This is a tricky one. This is the part that most people don’t like to discuss because it’s a topic that so many people either hate to discuss or are willing to let slide. For the sake of this article, I’ll use the word “working capital” because I think that’s probably the best word to use when it comes to this topic.
The working capital adjustments that are usually done when a company starts out are a bit like the “hired help” thing. A company hires you as an employee in hopes that you’ll help them get to where they want to be. The company is willing to pay you an agreed upon amount of money each month, but they want you to keep your job.
To make the company’s point about keeping your job, they typically tell you that the company is going to make you a part time worker or, if you want to save money, you can take a salary cut. They want you to continue to work so they can continue to pay you your agreed upon salary.
The problem is, the only part of the negotiation where the company is willing to pay you an agreed upon amount of money each month is the salary cut. Even though the company is willing to pay you an agreed upon amount of money each month, they usually have a hard time convincing you to keep working for them. They want you to quit and find a job elsewhere. They want you to get another job. They want to fire you and hire someone else.
This is called a “work so they can continue to pay you your agreed upon salary.” It’s an issue that arises more often than you think. Companies tend to pay you what they are willing to give you, but they tend to not pay you what you need. So, it’s not uncommon for a company to offer you a salary that’s one or two times the amount of money it’s actually paying you to work for them.
So, you have a job, but you want to work for a company that is paying you what you are worth, and that company is offering you a lower amount than what you are worth. It makes sense, right? Well now they are going to find out you can do better elsewhere! This is called “work so they can continue to pay you your agreed upon salary.
Companies will do this because its the right thing to do. To continue to pay you the amount that your worth. So, what they are doing here is they are saying, “look, you can’t do this job for a lower amount; we can pay you more or we can give you a raise.” Well that’s what they are doing, they are saying “look, if you want to work here, you have to work here.
If you have a higher salary, you can start by giving yourself a raise. You don’t have to ask for it, you can just leave. It’s not the job of the developer. This is what you do and you have to do it.
To put it in context, you can’t hire someone to work for you if you can’t pay them. This is simply a way for employers to make sure that their employees are in a position to work for them.
For developers, the question of how much money they need to make to keep their jobs doesn’t come into it. If you are a developer you can get your salary without having to work, so the question of how much money you need to make to keep your job really has no relevance to the situation. It’s the same with contractors.