4 Times A Pay-Cut Might Be Worth It!
When searching for a new job, one of the most common motivators is to earn more money. But what happens when you find the "perfect" job, only to learn that it would require you to take a pay-cut?! Most of our first thought is probably, certainly not! However, there are times that a pay-cut might actually be worth it! Read below to learn 4 instances where taking a pay cut might be the way to go!
1. Changing Industries or Careers
Working in the same field for an extended amount of time has allowed you to develop skills to succeed in the specific section. While there are probably several transferrable skills that would enable you to be successful in any position or field, there are some skills that you have to learn. For this reason, taking a pay cut when changing fields makes sense! Suppose I were leaving the field of education for non-profit work. In that case, I must understand that not only do pay structures look different, but there might be specific competencies that I might not have learned previously, such as grant writing. Accepting an entry- or mid-level position might require you to take a pay cut, but it might give you the skills and experience to thrive within this new specific field. One way to give yourself a leg-up when changing fields, considering taking additional coursework or gaining further knowledge to have educational experience. While education does not trump actual experience, earning certifications and continuing education courses show you are serious about making this industry shift.
2. Better Perks/Benefits | It All Evens Out
Evaluating only the salary of a new position when thinking about the overall "pay-out" is a simplistic way of approaching a job opportunity. You must assess offer packages holistically, which includes salary, benefits, and overall growth. At first glance, many people would choose a position earning $90K annually over one that pays $80K annually. However, upon conducting a deep dive, you might notice that the lower salary also includes retirement contribution matching, no co-pays for medical appointments, and the opportunity for end-of-year bonuses. After calculating all the perks' value, you realize that the $80K base salary would actually be a better decision. However, this can also apply to positions that do not have bonus opportunities. Perhaps job #1 is a 1-hour commute each way, while job #2 is only a 1-hour commute round trip? Maybe this new position has a growth projection that moves quicker than the work you are currently in, meaning that you will get promoted and get back to the salary base you were previously at, if not surpass it within a short time. These are all plausible scenarios that you can identify through the type of questions you pose throughout your interview process. Ask the important questions that you need to make an informed decision before deciding to slash your pay-check.
3. Greater Fulfillment
Personal happiness is often something that people put on the back-burner. However, when possible, you should prioritize your joy and interests. Depending on your sector, you might spend 40+ hours at your workplace each week, aside from the hours you might spend doing work at home or complaining about your job. If you have conducted a personal reflection to evaluate the types of positions that would be better suited to source your professional happiness, it might be worth the pay-cut. An example might even look like leaving a six-figure corporate job to give back to your community through your work. Unfortunately, as it stands in the United States, some of the most meaningful positions often pay the least: teachers, community organizers, health educators, etc. However, if you have found a better fitting role that allows you the flexibility to work from home or cook dinner nightly for your family, the pay-cut might be worth-while for you.
4. Needing a Job
And lastly, sometimes we just need a job. There are not many Americans that can afford not to work for an extended time. Even after governmental assistance or savings, realistically, not working for more than a year might not be sustainable for you and your family. Being unemployed for an extended time is when you might accept a position to have a steady income coming into your household. Studies have found that it is often easier to find a job when you are unemployed than when you are not working at all. Accepting a job to ensure that your bills are paid makes sense, and once you find your ideal position, transition.
Ultimately taking a pay-cut is a personal decision. But, before accepting an offer below what you are currently earning, I highly suggest that you revisit your monthly budget. Your new lower salary might require you to sacrifice certain luxuries, such as eating out, or downsizing and finding a roommate. Regardless though, you will be able to identify the lowest possible salary to earn to pay all of your bills. Most important though, ensure that you are not skimping on savings…always pay future self! You will never regret saving your money, even if it is only $20 monthly.
Diana Williams, Resume Tailor
