It can feel like a step backwards when your salary goes down, but this is not always the case.
In a straightforward world, your career journey would bring you steady promotions, transitions and, of course, salary increases with every move up the ladder.
However, it’s not a perfect world, and sometimes we have to make certain sacrifices in order to pursue a more important cause.
It’s not uncommon for employees to consider taking a new job or a new role that means they end up with a pay cut. There are many layers to this decision that will not only prove the decrease to be a good thing, but, in the long run, could lead to greater spoils down the line.
Here are just five things you should think about when considering taking a pay cut in order to move to a new job.
Your actual income
When you compare your current annual salary to your potential new salary, the numbers will be very clear. However, what makes up your actual income and expenditure can be very different, depending on where you work.
For example, are there any additional bonuses with your new job? Will your commuting costs go up or down? Do you get any money-saving perks such as free lunch or car parking?
All of these things might actually make up for your supposed pay cut and could even leave you better off in the long run.
Your chance of increases
You might be on more money now but if you stay in your current job, will you continue to get salary increases?
You could actually be at the top of your salary ceiling in your current organisation, with no room to scale up.
However, if you take a pay cut to move to a bigger organisation with more opportunities to climb a ladder, you could be much better off financially in five years’ time.
Your dream job
Whether it’s the right industry but the wrong company, or it’s a completely new industry that you would like to jump into, sometimes a pay cut is inevitable.
This can be especially true if you’re lacking in some experience for the industry you want to work in.
However, you can’t put a price on working in your dream job, and if you have to start a little further down the ladder in order to climb the right one that will lead you to your perfect role, then so be it.
Your work-life balance
Sometimes, the higher the salary, the harder you have to work and the later you have to stay. You might love your job, but sometimes the sacrifices of time at home or a decent night’s sleep are just too high.
Taking a pay cut in order to make sure you can leave work on time and avoid getting burned out can be one of the smartest career choices you’ll ever make.
If you’re worried about taking a pay cut for a new job, make sure you consider the value you’ll get back in terms of time at home and a stress-free life.
Your personal development
Not unlike hitting the salary ceiling, you could also be in danger of hitting the learning and development ceiling in your current organisation.
Yes, you have a great salary and you love your job, but have you learned all there is to learn about the role? Have you reached your absolute full potential?
One of the key trends of the future of work is the importance of upskilling and lifelong learning. If you feel like you’re no longer learning, maybe it is time to move on to something else, and that could mean taking a pay cut.
Once you’ve crunched the numbers and made sure it’s sustainable, it might be the best decision you ever make.