Facing Late Salaries in My First Job: Should I Stay or Find New Solutions?

Dear All,

I have completed my MBA this year and have secured a job in an IT company. However, I am facing an issue with the organization I have joined as they are not paying salaries to employees on time. I have spoken to some former employees who have informed me that the situation has worsened over the past seven months. I have suggested to management that they should pay employees either 50% or 30% of their salaries on time, but they have not agreed. They claim to have a shortage of funds, making it impossible to pay everyone at once, so they only pay salaries on a request basis. Management has presented this as a challenge for me, stating that finding a solution and convincing employees would be a significant achievement.

Now, I would like to know what office activities can be undertaken if the basic needs of employees are not being met. Management has expressed dissatisfaction with my current efforts, expecting me to introduce innovative ideas.

As this is my first job, I am considering whether I should leave. If not, what innovative ideas could I bring to the table?

I look forward to hearing from you all.

With regards,

Deepmala

Well, do one thing: ask your superior how long the company is going to bear such a crisis. Accordingly, make a list of all the employees, their pay scale, bonus, incentives, and total revenue excluding the expenses. Then curtail all the other unnecessary expenses like bonus, incentives, and miscellaneous expenses such as petrol allowance, traveling allowance, amount spent on tea, coffee, and phone bills of the employees working at higher designations. Managing all these things will help all of you get your salaries on time. Hope this helps if the company is small.

Dear Deepmala,

On a bright side, it's really great that you have to face challenges in the first job itself, but be assured that this will pay rich dividends in the long run!

Suggestions:
1. Mingle with the employees and see what their opinion is.
2. Don't be a traditional HR who nobly keeps themselves out of the crowd.
3. Talk to the Sales team (senior level if possible, but I doubt it since you are a new recruit) about orders in the pipeline, expected breakthroughs, and the recession.
4. Similarly, talk to the finance team about cash flow.

Since you are a new recruit, they may not be comfortable sharing this sensitive information, but you can certainly request it from your line manager who assigned this task. This data will be self-explanatory. First, convince yourself and then try to convince others!

Wish you the best.

Regards,
Amit

Dear Harsha and Amit,

We have already performed activities such as curtailing expenses and other initiatives; however, our sales are not very good. I kindly seek your guidance on the responsibilities I should take in this situation. Additionally, training for IT and support personnel is not happening, leading to the departure of valuable employees and making it challenging to retain new hires.

As a fresher, I am looking for suggestions and guidance from you seasoned professionals on the corrective steps I should take. Your insights and advice would be greatly appreciated.

Thank you.

Why are they facing a financial crunch? Is it related to poor performance and its attendant effect on revenue? In that case, you have to go for a pruning exercise of downsizing and remove the poor performers. Everyone is working for money, and you cannot convince the employees for delayed payment every month. After all, everyone has commitments, and timely payment will be expected by all, including you. Talk to your management for tangible steps and course correction that you may deem fit.

Hi!

You are in a difficult situation, trust me. Do not show your frustration to any of your colleagues and don't make it a habitual discussion on these issues. Simultaneously, try searching for another opportunity rather than being on a sinking ship.

Spaniker

Hi Deep Mala,

I read your problem. When the employer is not paying you the salary, there is no point in working there. Don't let them exploit you, no matter if it's your first job or 10th job. You must fight for your rights. In case you leave this job, don't forget to claim your arrears of salary. No one is expected to work for free, and why should one work for free?

Regards,
Jeevesh
Legal Consultant

Dear Deepmala,

It's great that you perform your duties in critical situations. If the labor policy adopted is "No Salary, No Work," you should inquire with management about how long the financial crisis will persist and personally monitor the situation. The solution implemented should aim to satisfy the workers.

Regards,
Amit

Hello Deepmala,

I understand your situation. Few things need to be noted to solve this problem. If your organization is a product-based company, support people are essential. You have to maintain a 4:1 ratio (support: developer). Testers should be a maximum of two candidates. Track your marketing team's work to increase revenue. Moreover, change the salary breakdowns and reduce salaries. Implement new deduction techniques. Performance weightage needs to be addressed immediately.

If project-based, try to increase revenue from existing clients through upgrades or other means.

Wishing you good luck.

- Manikanth

Hi Deepa,

It is a challenging and good opportunity. Try to go through the 1-year track record for all the employees. You will find some potential as well as unpotential employees. Speak to some senior employees and ask for suggestions. Based on that, you can categorize the salaries. Some employees will be given Basic only, and some will be Basic +, like that. Anyway, every organization has potential and non-potential employees. Employees who don't perform only talk too much. Look at all the IT companies and how they are trying to come out of this financial crunch. Some companies are paying only basic salaries and not giving bonuses, incentives, or perks. Employees should also understand the situation and think that it is their company; they should work harder than in the past. Everyone has their problems and commitments, but they should work towards organizational goals also.

