "well, as long as nobody takes us to court ..."

Fun, huh?

Anonymous said...

Wanna talk about fun? I just finished my grad degree and am just starting to look for a job.

Yeah...tons of fun...

Anonymous said...

I fear I might have been guilty of being overly lugubrious(10 cent word alert!).

The trend we should all hope to see is smaller hosues producing content for the big conglomerates. Its the logical solution to their failures running their studios.

Anonymous said...

1. small group of smart people find niche to exploit, work very hard for very little money for a long period of time, their work and efficiency finally pays off and they hire ten people.

2. slightly larger group of people grow as large as they can within their market, face choice of inviting investors and borrowing larger amounts of capital. they do both.

3. company suddenly grows massively overnight, owners sell out, company hires hundreds of attorneys and thousands of people. company focuses on repressing competition to protect market share, invests less in innovation. fails to attract new talent with new visions.

4. massive company becomes too large to adapt quickly to market changes. younger, thinner competition emerges with talent that massive company would not hire due to lack of experience.

5. massive company goes bankrupt (or gets a bailout.)

wash, rinse, and repeat.

Anonymous said...

Wanna talk about fun? I just finished my grad degree and am just starting to look for a job.

Yeah...tons of fun...

If you're good, you have nothing to worry about.

If you're not...

Anonymous said...

quote: It seems like something they should be involved in to prevent wage collusion. I personally think this type of survey should be, or maybe is illegal.

Law Novice, that is an excellent question.

There is no debate that the survey was done. I am also no expert on the law, so I would appreciate any informed input someone could bring.

My guess, and this is purely a guess, is that simply sharing and collecting wage information between companies in and of itself is not collusion. Actual collusion would involve a tacit agreement to cap or lower wages--in other words, proof that the companies acted on the information in a coordinated fashion. This might be a little hard to prove.

There is circumstantial evidence: shortly after the survey was completed, we saw a quick move by multiple survey-participant studios to lower or freeze their wages. Disney announced a wage reduction of 18%, Dreamworks announced a wage freeze.

In addition, several of the studios (at least three) have entered into a tacit "non-poaching" agreement. Their respective recruitment departments have agreed not to approach working animation professionals, but rather, to wait for the professionals to approach them. This is to avoid any bidding wars like in the mid-90's, which would tend to drive wages up.

Anyone know if any of this is illegal?

Anonymous said...
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Anonymous said...

Iger made $30 million this past year. Disney axed 600 jobs yesterday. I wonder where they could have scrounged up the money to keep people employed.

Anonymous said...

Doesn't matter about whether you're good or bad. There's a flood on the market and the jobs are scarce.

Also being an asshole doesn't help you find a job either.

Anonymous said...

> The word is out there that there
> was some "survey" done between
> major animation studios

Not just a "survey". The powers-that-be meet with each other on a regular basis to compare notes. A practice which they of course discourage their employees from indulging in. ;-)

Anonymous said...

Job salaries for companies all over America. It's a good place to get this type of information.

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