Is Taking a Pay Cut for a New Job Ever Worth It? Let's Discuss When It Makes Sense

Dear Forum Members,

Is it okay for a person to accept a lower remuneration than one's present salary package as a result of a job change? Under what conditions can this happen if it's possible?

Thanks

Hi,

To my knowledge, it is not advised to accept any job that offers you less remuneration than what you are currently receiving. Moving on to the remaining 10 percent, if you anticipate significant growth in your chosen field, for instance, accepting a position at a retail outlet last year may have meant a compromise on salary. However, if you now observe a high demand in the same field, the situation may have changed.

Another scenario could be an opportunity in a field where only experienced professionals are typically hired, but you manage to find a company that cannot offer a high salary yet needs employees for that domain.

The third case involves your dream job, where the current employer may be unable to meet your salary expectations.

These are some instances where compromising on pay may be considered. There could be other reasons as well. I hope this helps.

Regards,
Kumar M

Could be due to lots of reasons:

1) Change in the industry. Service industry employees earn relatively more than manufacturing employees.
2) Companies have their own salary structures for each level. Most of them don't deviate much from these structures.
3) If the person has been unstable in his previous employments, e.g., say I had joined my current employer 3 months back and am already looking for a change. My new employer may not give me a hike on my present salary. They might consider my previous employment's gross salary and give some percentage increase on that.
4) And hey, if I am relatively unhappy with my current work profile or environment, I might want to change my job and might accept a challenging offer at a lower salary too. Money is not the only motivator. :)

Hi Kumar,

To my knowledge, it is not advised to accept any job that offers you less remuneration than what you are currently receiving. Regarding the remaining 10 percent, if you anticipate significant growth in your chosen field, for example, accepting a position at a retail outlet last year might have involved a salary compromise. However, if there is now a high demand for that role, the situation could change.

In another scenario, you may come across an opportunity in a field where only experienced professionals are typically hired. Despite a company offering lower pay, they require individuals to work in that domain.

The third case involves your dream job, where the current employer may be unable to meet your salary expectations. In such situations, it may be justifiable to compromise on the pay. There could be additional reasons to consider, but for now, I hope this information helps.

Regards,
Kumar M

Kumar,

I respectfully disagree with your view that it is inadvisable to accept a job with lower remuneration. You yourself highlighted reasons why someone might choose to take such a position. Money is not the sole factor that motivates employees. From an HR perspective, individuals who stay solely for the paycheck and not for the work challenge may not be the right fit to retain.

There are factors beyond money that are more crucial. Many companies are shifting towards non-financial rewards to retain talent. For a truly skilled employee who aims to progress with the organization, once the passion for work and growth diminishes, no amount of money can keep them engaged.

Hi Samaira,

I do agree with you, but my intention was to put across that there is no point in accepting something less when you deserve much more than that. If a company has been paying you some X amount because you are worth that amount, and if you are trying to accept some X-Y amount with the new company, it mostly means that you are underselling yourself. As for the other non-financial benefits, every company is working on that, so you can expect it from any company.

Maybe I am wrong, but I don't like anyone to undersell themselves.

Regards,
Kumar M

Thank you, Kumar and Samaria, for your comments and contributions. I really appreciate your lines of thought, and I think they are both right. Though I feel the overriding motivating factor of the individual will be the deciding factor. As much as money should not be the final factor to consider, where it will create a source of dissatisfaction for the individual in the future (maybe he/she can't meet his expenses, as we all have financial commitments) or cause a feeling of inferiority complex regardless of the environment, then the person should not take it unless the person does not need money as a motivator. Remember that CEOs are also judged because of the bottom line. Thank you. I still welcome contributions from other forum members.

Lawal

Dear All,

It is the situation and factors like growth, necessity, proximity, and facilities that matter to an individual and may influence them to choose a job even if the remuneration is lower than their current one. Ultimately, the decision depends on the individual and their personal circumstances, and it becomes even more crucial when it is seen as imminent.

Rajan

Hi,

If you will be carrying out the same job functions in your new job as in your current job, then it is not advisable to settle for a lower pay. However, if there will be opportunities for more learning and better growth prospects in your new role, accepting a lower salary at present should not be a problem.

Additionally, you have to consider various factors such as the size of your current company compared to the new one, location, type of industry, etc.

Hope this helps.

Hey guys,

There are various reasons that you have mentioned for considering a job where you might be accepting a lower salary. But what would you say to a person who has transitioned from being a Deputy Manager - Finance to a Senior Executive? He received a better salary and joined a larger organization. I had mixed feelings about this person. The reason he wasn't given the same designation was that we needed a Chartered Accountant for that position, but he did not have that qualification.

Hey Sush,

Going from a higher designation to a lower one has the same logic as salary. The employee must have been attracted by the better package and the profile, hence must have decided to join at a lower position. Though being demoted by 2 levels (Deputy Manager -> Assistant Manager -> Senior Executive) is slightly uncommon. He would have a lot of clarifying to do if he decides to change his job once again. His new employers will not be amused! And yes, the next promotion he would get would be to Assistant Manager and not Manager. He has probably joined just for the raise in money.