By Dr Eugene Brink
The essence of work is to earn money and pay for all the necessities and luxuries in your life. One could say that is the chief reason why work exists.
As important as income and salaries undoubtedly are, it could all come to naught if your job is so dreadful and laborious that it kills your spirit. And there is more besides.
“When evaluating a job, there are many different factors to consider in addition to salary. There’s the job itself, your level of responsibility, your title, potential for future growth, and so on. There are also compensation perks like vacation time, bonuses and company equity to factor in,” says Allison Kade, personal finance writer at Forbes.
Is there any real reason for you to take a pay cut? Solidarity World investigates.
- Career change and taking a dream job
Trellis Usher, founder of HR company TR Ellis Group, says one of the primary reasons to work for less money is if you are switching industries. “It’s unreasonable to expect to receive top dollar when you move into a role where you have little to no experience. In these situations, it’s usually a longer-term play to take a cut in pay so you can make a significant jump in pay after 18 to 24 months.”
“If you’ve always imagined yourself in a certain role, or working for a particular company, taking the job might be worth it even if the salary is lower than at your current position,” writes Alison Doyle at The Balance Careers.
The new job with a smaller salary could also teach you new skills and offer a better career path at a new company in the longer run. Hence, don’t be short-sighted but peer five, ten or 20 years down the line.
David Bakke of MoneyCrashers.com says he took a pay cut to escape the restaurant industry. “I was tired of all the long hours and weekend work. My new position involved a salary cut of roughly 10%, but also afforded me more time to spend with family and friends.”
- Improved work-life balance
A survey conducted in the US by the talent acquisition and career development firm Mom Corps found that 45% of working adults are willing to give up some percentage of their salary for more flexibility at work ─ on average, they’re willing to relinquish nearly 8,6% of their income.
“I think the greatest takeaway from this statistic is that salary isn’t everything for everyone,” says Allison O’Kelly, founder and CEO of Mom Corps. “Would you be happy to take a slight pay cut if you could skip your commute and work from home on Fridays? Would starting your own business make you a more fulfilled and happy professional, and allow you to work in the manner that you want to?”
A shorter commute to spend more time with your children could just justify a slight pay cut.
- Better benefits
It’s not always hard cash that counts. There could be certain additional benefits that accompany a job that make it worth your while. Think of working from home – and the opportunity to save on (expensive) fuel – or a bigger contribution towards your housing, travelling expenses, studies and medical aid. Of course, this is for you to weigh up and decide but these are also weighty factors to consider when making career shifts.
Working for less money is not the most ideal situation and everyone should first assess their own financial situation before walking this plank. Taking hefty pay cuts are certainly not advisable because it would seriously impair your ability to meet your financial commitments and maintain your lifestyle. However, fairly minor pay cuts might – all things considered – pay off well in the present and future – albeit not necessarily in monetary terms.
Alison Doyle, 20 January 2019, “Why Would You Accept a Job for Less Money?” https://www.thebalancecareers.com/why-would-you-accept-a-job-for-less-money-2060989.
Allison Kade, n.d., “When You Should (And Shouldn’t!) Take A Pay Cut”, https://www.forbes.com/sites/learnvest/2013/08/19/when-you-should-and-shouldnt-take-a-pay-cut/#1ca9dd0a3865.
Employment Hub, n.d., “When Should You Accept Working For a Lower Salary?” https://blog.employmenthub.co/when-accept-lower-salary/.
Tom Machal, 14 July 2003, “Lower salary job opportunities can pay off in the future”, https://www.techrepublic.com/article/lower-salary-job-opportunities-can-pay-off-in-the-future/.