Salary cuts are usually seen as a step back. From a financial perspective, and if you look at it very plainly it indeed is; you will have less money in the bank. However, I am here to tell you that it doesn’t have to always be a bad move. It’s also something that you can play to your advantage and use as a stepping stone for further growth. Career growth is not always linear. Especially if you stay true to yourself, challenge yourself to find a better fit for your skills, chase a better workplace and what you like, etc.. Long gone are the days of staying in the same company and line of work for 40 years. And I am here to share my personal experience in the hope that it can help shed some light on how different career paths can go. And share some tips to help you navigate career moves and when to take a salary cut.
I am not new to taking pay cuts. Throughout my career, I took a pay cut twice when changing industries and careers. I’ve detailed my career journey in a recent post so you can read more about it. However, I have to say, I’ve always had complete confidence in my abilities to come out on top and so I was never afraid to start with a pay cut if I felt the move was the right one for me.
Although I’ve always been ambitious and I wanted to do more and more, until I actually entered the workforce, I didn’t know what to expect. I didn’t have the understanding of what building a career meant, simply because my environment didn’t give me exposure to corporate life and thinking. And so, I didn’t know quite well what I was getting myself into. How I had to approach certain things and talks. But that’s why I am here, writing this very blog post. To help shed some light on the inner workings of a long-term career and steady growth. Things we should be thinking about when starting a new job, when asking for a promotion etc. for those who like me, can benefit from some additional tips and knowledge if for whatever reason didn’t have access to this type of knowledge before.
My salary cut story
Rather recently, I did a career pivot and changed careers by going from Tech Consultant to Product Manager. While it was not a complete 180 degree move, it was still a significant pivot. I stayed in the tech world and now work in a company belonging to a multinational group. I wrote all about what it took to do the pivot in this blog post. However, aside from the hard work that went into the career change, I also took a salary cut. While taking a salary cut never feels like the best outcome, after evaluating the market, the new company, the career progression prospect as well as what I was leaving behind, I am still absolutely convinced that it was the best decision for me at that time. It was an investment towards my long term growth. But also my mental and physical health. I moved from a somewhat toxic company culture into an extremely healthy company culture where people are truly placed first. A company that supports people’s development. And a role where I would up-skill based on the skills I wanted to further. A future proof role with a solid career progression.
I will say again that throughout my career I was never really afraid of changes. Or of taking temporary pay cuts for that matter. That’s because I’ve never really doubted my worth and my ability to perform and grow my salary again. After this most recent career change, I was able to close the salary gap within less than 6 months of being on the new job. So, even before finishing my probation period (which in Europe is at 6 months) I bumped my salary back up to where it was before the change. So that bet definitely paid off. Now, a year and a half later after changing the job, I can say that I’ve had two salary increases and one title promotion. So things did fare well in the end.
If you are finding yourself in a similar situation, below are some tips to help you navigate career moves that may come with a salary cut, and that can help you out with making a decision as to wether a pay cut is right for you:
Sometimes a pay cut is not really a pay cut
Even if a job might be better paid at first glance, if you end up working 70-80 working hours a week, once you calculate the real hourly pay, you may realize your pay is not as high as you thought it was. I think we often fall into this trap, and I have been there too, where we don’t fully realize what our salaries are when we really take into account all the time and work we put into our jobs.
There are non-monetary benefits beyond the salary
We often forget about the non-monetary aspects of a job. And this is something that as time passes, I am valuing more and more. Is the company culture better? Is the work-life balance healthier? Does the company have a good track record when it comes to supporting moms and families if this is something you need? Is the vacation policy more generous? Is personal development something they take seriously? All of these aspects can often bring much more value than a few more dollars would. So I would strongly advise you to evaluate what is important for you. What do you value at your current stage in life? Because this is what will guide you towards finding the right answer for you.
What’s the impact of the change mentally?
I also want to acknowledge the mental load of a bad job. How does this new move feel? Does it feel like a setback or a learning opportunity? Compare that to staying in your current and let’s say better paid job. Does that feel like investing in your career growth? If sticking around and earning more feels more like being stuck, you might consider taking the leap. Personally, I’ve always taken it as an opportunity to take a step back and then be able to grow even taller in a new challenge. Whether that has been a new company, industry, or a whole new career path. I’ve never really been afraid of changes or of taking temporary pay cuts because I’ve never really doubted my worth and my ability to perform and therefore grow my salary beyond even what I was leaving behind.
Have a little faith in yourself
The last tip I want to share is to trust yourself to the process. I think the biggest thing that helped me to navigate such career moves over the years, has been the confidence of being able to surface stronger and better on the other side. Knowing that I would be acquiring new skills and ending up with a more solid prospect for a long-term career with sustained growth ahead. This has always helped me take the leap and embrace the change.
Some more questions to consider are: Is the pay cut temporary? Is the long-term growth potential of your salary higher? Will the new role bring you mental peace? Is the change having potential of improving the quality of your life in general? These are all questions worth asking and exploring when you’re considering a career move that involves a salary cut.
Lastly, I would definitely advise you to consider the change well. While I encourage you to not see a pay cut as a step back, I also think that it only applies if you’ve done your due diligence. Going for a worse paid job at yet another toxic company, is not the type of move I advocate for. If you can afford it, do your research and ponder the change well. Taking a salary cut when the new job is worth it however, is definitely something I can definitely get behind. And this can mean different things for everyone. It could be chasing a healthy company culture and escaping a toxic workplace. Or maybe a better career progression, acquiring new skills, or achieving a healthy work-life balance, etc… As long as the change is worth it for you, the trade-off will also be worth it.
Thank you for reading and I hope the tips I shared above will help you navigate career moves that may come with a salary cut and figure out if the change works for you.