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I Charged $18k for a Static HTML Page

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Re: I Charged $18k for a Static HTML Page

#141

Post by nightski »

w23j wrote: post #127
umeshunni wrote: post #107

Earlier quoted context omitted.

You have to spend X anyway, because the money is pre-tax or non-taxable, you can spend 1.5X-2X, so the extra money is 'free'.

I'm with peteradio, I also never understand this line of reasoning. Let's say the company has earned 1,000$ and the tax rate is 50%. Your expenses X are 100$. So 1,000$ - 100$ = 900$. Of which 50% (450$) are tax and 50% (450$) are profit. Now double X to 200$: Then 1,000$ - 200$ = 800$. Of which 50% (400$) are tax and 50% (400$) are profit. That means your profit is 50$ lower (400$ instead of 450$) then if you hadn't…

It doesn't make sense in terms of raw profit, I agree. But many expenses are paid pre-tax effectively making them cheaper than if you had paid for them with post-tax dollars.

Re: I Charged $18k for a Static HTML Page

#142

Post by cosmie »

axlee wrote: post #32
pornel wrote: post #14

Earlier quoted context omitted.

Large companies operate on a completely different scale of money. If this was a page for a product that's going to make a million dollars, this expense was still a rounding error.

But why are they so stingy with salaries, then?

Last year, Walmart gave US associates a bonus that were based on a sliding scale of tenure and capped out at $1,000[1]. While not a particularly large amount of money for a bonus, it is in proportion to their associate salaries. And in proportion to the amount of associates they have: it equated to a $400mm one off cost. If they had adjusted wages by the same amount (i.e. less than $1,000 per employee), that'd be an additional half a billion dollars in net new recurring salary costs that would be hard to ever walk back for what is a fairly marginal increase in compensation. And you've just made your annual increases that much more expensive by raising the baseline. Even for Walmart that'd be a big chunk of change to absorb[2].

Adjustments to employee compensation can have a lot of second order effects. If you bring in a new employee above what you were bringing employees in at, that doesn't happen in a vacuum. If the employee was brought in at a lower level, you've potentially set a new baseline for where you need to bring talent in at. And also need to make adjustments to your other salary bands to compensate in order to ensure you don't have a flight of more senior or tenured talent when they catch wind of what the new people are being brought in at. It's also hard to "reset" pay tiers over time unless you have an incredible amount of turnover, since your tenured talent isn't exactly going to be happy with a pay decrease over time.

Consultants/Contractors are different. What you pay one consultant has little to no bearing on what you pay any other consultant, nor what you pay employees. The impact of that is insulated to that specific relationship, and ends when that relationship ends.

I currently work at an agency, and the client billing rates for my time varies wildly from levels I'm able to get for myself when I do moonlighting projects (and I'm terrible at sales/rate negotiations) to anxiety-inducing "how could someone ever fathom spending this much money on an hour of my time?!" that are only possible because of the particular pre-existing relationships we have with the client that anchor our value/cost at that point. We even have a few clients with multiple SOWs from different departments, where my rates for each department are on completely opposite sides of the spectrum. If you transfer an employee from one department to another for substantially the same work, you'll need to pay them substantially the same regardless of changes to their incremental value from one department to the other.

[1] https://www.thestreet.com/story/14446039/1/walmart-uses-u-s-...

[2] They did in fact absorb such an increase though - at the same time as the one-off bonus occurred, they increased their minimum wage for US associates to $11/hour, which resulted in an immediate incremental increase of $300mm in annual employee compensation.

Re: I Charged $18k for a Static HTML Page

#143

Post by Hamuko »

testplzignore wrote: post #41

Anyone else think $21k for this much time is too low? That's $156k a year assuming full-time hours which a contractor probably isn't going to get. Plus the guy lives in California. Plus health insurance. What's a typical rate for this length of contracting work in California?

Sounds like a decent pay if he spent as much just sitting on his ass and browsing the Internet as it sounded like.

Re: I Charged $18k for a Static HTML Page

#145

Post by barbecue_sauce »

_bxg1 wrote: post #90
shyn3 wrote: post #80

Earlier quoted context omitted.

