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Should Taking A Pay Cut Ever Be An Option?

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When it comes to accepting a job offer, for most salaried employees, pay packages are the primary focus. To have a fulfilling career, just a decent pay package isn’t enough. There are other factors that have to be taken into equal consideration such as job profile, designation, growth potential, compensation, and company reputation. At times getting to these goals may require you to take a pay cut. So the question really becomes, “Under what circumstances can you consider accepting a pay cut?”

Switching Industries

Changing careers is a bold move, especially if you have already put in enough years in one industry. Obviously, you can’t expect a pay hike at a new job in a new industry with zero to basic relevant skills in your kitty. You’ll have to learn new skills and put in more years before expecting a pay hike.

Moving Locations

You may wish to spend more time with your loved ones and make a decision to move to your hometown or take up work from home. Pay differs with location depending on the cost of living in each city. To strike a good work-life balance, it becomes necessary to accept a pay cut if you’re working from home or the city you’re moving to is less urban than the previous one.

Related: Best Countries Around the World for Women to Work In

Learning New Skills

If a new job offers you the opportunity to learn new skills and has better growth potential, then no doubt you can compromise on your pay initially in order to become an expert in your field. You can always demand a higher pay for your expertise in the future.

Read also: Best First Jobs or Internships to Have in 2017

Better Compensation

Accepting a pay cut may not be a bad move if your compensation includes more paid holidays, better annual performance pay, signing bonus, etc. Your base pay may be lesser than what you’re used to getting but you can enjoy more perks such as good more vacation time, better performance incentives, travel allowances and such.

Being Part Of A Reputable Organisation

Have you ever dreamed of working for the top organisation in your field? What if you manage to get through the interview at your favourite company but they offer a lesser pay than your previous company? Should you accept it? Sometimes, you’ve to make compromises to realise your dreams. Same goes for having a dream job.

Read also: What Are Singapore’s Careers Of The Future 

Starting Your Own Business

Starting a business or leaving your current job to pursue your passion in a different field can result in a drastic pay cut. However, since you’re following your dream, you will have to be prepared to do anything to make it happen. To have a fulfilling career, you must do what you like, even if it means taking a pay cut.

Read also: The Complete List Of Money Saving Tools In Singapore

To Hold Onto Your Current Job

There can be scenarios wherein your company is laying off people due to recession or budget cuts. You may have to accept a pay cut to hold onto your current job especially because you know that the market is currently not conducive to new jobs. Some pay at the end of the month is better than no pay. You can accept a pay cut for the time being until you have shored up sufficient experience and skills to apply for a better position that pays more.

In the end, you have to consider if accepting a pay cut now will result in a better payoff later. In the meantime, you’ll have to learn to live with a pay cut by managing your finances suitably and planning ahead for a fulfilling career.

This article first appeared on Bankbazaar.sg

BankBazaar.sg is a leading online marketplace in Singapore that helps consumers compare and apply for the best offers across all financial products: personal loans, home loans, credit cards & investments. Like BankBazaar Singapore on Facebook to discover tips, clever hacks, and deals to save and earn you more money.

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