Salary drop - are you screwing future you?

mahamageehad

Hi clever people of the Work & Jobs forum!

I'd love to get your opinions on accepting a position that would involve a significant salary drop. Is the person that does that setting themselves on a path to be underpaid going forward, not necessarily in that company but in general. Most interviews ask you for your current salary and they use that as a guide for how much they're going to offer you. Very rarely (in my experience at least) do they set a salary range for the position and use that without taking the person's current earnings into account. It's one of the key reasons quoted behind gender pay-gaps - women are less likely to negotiate and therefore more likely to be low-balled for a position over a male counterpart who has been negotiating increases over the years. (I know it's not always this way!)

Anyway, let's say a person as willing to accept a pay drop in order to get into a new industry or because the company was a better fit or because there was less of a commute. Is there a certain percentage of a drop that would cause you to completely walk away? I know this doesn't take things like bonuses or benefits or progression into consideration, but in general where would you draw the line?

Dial Hard

Your current/last salary shouldn't have any bearing on your next one and in my experience, fewer and fewer potential employers are asking what your current salary is and are instead asking what your salary expectations are, which is far more relevant.

Anyway. My sister is currently in the interview process for a job where she'll be taking an 18k paycut if she gets it. It's a big drop but it's what she needs to do to get out of the public sector and back into the private sector, and she's willing to do it because in the medium to long run, her earning potential is far greater in the private sector as she's at the top of her pay grade where she is and would need to move to director level in order to change that. Which she doesn't want to do, for various reasons.

I also took a strategic paycut last year in order to bridge a gap in my cv, and it paid off.

So no, you're not sabotaging your future self if you're doing it for sound career/development reasons, imo.

mahamageehad

Thanks Dial Hard. Every interview I have been for so far have asked me about my current salary. Sometimes i can twist it to avoid answering, other times it's unavoidable. Many job applications I've filled in in recent weeks have current salary as a required field actually.

Thanks for sharing your stories though, that's helpful. I think 18k of a drop on 100k is totally different to an 18k drop on 40k so it's all relative. It's all hypothetical at the moment anyways, but I was wondering if other people had notice potential knock on effects over time.

mansize

Money isn't everything. I'm taking a significant pay reduction from my last job, but I'll have a better quality of life.

Eoin

mahamageehad wrote:

Is the person that does that setting themselves on a path to be underpaid going forward, not necessarily in that company but in general.

No, not necessarily at all. Taking a cut to move sideways can often work out very well, if you've gone as far as you can on your current path.

The % you're willing to take a hit on depends on too many factors for anyone else's opinion here to really matter to you.

mahamageehad

Thanks folks. @mansize, I know that money isn't everything but it is a major consideration. Glad to hear that it worked out well for you though.

@Eoin, yeah that's very true. I know that the actual % is too much info to advise on here, I was more interested in people's stories. To be honest, I thought the days of asking your current salary up front were gone but I've been proven wrong so I was a little thrown by it.

Speedwell

I was making 60K+ in my old job in the oil industry in Texas, in a company with over sixty thousand people. In my new job, I am one of four, working remotely for a friend's firm. I dealt only with internal clients there, I deal only with external clients here. I have, in effect, a promotion. But because of the labor market here in county Sligo and the fact that I didn't qualify for welfare benefits (and don't want them, either, because they would affect my citizenship application), instead of a fifty percent pay raise, which would have put me in line with other people doing this work, I took over a fifty percent pay cut. It was that or not eat. My friend is actually paying me as much as he can afford. I'm paying the bills and putting petrol in the car and not starving. We can't and won't even try to live in or near Dublin, so there's no point trying to translate what I made in the company headquarters of a multinational corporation based in the fourth most populous city in America to a village near Sligo town.

My husband is doing all he can to find suitable work, but this is Sligo and the market is so dead that employers are getting away with every abuse. He's taking a course offered by the state to increase his skills instead, but I make just enough that his jobseeker's benefit is trivial. If I got a pay raise of a hundred euro a week, he calculates they'd completely cut his benefit and he wouldn't even qualify for the course he's on. And for now it's best he is on it so he can become more employable. He's very frustrated but at least he's making progress and doing something he's interested in.

_Brian

Number of years ago I opted to take a substantial pay cut for a better quality of life. I walked away from 13 hour shifts, nights, working every weekend, bank holidays and often Christmas Day.

My current job I essentially work from home, drop the kids to school and sometimes pick them up. Never work past five and never weekends or Bank holidays.

95% of the time I'm much happier but the odd time when we're budgeting to make a purchase I do miss the extra cash, I'd be lying if I didn't say that was the case.

intheclouds

mahamageehad wrote: »

Every interview I have been for so far have asked me about my current salary. Sometimes i can twist it to avoid answering, other times it's unavoidable.

No need to twist it. If asked directly, simply reply with "MY salary expectation were I to offered this position would be XXX".

