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I have tried to compile a list of things that my fellow professionals might be able to do in order to deal with this situation. This may not ease the pain, but at least you may be slightly better prepared.
Rule # 1: Don’t buy their talk
“The check is in the mail” is one of the oldest lies ever told. Obviously, these days nobody mails checks so the line has been upgraded to things like “We’re waiting on a client to pay us” or “We made the bank transfer on a weekend so the transaction got stuck”. Some of these may technically be true, but none of these are good excuses for not paying you.
The Lords Who Control All Finance invented this wonderful thing called working capital financing, available conveniently at a commercial bank near you. It essentially means that the bank will cash a company’s checks even if they don’t have the money in their deposit accounts (up to a predetermined limit) and simply treat the outstanding balance as a loan that automatically gets paid off the next time the company makes a deposit. Many companies, however, are simply too lazy to get such a line of credit. Try talking to a bank and see if they will extend your company such a line if they do not have one. If the bank seems amenable, take that information to your boss.
What is astonishing is that many companies do have these credit lines but do not utilise them to pay employees, prioritising equipment suppliers instead. Essentially, employees are below toilet paper on the totem pole in that company. If that is an accurate description of your employer, go right ahead and punch them in the face.
Rule # 2: Improvise your own cash flows
This is the toughest part and it requires between six and twelve months of extreme pain, but there is simply no other way to get around it: keep at least three months’ worth of a salary in reserve (preferably in a money market mutual fund). Needless to say, this is not easy but here is one option that can be explored.
The benefit of a supportive family structure in Pakistan is that there are usually people you can borrow money from. Do so at a time when you are not strapped for cash. As an uncle, a parent or anybody you know who will make an interest-free loan to you to lend you three months salary. Put that in a high-yield money market fund and then continue to pay back your relative. Depending on your savings rate, and the stage of your career, this should be possible within a year.
Once you have your own cash reserve, make sure to never spend more than you would normally in a month. That includes keeping your normal provisions for savings and investments. And no matter what happens, never put anything on a credit card and never take out a personal loan from a bank. The trouble is not worth it.
Rule # 3: Start looking for other jobs
Any employer who does not pay their employees on time should not be a place any person should work for in the long term. Start looking for other places to work immediately and make sure to ask current employees of that place if they get paid on time. There is simply no point in wasting precious years of your career at a place that does not value your work.
Note to employers: Pay up
We can hear you when you’re planning your vacations to Thailand and Turkey or wherever else you like to go. We also know that you gather with your friends at a club of your choice and moan about how “nobody wants to work these days.” Here is a piece of advice: pay up.
People are not coming in to work because they like you or the job. Maybe they do, maybe they do not. But what they want, above everything else, is to be paid and paid on time. Everything else you do for them is secondary. So please quit complaining, lay off the hunting trips for a month and pay your employees.
Published in The Express Tribune, July 5th, 2010.
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