Should I accept a lower salary?
Should you ‘stand your ground’ on the dollars – or should you accept less?
Most career coaches would probably say quite firmly that you should do your research, have a clear understanding of what your skills and experience are worth in the current market, and do everything you can to achieve the same or a higher salary than in your last job.
And I would agree with that advice, or I would have until the last few months. For now, the game seems to have changed.
More and more as I coach senior managers through a variety of career transition and job hunting scenarios I am hearing that they are experiencing very real downward pressure on their salary expectations. It’s tough out there.
So why stand your ground in the first place?
The rationale for this is quite simple.
- The employer almost always has “something in reserve” in order to secure their preferred candidate. They almost never make their very best offer in the first round of negotiation. Without being greedy, why just give away salary or other benefits you could have won through holding your nerve and negotiating sensibly?*(Example below)
- If you accept a lower salary you must recognise that this will be the basis that will drive the value of other benefits that are often linked as a percentage of your base pay.
- If the drop is really significant, this will have a major effect on how you are positioned when you ext enter the job market – you will find it hard to recover lost ground.
But has the market shifted?
It looks like it may have done just that, certainly in Australia and the USA. Many of my clients, and those of my career coach colleagues, are finding it very difficult to match the high salaries they have been accustomed to. This is particularly true for senior managers with long years of experience in banking and financial services.
Longer time to landing
We are also finding that the time to find a new executive role has stretched out considerably. At a salary of AUD200K or more it used to take between 6 and 9 months. This is now more likely to be 8 to 10 months or even a full year.
There seems to be very much increased competition of high calibre candidates for the few roles available. This is contributing to a perception amongst employers that they can find A-grade candidates at B-grade prices.
So while it will still be dangerous to accept too big a drop (for example more than 20% perhaps) for the same reasons I have already given – you may need to consider a flat move or small step backwards*(Example below).
Compare this with the financial cost of staying on the market for the rest of this year with zero income.
*True story: One of my clients very recently landed a good role, quite quickly, mostly through his network connections. While the salary on offer was substantially lower than his previous earnings (a little over 20% down) he was still able to negotiate a final package about 12% higher than the first offer. The upside for him was a quick return to the workforce and very little if any interruption in his income. The role also reports in at a senior level so it hasn’t done his future positioning much harm.
What do you think?
Leave a comment and let us know whether you have run into this in your own job hunt. Maybe you have had a different experience or can give us feedback from the employer’s point of view? What is it like in markets outside Australia and the USA?
P.S. If you haven’t read Dr Spencer Johnson’s outstanding book on dealing with change “Who Moved My Cheese?”, I strongly recommend it. You can find information about it here . I won’t earn a commission if you decide to buy it – it’s just high on my list of “must reads”