Some organization have this issue where you get a budget for your group, and if you don't use it then upper management will think you don't need more resources next year and will budget less or even cut from your department. If you don't use it, they reallocate it to a department that needs it and you never get it back. Another part is where if you get a hiring budget they expect you to use it because if you aren't s…

You just restated the problem in more detail. What I'm asking is, if the above system encourages managers to waste money, why hasn't anyone come up with a better system?

There are systems that encourage the opposite behavior, but they tend to be damaging in other ways. It all comes down to the metrics that you are responsible for as a manager.

I used to manage a grocery department at a well-regarded supermarket chain. In retail, one of the only inputs you can affect at the store level that impacts the bottom line is labor, so metrics are usually organized around labor optimization. Each week, you would be expected to exceed the previous year's Units Per Labor Hour (UPLH). This can only be accomplished two ways: increasing unit movement (which you really have no control over and is largely driven by consumer sentiment and population density) or cutting labor hours. In fact, even if volume is increasing, you can't even add hours even though labor needs scale with volume in a brick-and-mortar retail setting. To exacerbate things, the reductions in labor have already compounded yearly since the policy was put into place. They want you to squeeze water from a stone. "Well, So-and-So (who you've never met) was able to increase UPLH by 10% 5 years ago! Why can't you?"

I guess my point is that systems that discourage waste often lead to insane work environments rather than cleverness or innovation, whereas encouraging waste leads to bloat and inefficiency.

Re: I Charged $18k for a Static HTML Page

#146

Post by blunte »

duxup wrote: post #18

I know someone working as a contractor for a big company. 1 year contract. 6 months have gone by and they've done ... nothing. Their boss keeps saying "Don't worry we'll get to you, we're just swamped right now, you're good." They're already talking about extending the contract.

I've lived this. Myself and a very expensive team of EY kids were waiting eagerly every day for anyone in corp management to throw us any kind of tasks.

On the rare occasion that we were given a task, we would all descend upon one computer like vultures, group-solving the problem typically in 60minutes or less. Then it was back to doing nothing.

Diplomacy (the game) became our primary activity. It was fun, but such a terrible waste of time, talent, and money.

Re: I Charged $18k for a Static HTML Page

#148

Post by misiti3780 »

duxup wrote: post #18

I know someone working as a contractor for a big company. 1 year contract. 6 months have gone by and they've done ... nothing. Their boss keeps saying "Don't worry we'll get to you, we're just swamped right now, you're good." They're already talking about extending the contract.

i worked for lockheed martin 10 years ago (give or take) on a client site. I was W2 (although I wish i was 1099). Anyways, when the government changed from W -> Obama a lot of the DOD contracts were changing because everyone anticipated the Obama was going to cut defense spending (which he did). The project found out that the DOD was not going to be able to re-fund the project, but we had to continue to the end. I ended up forced to "work from home" for about six months until the contract ran out. I legally couldnt get another job, but I went on vacation for a month or two. So I calculate I got paid 1/2 my salary at the time + benefits for doing exactly nothing.

Re: I Charged $18k for a Static HTML Page

#149

Post by le-mark »

was_boring wrote: post #105
axlee wrote: post #32

Earlier quoted context omitted.

But why are they so stingy with salaries, then?

It's the largest line item for most companies, so apply pressure there and get the most dramatic result in the shortest time. Do that to every project and it takes too much mental overhead.

That's also why when companies start talking about "cost cutting" on the order of $millions, it almost always means layoffs. That's a big lever to push on earnings, for example.

Re: I Charged $18k for a Static HTML Page

#150

Post by notahacker »

mbreedlove wrote: post #22
jamesb93 wrote: post #6

So much waste - I'm not saying he didn't earn his money but how is it possible for a company to run cash positive when it wastes like that?

If they can capture $1mm revenue from the website, then the $21k they paid for it is a great investment.

Yeah, wouldn't surprise me if at the other side, some exec who budgeted $50k @ $1200/day for a new lead generating page is amazed it only took $21k and the contractor who did it was apparently diligent about coordinating with the design people himself and not wasting nearly as much management time as the agency that did the last one...
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