It’s nice to think that your career and compensation will always move upward as you gain knowledge and experience. In reality, that’s not always true.
At a time when people are more willing to job hop than ever, it’s possible that not every leap will result in a salary bump. In fact, some leaps may actually mean a salary decrease. And that’s ok.
Here’s when you should consider taking a pay cut.
1. Your company is going through budget cuts and you want to keep your job.
Many companies during the Great Recession were forced to lay people off as a means of controlling costs. While the economy may have recovered, there are always going to be companies going through hard times, and yours may be one of them. If you’re offered a pay cut and you can’t afford to lose your job, it might be worth considering. For some people, the time and effort required with looking for another job may not be doable, and sticking around may be a better option.
2. You want to change careers.
This is one that resonates with many people — you have a great, well-paying job, but you want to do something entirely different. In cases like these, it’s ok, and sometimes necessary, to take a lower salary. Why? You may have climbed the ranks in your industry, but if you lack the transferable skills to move into a new industry, you’ll often have to start at a lower rung. You may even have to enroll in a training course, or pursue necessary certifications, which could take you away from leaping into something full time right at the start. If you are willing to invest the time and learning necessary to get yourself into a new career, and you can see the end goal, the short-term pain will be worth it.
3. You’re burnt out and want to focus on you for awhile.
Nearly half of all people say they feel burned out, according to the latest reading of an ongoing query by Comparably. If the demands of your job have become too much, or the demands of your personal life have become to much, it might be worth considering something more enjoyable, even if it pays you less. Today, so much research exists about the negative effects of burnout; if you can afford a bit of a hit to your income, taking a lower salary may be the best thing you can do for your health.
Related: What to Do When You Feel Burned Out
4. You’re starting your own business.
You’ve been hatching a plan to start your own business, or perhaps you’ve even started a side business already. Either way, you need more time and energy than you have right now. Your best bet may be to consider a role within the company that is less demanding and lower paid. While the dream for many entrepreneurs is to go off on their own, many entrepreneurs advise starting a business while working full or part-time for an employer — if things don’t pan out, you’ve got a built-in safety net.
5. You want to move to another city.
Orchestrating a move to another city, state or country is difficult. If you’ve decided to move, it may be wise to reevaluate the type of salary you want given the cost of living you’ll be experiencing. Many times, people who move to smaller cities are shocked to see how far their dollar stretches. If you’re on a New York salary now, you might not find something as big when you relocate to Memphis, Tennessee. Use sites like Comparably to determine what salary is reasonable for people in your location and experience, keep an open mind and judge your expenses realistically.
