You’re miserable at your job; a bad boss, toxic colleagues, and long hours. But then suddenly there comes a ray of hope- you have a new job offer! Except when you inquire about remuneration, you’re dismayed that the final figure they’re quoting is below your expectations. What to do?
All logic seems to scream that taking a pay cut is a preposterous idea. Not when you have bills to pay, loans to repay, and a lifestyle to maintain. But, the truth is that there are many instances where taking a pay cut is a prudent career move. Here are some of the best reasons to take a take a financial step backwards with your salary:
1. Better work-life balance
In the past, people were used to working more in order to earn a more luxurious life. But times have changed and perspectives shifted and more and more people are looking for ways to work less and devote more time to their families, friends, or hobbies. Studies have shown that while more money might not buy more happiness, more time just might. If you can still make it work financially, accepting a smaller pay check in exchange for a more flexible job is a good move. Remember no one has ever, on their death bed, said “I wish I spent more time at work.” But many people regret not spending more time with family and friends, resting, or pursuing hobbies.
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Escaping a toxic environment
There’s no doubt that having a job is great for your emotional and physical health and that joblessness is one of the greatest causes of depression. But working in a toxic, high-stress environment can lead to both short- and long-term physical and mental health problems which are not worth the zeroes on the pay slip. If your job entails highly demanding and unrelenting tasks which threaten your well-being or you’re being bullied at your office and efforts to change that have been unfruitful, taking a job with lesser pay and better working conditions might be the right call.
To stay employed
Research shows that the longer you stay unemployed, the less likely you’re to find a job. Hiring managers start viewing you as “damaged goods” because you might have lost skills or have other unexplained issues. Additionally, being unemployed keeps you out of the professional loop, which can hinder your job search. And most importantly, sometimes it’s better to be paid less than not at all. For these reasons, accepting a job offer with less money or taking a salary reduction at your current job is a wise move. Just don’t share this with your interviewers as it raises a red flag and causes them to think that you’ll not be a committed employee.
You’re changing careers
Let’s say you’ve been working in finance for 10 years and you want to make a switch to public relations. You will probably have to accept a pay cut as you retrain and acquire skills for your new career. This holds true whether you’re changing industries or moving to another department in your company. The good news is that this decrease in earnings might be temporary as your additional skills eventually make you more valuable. You might also have more opportunities for career advancement and have a more fulfilled life.
The take-home salary isn’t the only type of compensation you should consider before accepting a job offer. If the new employer offers a better benefits package, it might be worth taking a cut on the on-paper salary. For instance, the new job might come with a better health insurance package for you and your family, paid time off for vacation or sick leave, disability or life insurance, a housing allowance, great retirement and pension plans, health and wellness incentives such as a gym, free training or scholarships to pursue higher education and so on- these fringe benefits can easily outweigh a lower take-home salary. You might even end up having extra breathing room in your budget even if your salary has shrunk.
It’s your dream job
If you’re offered a job you’ve always desired at the company you’ve always imagined yourself working for, it is worth taking even if it comes with a lower salary. Maybe the job comes with a great title, more opportunities for growth in the direction you dream of, and greater personal fulfilment -- which will all be worth it in the long run. It also makes sense if you’re moving from a small organisation to a larger, more robust one with more growth opportunities.