Okay, so you have decided that you are ready for a new opportunity. Maybe you are coming out of unemployment or perhaps you are leaving a different job. In either case, pay will certainly be a major factor in your decision about a new job.
Generally, as you progress through your career and pick up new skills and experience, you feel that you should be rewarded with improved positions and improved pay. You have worked hard to have the skillset that you do so why would you settle for less money than you were previously making? But when might taking a pay cut actually be worth it? And when might it not?
First off, there are a lot of factors that will inevitably play into your decision making including pay, location, job position, hours, company and so on. An important process to go through while conducting your search is ranking each factor. For some people, location and company culture might be more important than a job title and pay, and for others, it may be the opposite. First thing you need to know is where each ranks for you because if the pay is not an important factor at all, taking a bit of a cut will not be a problem.
For most though, the pay is likely to be a deciding factor: you may have a family to take care, a house to pay off or dream vacations you need to save up for. Here are 5 times when taking a pay cut might be worth it:
MAKING A MAJOR CAREER CHANGE
If you are planning to make a drastic career change, you may have to take a bit of a pay cut. Sometimes skill sets do not fully transfer from industry to industry no matter how close they might seem. If you have never welded before and you only recently received welding training and certification, you should not expect to enter the industry at an expert level pay rate. Even moving around within the same industry can expect pay cuts especially moving from a large corporation to smaller, locally owned companies.
Taking pay cuts in these situations is worth it when you desire to make those career changes. If you are just searching around for openings from time to time, taking a pay cut will not be as enticing.
A GREAT OPPORTUNITY PRESENTS ITSELF
As was just mentioned, taking a pay cut if you are just checking out openings normally is not enticing. However, from time to time a great opportunity might present itself and although you were not necessarily seeking out a major change, the move could jump-start or revive your career. Great opportunities are different for everyone. For some, it might mean getting in with a new, small company that is about to take off. For others, it might mean the opportunity to move closer to friends and family. You know what the perfect job looks like for you and taking a pay cut when it presents itself might be the best move you could make.
YOUR CURRENT POSITION IS NOT ENOUGH ANYMORE
Your current position might take a toll on your personal life in a number of ways: stressful conditions, tough boss, long hours and so on. If the negative side of your current position seems to outweigh the positive side, you might need a career change to rebalance your life. Work is important but your mental health and happiness should never come secondary. Taking a pay cut and hitting the refresh button might be the best thing you can do for yourself.
Or perhaps you have climbed as high as you can in your current role and there is nowhere else for you to go. While this is a great accomplishment, you may still want more out of your job. Taking a pay cut to expose yourself to those higher potentials will help.
STARTING YOUR OWN COMPANY
This one might seem obvious because starting your own company almost always means taking a pay cut, to begin with. But, if your dream has always been to own your own shop or invent something new, taking a pay cut to follow those dreams will be easy to commit to. Plus, there are pay upsides to owning your own business when things go well.
IT IS THE BEST THING FOR YOUR FAMILY
Maybe your current role is your dream job and there are no entrepreneurial desires or greater opportunities presenting themselves. Might taking a pay cut still be worth it? Yes if there is a greater mission involved: your family. Your husband or wife just got offered their dream job in a new state, what do you do? Your family back home need your help, what do you do?
These are not easy questions to answer, but they nevertheless occur. Sometimes taking a pay cut to relocate for your spouse or your kids is the best long term option for everyone. And sometimes moving back home and taking a pay cut to be with sick family members is necessary as well.
None of these situations are sure-fire reasons to take a pay cut. Like we mentioned before, there are several other factors that need to be considered. Know your financial situation and talk with family and friends to weigh out all the pros and cons before committing to a major career change.