Work Reform

Profit is not wages paid to workers other than yourself, even workers performing other job functions.

I understand, and I won't discount this. However, there are costs to my labor that are separate from me. For example: If the business is charging $100/hr for my services, I don't expect to be paid $100/hr for work. There's other costs associated with my time, including frictional time between tasks, which may include time between tasks while in transit or simply task switching, or breaks, which the customer is not directly paying for but must be paid to me for my time. Legally here, over the course of an 8+ hour day, I am entitled to 60 minutes worth of breaks, 2x paid 15 minute, plus one lunch break (which may or may not be paid); I also have job tasks that are not related directly to producing profit, so on a good day, when I am exclusively working on a single unified task all day, I can "bill for" at most ~ 7 hours of work (some exceptions exist, but I won't go too far into detail on this), but on an average day, I'm usually generating 5-6 hrs of "billable" work per day.

I cannot reasonably expect $500 to $600 in earnings per day due to overhead and costs. The associated costs of my work, from floorspace to do my job, electricity for the equipment I need to use, the equipment costs themselves (desks, chairs, computer, etc), as well as the costs for other workers time to support my work, in sales, marketing, accounting, etc. all needs to be covered from that ~ $500/day I'm producing for the company. So me earning ~ $250/day ( $31.25/hr, aka, 65k/yr ), or about 50% of the revenue I generate at $100/hr at 5 hours "billed" per day, needs to include consideration for the efforts of management, accounting/finance, sales/marketing, collection and all the non-producing contributors to my workspace, including but not limited to maintenance/janitorial. What's left is profit, which likely isn't very much per hour, but spread across all workers is a non-trivial amount.

At least, that's how it should work. profit, as a function of revenue, should not exceed more than ~20% is the above mentioned scenario. Of course, the realities of the situation are far more nuanced and complex than that, since most MSPs charge monthly for service, not by the hour, so worker pay for the related team needs to balance against all representative clients of the team, with enough overhead to pay for and properly compensate the efforts of sales, marketing, finance, accounting, management, etc. before profit can be extracted from the remainder. Since every MSP client has a different contract and a different amount paid per month, usually based on that organizations headcount. Profit numbers are not strictly tied to the amount I'm not paid relative to the revenue I generate per hour/day/month for the company.

The core of my issue with all this is that companies do not understand all the contributing costs associated to labor, and how the revenue that individuals generate is distributed for the business, and what each employee costs/earns over the course of a day/week/month; and definitely don't understand how much profit they earn per employee hour. I know this because this is a factor in burn rate, and I have asked business managers about burn rate and I'm usually met with looks of confusion or mystery in the matter. Burn rate is simply all those associated costs (salary/compensation, and all associated rent/electrical, and equipment costs) for an employee separate from the revenue they generate. Burn rate is used as an indicator of costs that should be accepted for downtime, and informs how much downtime should be tolerated by the business; that financial number, when known, can quickly inform how much to spend on redundancy, which is something that information technology advisors strive for. When a system is fully redundant, or multiple levels of redundant with no single-point-of-failure (SPOF), then the operation of the production equipment can be reasonably guaranteed 24/7, resulting in no downtime, less redundant systems will require downtime to perform maintenance, upgrades and unexpected faults. So if the burn rate, multiplied by the estimated average downtime of the system, is less than the cost of making the system fully redundant, the system shouldn't be redundant; simply, it is cheaper. However, if the burn rate is significantly more than the cost of making the system redundant, given the estimated average duration of downtime, then the system should be made to be more redundant. This is something I very strongly understand. Sometimes it is simply not financially beneficial to add redundancy to a system (whether server/network/workstation or otherwise). Things that only affect one, or a small group of employees, generally do not justify being redundant; which is why your PC at work generally only has one ethernet connection to a single switch which is probably shared with a subset of workers in the workplace (as an example). You, and the people on that same switch (SPOF for that group of workers), don't represent enough of a burn rate to justify making those systems redundant. This is a fact that is universally true for most workers. The costs associated with employing you while you are incapable of producing profit due to a major network fault that keeps you from working, are not enough to justify the added cost of redundant network connections from your workstation to redundant network connectivity on the network side. If the switch you're connected to fails, a replacement can usually be prepped and replaced from a cold spare in a matter of hours, so for those hours while you cannot work, you're burning money while a technician corrects the problem.

This cost is directly extracted from what would otherwise be profit. This is where profit is converted to overhead in real-time.

Profit, or additional overhead that will often not be utilized, needs to exist, for these edge cases where things have an unrecoverable fault and employees are incapable of doing their job. Profit itself isn't horrible to have, excessive profit is definitely a problem though. There should always be more overhead/profit for the business to function correctly, and not collapse at the first significant failure. If the profit is excessive, then that's literally taking money out of the pockets of workers to pay the upper-class.

My point is there is a legitimate purpose to having additional overhead above and beyond the direct and indirect costs of labor. That additional overhead may, or may not be profit at the end of the day, depending on what's happened.

I understand all this and I accept it as a worker, what I would not and will never accept is when companies are making so much profit on my labor, that goes above and beyond any burn rate or coverage of excessive costs of incidentals, that they can still extract profit from a particularly poor month for downtime. If everything is operating well, then yes, that excess revenue can definitely become profit. Looking at the big picture, this is a trade-off. Profit should be sacrificed for the continued survival of the business during times where performance is poor, or downtime affects the ability to generate revenue.

I think my business diploma is showing. I will only add this: I received just enough education in business to know I don't want to be a part of the business/management systems. Trying to figure all this out and make intelligent decisions on these types of things, seems like a horrible thing to have to do. I suspect this is why I get such dumbfounded looks when I ask about burn rate, because people want to spend so little time thinking about this stuff that they simply don't. While I can't really blame them for that, simply put, it's their job. They decided to be in that role, and that's a part of it.

This is all separate from the fact that companies/corporations are built with the express purpose of generating profit; which is an entirely different discussion usually fraught with some very unpleasant and often unethical topics. This fact has been more or less codified. There have been court cases of shareholders vs companies where the shareholders have sued because business leaders wanted the majority of profits to be repaid to employees in the form of bonuses and raises. IMO, this has fostered a culture of bad faith practices where profit is prioritized above workers on a consistent basis.

I'm not going to apologize or explain away the greed and profiteering of companies; I understand that's what they exist for. Whether I agree with that or not, it's the reality of the situation. Profit is the inevitable outcome of unused overhead which should always exist. Excessive profit, above and beyond safeguarding the business from failure during "slow" times or where revenue is difficult or impossible to generate, is simply greed. Unfortunately, in a capitalist world, greed seems to be the name of the game. It seems to be the foundation of all modern business, and also the thing that both makes it terrible trying to work within the system, or for it. Unless you're at the top (C-level, shareholder, board of directors, etc), you're on the losing end of business greed.