Effects on Lowering Staff Wages

[FlyTO]

As topic suggests: What are the effects of lowering staff wages?

How big of a hit to the CI if wages were cut 10-20%?
How big of a hit to staff morale?
Will there actually be a staff strike?
How long until the morale increases back to close to 100?
Is it necessary to keep meeting the demand of staff wage increase yearly?

The reason I am asking is because my staff costs are at an astronomical $588M /month for around 66,000 staff.

My Flight operations costs: 109M
Technical Services: 97M
Large Pilot: 65M
Very Large Pilot: 61M
Cabin Crew: 146M

These five groups account for around 390M/month about 60% of all staff costs.

[Kazari]

In general, lowering wages is a bad idea. The CI hit can be significant (20-30 percent, in some cases), to say nothing of the lasting morale hit. The morale hit can last years.

But what you can do -- what you should do -- is not give them raises. Then, give individual groups raises based on an arbitrary level you don't want them to go below.

For example, when my people go below 70 percent approval, I start noticing. The moment it gets near 60, I give THAT group a raise. Also keep in mind that each group is weighted by their number, so keeping pilots and crew happy gives you more bang for the buck.

I have had strikes threatened when it gets super low -- like 20 percent, but again, only for that specific group. Strikes are super bad for CI -- similar to when the aviation authority catches you with no C-check.

In my experience, as long as you keep overall morale above 80 percent things stay copacetic. You may even be able to go way below that.

[Sanabas]

My morale in some groups dropped as low as 6 thanks to firing ~25% of total staff, but I haven't had threats of strike action yet, and the morale in all groups has improved, the lowest is now at 20. All of them are reciving the recommended wages though, they make their yearly request in March, they get their yearly payrise in the last week of March. Russia's staff costs are apparently higher than Soviet staff costs, they asked for a 25% increase that year, only ~3% after that.  My CI dropped from 89 to 46, it is now back up to 64, headed back to that 90 threshhold. Delays from unmotivated staff increased, they made up ~20% of delays and ~40% of my cancellationsand, and are slowly decreasing.

The one-off hit for dropping wages shouldn't be an insurmountable problem, assuming morale doesn't drop below ~20. But if having wages that low results in ongoing morale hits from staff asking for raises, it'll bankrupt you. Previous experience of not meeting the yearly demand for wage increases says there's a hit to morale once a month, until you meet the demand. I don't know if dropping the wages results in an instant request for default wages (it might), nor if they'll request wages a couple of % higher than what they were getting before the drop, rather than just a small increase on current pay, when March rolls around (I suspect they will).

You can recover from firings, but I don't think you can survive by underpaying the staff you have long-term.