Search
Advice » Salary & Benefits» Salary Information » Working for Less: When It’s ...
Working for Less: When It’s OK to Take a Pay Cut

Working for Less: When It’s OK to Take a Pay Cut

Salaries, like the stock market, are taking a beating in the current economy, and that has people puzzling over changes in pay. Workers who’ve been laid off worry their salary history will eliminate them from job opportunities in this new budget-conscious business environment. Those who still have their jobs are sometimes asked to take a cut in salary, with or without a cut in responsibility. 

As the economy changes, so do the rules about salary. “In the boom times, taking a pay cut was looked at askance -- that you did something wrong in terms of career development,” says Michael Zwell, PhD, CEO of organizational development consultancy Zwell International in Glenview, Illinois, and author of Six-Figure Salary Negotiation: Industry Insiders Get You the Money You Deserve. “Now, you have a strong case to make if your company made significant cutbacks and you took a job that, given the market, was the best available job to support your family.”

Recruiters agree. “Given the economic climate and white-collar and blue-collar job loss, it’s going to become more acceptable for people to take pay cuts and it won’t have the negative stigma that it would if we were in a growth period of the economy,” says Brendan Courtney, senior vice president for recruiter The Mergis Group in Fort Lauderdale.

Sometimes taking a salary cut is definitely the right career move. Here are five situations where that is the case.

1. You Just Need Work

If you’re out of work and you need money to pay the bills, it’s better to take a lower-paying job than to have no job at all. “There are fewer jobs out there and you may not only have to take less money, you may end up having to take less job,” Courtney says.

2. You Move into a New Industry

When a job change forces you to take your expertise to a new industry, you may have to accept a lower salary. The same applies when you take your industry knowledge to a different company area.

For example, if you sold software to human resources departments and you take a new position selling software to medical offices, you’ll lose your industry expertise but keep your functional expertise. If you move from sales to operations, you’ll lose functional expertise, but keep your industry expertise.

3. You Change Careers

Some laid-off workers will find their next job in a completely new field. “If you do that, you’re going to have to take a pay cut because you typically aren’t worth as much in your new career path as you were in your old career,” Courtney says.

4. The New Job Makes You Happy

Having a job that satisfies you is far more important than how much you earn, says Maggie Romance, director of organizational development for Pima Community College in Tucson. She found happiness by trading a six-figure job putting out HR fires for a hospitality corporation for her current, lower-paying position doing staff professional development. “If you find the right match, the money doesn’t matter as much,” she says. “It’s about the happiness.”

5. To Keep Your Current Job

Forced to choose between taking a pay cut or losing your job? Take the pay cut and start a job search. Employers typically prefer hiring someone who’s employed to someone who’s not.

Perform well despite your lower pay, and you’ll build a case that supports giving you a raise when the economy recovers. “It may take two jobs and a recovered economy to get all the way back to that higher salary, but you can at least make a significant leap toward it if you perform outstandingly,” Zwell says.

Moving On

Once you’ve agreed to work for a lower salary, issues will arise. If you have to do the same job for less, your first challenge may be emotional. Accepting a lower salary can be difficult if you hang your self-worth on the size of your paycheck.

Instead of thinking about salary as a measure of your worth, think of it as what the market is willing to pay for your skills, knowledge and experience at this point in time, Zwell recommends.

The new, lower salary will also become a part of your salary history when you apply for your next job. When salary history questions arise, answer honestly. “No one needs to apologize for the fact that they made a lot of money before,” Courtney says. “If you were in a field that was negatively affected by recessionary events -- say you were an investment banker at a large firm and now you’re at a small firm -- it’s expected and accepted that you would take a pay cut.”

And remember that time heals at least some paycheck wounds. “In prior recessions, there are a couple years where salaries become depressed, then they get back up to the norm within a year or two after the recession ends,” Courtney says. “While you may not make up the whole gap between what you were making and what you are now making, you will end up closer to where you were than where you are now.”