If they follow up with "But whats your CURRENT salary" tell them that you dont see it as relevant to the position that you are interviewing for.

dazberry

I've taken pay cuts a couple of times when trying to get out of (technologically) dead-ended jobs. The first time was a disaster and I left the new job after 9 weeks, the second time wasn't all that great either but was somewhat spinning the wheels in the right direction.

In hindsight in both cases I sort of feel that because I was (relatively) cheap, I wasn't necessarily valued and as a result didn't get out of the jobs what I'd hope - in essence give the sh1t work to the cheap guy.

Definitely I'd be very very reluctant to take a pay cut again unless I could see very tangle benefits for that decision.

D.

mahamageehad

intheclouds wrote: »

No need to twist it. If asked directly, simply reply with "MY salary expectation were I to offered this position would be XXX".

If they follow up with "But whats your CURRENT salary" tell them that you dont see it as relevant to the position that you are interviewing for.

It'n not necessarily twisting it if it's an obligatory question on an online application form though. 1 American company that's pretty big in Ireland asked me for my last three salaries in my work history and the questions needed to be filled in before I could proceed (and I tried typing text which didn't validate).

Speedwell wrote: »

I was making 60K+ in my old job in the oil industry in Texas, in a company with over sixty thousand people. In my new job, I am one of four, working remotely for a friend's firm. I dealt only with internal clients there, I deal only with external clients here. I have, in effect, a promotion. But because of the labor market here in county Sligo and the fact that I didn't qualify for welfare benefits (and don't want them, either, because they would affect my citizenship application), instead of a fifty percent pay raise, which would have put me in line with other people doing this work, I took over a fifty percent pay cut. It was that or not eat. My friend is actually paying me as much as he can afford. I'm paying the bills and putting petrol in the car and not starving. We can't and won't even try to live in or near Dublin, so there's no point trying to translate what I made in the company headquarters of a multinational corporation based in the fourth most populous city in America to a village near Sligo town.

My husband is doing all he can to find suitable work, but this is Sligo and the market is so dead that employers are getting away with every abuse. He's taking a course offered by the state to increase his skills instead, but I make just enough that his jobseeker's benefit is trivial. If I got a pay raise of a hundred euro a week, he calculates they'd completely cut his benefit and he wouldn't even qualify for the course he's on. And for now it's best he is on it so he can become more employable. He's very frustrated but at least he's making progress and doing something he's interested in.

Sorry to hear ye have been having trouble! Hopefully the market in Sligo will pick up soon.

dazberry wrote: »

I've taken pay cuts a couple of times when trying to get out of (technologically) dead-ended jobs. The first time was a disaster and I left the new job after 9 weeks, the second time wasn't all that great either but was somewhat spinning the wheels in the right direction.

In hindsight in both cases I sort of feel that because I was (relatively) cheap, I wasn't necessarily valued and as a result didn't get out of the jobs what I'd hope - in essence give the sh1t work to the cheap guy.

Definitely I'd be very very reluctant to take a pay cut again unless I could see very tangle benefits for that decision.

D.

Yeah, this is more what I'm worried about. In my case it wouldn't necessarily be a better quality of life - the hours, commute and work would be largely the same. The stress level might be higher in the new place, but the office politics might be less. The issue is, if the value the job so lowly in relative terms, I'd be worried that the position would be seen as "cheap" and might not get the support it needs. Obviously funds can be an issue with start-ups and small companies but in medium to large companies I think the pay largely indicates how that position is perceived.

intheclouds

mahamageehad wrote: »

It'n not necessarily twisting it if it's an obligatory question on an online application form though. 1 American company that's pretty big in Ireland asked me for my last three salaries in my work history and the questions needed to be filled in before I could proceed (and I tried typing text which didn't validate).

They have absolutely no access to your financial history over 3 previous jobs. The most they can glean is your last salary from tax documents.

Personally I would put nonsense figures in those boxes and if queried I would state that I didnt see the relevance to the current position.

Eoin

mahamageehad wrote: »

@Eoin, yeah that's very true. I know that the actual % is too much info to advise on here, I was more interested in people's stories..

I made a sideways move about 10 years ago - probably amounted to a 10% cut after benefits etc were taken into account. It was enough that it was noticeable at the end of the month, but it worked out in the end.

intheclouds wrote: »

No need to twist it. If asked directly, simply reply with "MY salary expectation were I to offered this position would be XXX".

If they follow up with "But whats your CURRENT salary" tell them that you dont see it as relevant to the position that you are interviewing for.

You don't even need to be that confrontational. Just put down whatever salary you think is reasonable / believable. Even if they see a P45 (which can also be avoided), there are ways to explain any discrepancies.

Speedwell

"What's your current salary", if it is lowball compared to the typical salary, is usefully answered with, "The salary range for similar positions in this market is X to Y [you will have researched it beforehand]. My former employer did not meet market pay standards, and my skills and contributions are definitely worth at least the average pay rate or higher." No employer in their right mind would blame you for leaving a job in which you were badly undervalued, if you had a choice.

mahamageehad

Great advice here all round! Thanks folks!