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When Should You Take a Paycut for a Job?

PBS NewsHour's 'Ask the Headhunter' weighs in

(This article previously appeared on the PBS NewsHour site.)

In this special PBS NewsHour Making Sense edition of Ask The Headhunter, Nick Corcodilos shares insider advice and contrarian methods about winning and keeping the right job:

Question: I’ve been unemployed for six weeks. I was earning around $120,000. I have been offered a position at $85,000 and, quite frankly, need the money. Even more important, I recognize that my self-esteem is too bound up in my career: I need to work for more than just the money. I am seriously considering accepting this lower offer because I believe these folks cannot afford to pay more. Will my chances of negotiating another position at a higher salary be irrevocably damaged?

Nick Corcodilos: You’re facing a difficult decision, and you need to be sure you are focusing on the key issues:

  • How long can you afford to go without a job?
  • How much time will you be able to devote to continuing your search while doing the job you’re considering taking?
  • How will being unemployed (versus underemployed) affect your self-esteem?

I could easily tell you not to give in yet and that it would be smarter to continue your search. Six weeks is not a long time to find the right job.

It's About More Than Paying the Bills

But being able to pay the bills is just as big an issue.

(MORE: How to Research Salaries When Job Hunting)

You could borrow to meet expenses until you find something better — but how will that affect your motivation and effectiveness in interviews? (I discuss taking a salary cut in more detail in the book How Can I Change Careers?, which is available in the Ask The Headhunter Bookstore.

These are very personal questions that only you can answer, and I think they are more important at this point than whether you’re going to damage your ability to win a higher salary later.

(I hope readers realize that my advice is not tied to this reader’s salary level. You could be earning $25,000 and my advice would be the same. This is not about dollars; it’s about value.)

Why Many Are Taking Lower Salaries

In today’s business climate, downsizings and radical restructurings (including mergers) are putting a lot of good people on the street. Many are taking lower salaries to survive, so they can regroup and “play again.” In a sense, they’re taking temp jobs until the right job comes along. (See “Turn down that job offer.”)

Some employers are capitalizing on this by hiring great people cheaply. This is no more of an ethical problem than accepting a low-paying job while continuing your job search. In this volatile and uncertain job market, everyone’s going to extremes to survive.

(MORE: Why Women Get Smaller Raises Than Men)

You also have to consider that these “odd jobs” can serve as a sort of education and retooling experience for some people — they give you an opportunity to gain a foothold in a new field or business.

Other employers are even smarter. They’re keeping an open mind. They don’t assume that because you took a pay cut, you’re now worth less. They see an opportunity to land a great new employee who might not have been available to them otherwise.

Explain Why You're Worth More

If you take this job at a lower salary, what can you do when you have a shot at a better, higher-paying job later? Tackle the salary question before you get an offer. It’s up to you to explain why you’re worth more money, before you once again settle for less.

How should you express this?


Here’s an excerpt from Fearless Job Hunting, Book 7: Win The Salary Games (long before you negotiate an offer):

“If I take this job, we’re entering into a sort of marriage. Our finances will be intertwined. So, let’s work out a budget — my salary and your profitability — that we’re both going to be happy with for years down the road. If I can’t show you how I will boost the company’s profitability with my work, then you should not hire me. But I also need to know that I can meet my own budget and my living expenses, so that I can focus entirely on my job.”

This approach requires that you have a plan ready to present. But if you don’t have such a plan, then I don’t think you have any business in that interview. So be ready.

(MORE: The Right Way to Evaluate a Job Offer)

Avoid Automated Job Applications

Now here’s the bad news: Because recruiting and hiring are heavily automated in so many companies, your salary data matters more than it should.

If you use an online form to apply for a job and you disclose your salary history, then you will probably lose. The employer is likely to use your old salary to cap any job offer. That’s unfair of an employer and, frankly, stupid. But they do it anyway.

It’s one reason to utterly avoid automated job applications — and it’s why you should keep your salary under wraps.

Taking the time to talk to managers directly is crucial, even if it’s challenging. Direct contact is the best way to justify the salary you deserve, before some Applicant Tracking System pigeonholes you.

So, no, I don’t think your chances for more money will be irrevocably damaged — if you avoid the automated systems.

What counts most in any job negotiation is what positive impact you’re offering to an employer’s bottom line. That’s what wins you more money — but you can only communicate that one-on-one.

Focus on conveying that critical message to an employer, and you’ll improve your chances of negotiating for more money — with a current employer or with a new one.
Copyright © 2013 Nick Corcodilos. All rights reserved in all media. Ask the Headhunter® is a registered trademark.
Nick Corcodilos started headhunting in Silicon Valley in 1979 and has answered over 30,000 questions from the Ask The Headhunter community over the past decade. He invites readers to subscribe to his free weekly Ask the Headhunter© Newsletter. His in-depth “how to” PDF books are available on his website: How to Work With Headhunters…and how to make headhunters work for you; How Can I Change Careers?; Keep Your Salary Under Wraps and Fearless Job Hunting.

Send your questions to Nick, and join him for discussion every week on Making Sense at the PBSNewsHour site.

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