Regards,
Arun

Dear Deepmala,

Although I am new and junior, I feel you are right. The situation is grave, and I don't even understand what your management means by "giving salary on a request basis." I agree with you that employees work in a firm for the need of a salary. The operations cannot be carried out properly in any organization if the employees are not even getting a salary. There is little that can be done. If you have recently joined, I suggest that if you can come up with something, it's great, but if not, then changing your job is the only option, as in such a situation, the employees don't tend to cooperate much.

Regards,
Supriya

Hi,

Please check whether the information you received from your management is accurate. Since you are new, I suggest verifying with the top management. Could you also confirm your designation? If there are individuals above you in your department and in terms of your tenure with the company, it would be beneficial to consult with them to understand the actual situation.

Given that you are new, you may notice several issues just by observing. I recommend analyzing the situation from both the management and employee perspectives. Avoid immediately focusing on cost control as it could impact morale. As an HR professional, it is important to have patience.

Take the time to thoroughly examine and evaluate the points you mentioned so that we can offer you better assistance.

Thanks & Regards,

Mahesh
Head-HR

Hi Deepmala,

I know it is really challenging to be and deal with this kind of situation. What I shall advise is: See the number of promos, amount of monetary increments, bonuses, rewards given in the last 12 months. Check in detail the extra benefits which can be curbed rather than taken off. Take the final amount to the management. However, if the management is not at all convinced with any strategy or idea you provide, I would strongly recommend you to keep eagle eyes on openings in the market for yourself because as per Labor Policy, there have to be minimum wages for every work.

All the Best!! Thanks Shreya

Hi Arun,

Really good suggestion. I am also facing the same problem for the last 5 months. However, I managed it smoothly. In my organization, there are no disputes regarding salary matters. In fact, nowadays, my workers have been informed about the problem and they have started delivering the best quality products. Everybody is aware of their job responsibilities.

Regards, Manisha

Hi Deeemala,

It's quite typical to see you in this situation in your very first job. May I suggest you go and speak with your management. Do you have any options for working from home? This could help reduce your costs in many other activities such as transport, electricity, and other virtual expenses. Additionally, ask your employees to work for at least 8 hours a day, six days a week to perform more efficiently, resulting in maximum output, and consider freezing new recruitments.

Risks:
- Data Base Security
- Less Performance
- Chances of missing SLAs (Service Level Agreements)

Support for the above (May work out):
- Keeping tabs on employees every hour
- Weekly reviews

FYI, this is not a stress on the employees; in fact, we are providing the biggest opportunity to work from home. You may also consider seeking advice on downsizing employees whose performance is poor.

Note: This is only my view.

Thanks and Regards,
Vinay

The task/assignment given to you does not fall under the ambit of HRM. Don't let your management make a fool out of you and other employees. Just leave such an organization that is not fit to be called a company - it's just managed the legalities of being a company. A company has no business to exist if it cannot give a salary to its employees. Let it file for bankruptcy.

Regards.

Congratulations on facing challenges similar to mine in your first job.

In my opinion, your company may have allocated funds for bonuses, gratuities, incentives, and other welfare benefits in some form. I suggest discussing this matter and, if possible, consider liquidating these funds to ensure timely salary payments. Please refrain from abruptly leaving your current company. As HR professionals, it is not advisable to do so. Put yourself in the owner's position and provide your insights.

Regards,
Balaji.V

Hi Deepmala,

It is a good experience, at least for your career. There are hundreds of companies in the present scenario, doing the same. The management is hopeful of getting some orders; some are taking advantage of the existing scenario. I suppose by this time all the cost-cutting measures would have been suggested by your line managers and various other consultants to your company. Most would already be in force. If they are not paying the salaries, the statutory compulsions also may not have been met to date. Still, non-payment of salaries is a significant issue that needs to be considered.

If the management is still holding the ground, then they must be hopeful of some silver lining. I am not entirely with them...

I understand it is an IT company, the pressure would definitely be less. Thank God that you are not in a manufacturing unit, where there would be physical assaults also.

I suggest, as our friends suggested, have an eagle's eye to bail yourself out, and as long as you are there in the organization, be positive and convey positive messages to whomever you interact with. At that time, you are the management representative (keep that in mind).

Regards,

Srinu

Is it true that employers have to pay salaries to their employees within ten days after the completion of the month?

Anyone, please answer me.