At the top of the year, we saw multiple U.S. companies conducting layoffs. As we near the end of spring and the start of summer, layoffs are continuing for many companies, and not just in tech.
Consulting companies like Ernst & Young, investment firms such as Goldman Sachs, and entertainment giant Disney are all examples of companies that have contributed to the mass layoffs that have hundreds of thousands of people urgently job searching – again, debunking the myth that layoffs are only affecting the tech industry.
When coaching clients that have been affected by layoffs, one common question I get is whether they should take a pay cut in order to get a job sooner. After all, beggars can’t be choosers right?
Well, it all depends. As with most career coaching topics, if you ask five different people for their opinion on the matter, you’ll likely get five different answers. And in most cases, there isn’t really a right or wrong take. But in any case, here’s mine:
Whether you take a pay cut to secure a job faster depends on your unique situation. If you can reasonably meet you and your family’s needs for at least the next six months, there’s no reason you have to take a pay cut right away. Instead, keep job searching. Make a concerted effort to secure a new job that gets you a pay bump. Just like you would if you’d left your former role voluntarily.
On the other hand, if you’re in a more desperate situation financially (or fear that you soon will be), it makes sense to consider the pay cut so that you can get back to work. However, you should do so with these two caveats in mind:
– Taking a pay cut now can significantly hurt your earning potential later. But keep in mind that this is a risk, not a guarantee. So, while it’s something you need to watch out for, it still does not outweigh your immediate needs.
– Accepting the lower salary is okay if you have a plan. Take a job at a lower salary to get a steady paycheck? Yes. Take a job at a lower salary for the long-term? No.
After you’ve taken stock of your needs (financial and otherwise), if you decide that taking the pay cut is the best move for you, do so with a plan to continue searching for an opportunity that pays more. You can continue looking right away or give yourself three to six months to settle into the new role before starting to search again. It’s the long game, but ultimately, this option keeps you active in the job market, maintains steady income, and empowers you to work toward something better in the long run.
So…what does all this mean? What am I saying and how does this apply to you?
Well, maybe it doesn’t. Only YOU know what is best for you. That is true now and it was true before mass layoffs; it was true before the COVID-19 pandemic and it will be true once this era is chronicled in the history books.
Even in a struggling economy and a sluggish job market, you know what is best for you. Use that knowledge to get clear on whether you need to get back to work sooner than later or if you’re in a position to wait it out without taking a lasting financial hit.
Whatever you decide, know that it’s okay if your needs change. Or your mind changes. Or some aspect of your personal situation changes. In fact, the only thing that is constant, in this job market and in life as a whole, is change. Rest in the fact that you are making the best decision you can with the information you have right now.
And when more change comes, pivot accordingly.