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« Associates Weigh Salary Versus Personal Needs | Main | Software Solutions to the Billable Hour »

Online Calculator That Displays Your Hourly Rate - Are Those New Associate Salaries So Great on an Hourly Basis?

The media was recently abuzz with the news that first year associate salaries had risen to $145,000/year (see post here). Good news for the associates? Well, not if they're billing the standard 2,000 hours/year and spending approximately 2,500 hours/year in the office to hit that target (assuming a 1-hour lunch, 30-minute dinner, and 30 minutes of other non-billable, personal matters - see JD Bliss billable hour calculator here).

2,500 hours a year in the office for $145,000/year comes out to a pre-tax income of approximately $55/hour according to the Unpaid Overtime Calculator developed by ThisIsMoney out of the UK (you'll need to replace "pounds" with "dollars" in your mind, but it's the same idea). Doesn't sound so great anymore.

Thank you to the New Zealand Herald which provided a link to the calculator from a recent article that makes the valid point, among others, that many workers have a poor work life balance not necessarily because of the number of hours that their employers require them to work, but because of the additional, unpaid hours they spend schmoozing around the coffee machine. However, the article further notes that some companies have a culture of "long hours" where people are expected to invest significant unpaid time socializing in order to avoid being ostracized. The article suggests that such organizations consider the impact of a "long hours" culture in terms of increased employee burnout and turnover. And for the long hours that are necessary on occasion such as to pitch potential clients, a company should consider demonstrating appreciation for extra hours with an appropriate gesture at some point (such as a gift certificate).

The article also cited some interesting research: by the New Zealand Council of Trade Unions on the impact of long hours on worker and their families, which found almost all of those among 30 families it followed who regularly worked more than 45 hours per week regarded these hours as 'long, unreasonable, and with significant negative effects on their own lives, and the lives of their families;' and by Robert Half Finance & Accounting, which found that work-life balances are getting worse with those working in excess of 55 hours a week including chief financial officers (35 per cent), business advisory services (15 per cent), commercial managers (12 per cent), financial controllers (11 per cent) and auditors (10 per cent).

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