Latest Jobs

Palmetto General Hospital
Posted: 07/30/2014
Hialeah, FL
Huntsville Executive Search In
Posted: 07/30/2014
New York City, NY, 10001
Virginia Urology
Posted: 07/30/2014
Richmond, VA
Palmetto General Hospital
Posted: 07/30/2014
Hialeah, FL
Palmetto General Hospital
Posted: 07/30/2014
Hialeah, FL

Want more personalized results?  Update Your Profile

 
 
 

Monster Communities

Teaching Community
Where teachers meet and learn.
ArtBistro
Create and connect.
Excelle
Networking for the career-minded woman.
Nursing Link
Where nurses call the shots.
More Monster Communities

Monster Partners

Scholarships
Scholarships, financial aid and more ways to pay for school.
Education.org
Find top campus and online degree programs.
Military.com
Military portal for the US Army, Navy, Air Force, Marine Corps and Coast Guard.
Financial Aid
Scholarships & financial aid.
Staffing for Government Jobs
Staffing and hiring solutions for federal government agency jobs.
More Monster Partners

Job Hunt Strategy

Six Ways to Make a Recruiter Hate You
If you want to blow your chances with recruiters -- and, by extension, with the companies they work for -- here are six perfect ways to do so.

Resumes & Cover Letters

Rev Up Your Resume to Relocate
Hoping to relocate? Get the ball rolling on landing the right job in the right location with these expert resume and cover letter tips.

Interviewing

100 Potential Interview Questions
Interview questions can run the gamut. You probably won't face all 100 of these, but you should still be prepared to answer at least some of them.

Salary & Benefits

10 Questions to Ask When Negotiating Salary
Most of us aren't natural negotiators, but asking these 10 questions during salary negotiations can help you get everything you deserve.

Employee Sourcing

Alt text
November Monster Employment Index Grows 13% Year-Over-Year, Tenth Consecutive Month of Positive Annual Growth.

For Seekers

Campus and Online Degrees
Advance your career and earn more with an online degree.
Free Salary Wizard
What are you worth? Find out and negotiate a better salary.
Research Careers
Get information on jobs and career paths to help guide your choices
Questions & Answers
Find answers to all your career related questions -- powered by Yahoo! Answers
Resume Distribution Service
Our distribution service puts your resume right in the hands of recruiters.
Resume Writing Services
Our experts will craft a keyword-rich resume that stands out in the crowd.
More Career Resources

For Employers

Career Ad Network
Target your job posting to more candidates on thousands of websites.
Hire Right Background Checks
Explore our background check packages to improve the quality of your hires.
Hiring Home Page
Find the best candidates for your business with Monster hiring solutions.
Job Postings
Find the right solution for your hiring needs. Starting at $99.
Power Resume Search
Monster's new search technology precisely matches people with your jobs.
Resource Center
Find staffing insights, labor trends, HR best practices and more.
Target Post
Connect with skilled, hourly and administrative candidates for only $99.

Social Media

Jobs on Twitter
Find jobs in your area and industry.
Monster Careers
Tune into our career advice and discussions tackling a wide range of topics and industries.
Monster Corporate & PR
Stay up-to-date on the latest news. Get the 'Who', 'What', 'When', and 'Why' on all things Monster related.
Monster Customer Service
Got a Monster question? We've got the answer. Whether you're a job seeker or employer, we can help you find the answers you need.
Monster for Employers
Find advice on hiring.
Follow Us
Check out our many pages and stay connected with the latest industry news, events, career advice and job openings.

Other Links

Monster Company Profiles
Explore companies and get information to guide your career decisions.
Compare Salaries
See how your pay stacks up to others in your field.
iPhone Application
Download the Monster app for iPhone and iPod touch.
Monster Job Seeker Blog
Monster Job Seeker Blog.
Monster Thinking Blog
Monster's Recruitment Trends Blog.
Jobs & Career Resources
Search Jobs:
For Employers: Post Jobs | Search Resumes | Advertise
About Monster | Work for Monster | Advertise with Us | AdChoices | Partner with Us | Investor Relations | Social Media
Terms of Use | Privacy Center | Accessibility Center | Help | Security | Contact Us | Sitemap | Mobile
©2014 Monster - All Rights Reserved U.S. Patents No. 5,832,497; 7,599,930 B1; 7,827,125 and 7,836,060 MWW - Looking for Monster Cable? - V: 2014.4.35.44-224
eTrustLogo