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Career

Why it’s not always a bad ...

C / Career

Why it’s not always a bad thing to accept a lower salary

Sometimes, it’s not all about the mone

by SUE-ANN TAN, JOANNE POH  /   October 7, 2020

Hold up… It’s not always a bad thing to accept less pay

Credit: 123rf

Former manager Lau Disan was doing well before the pandemic hit, but she has had to take a 50 per cent pay cut after switching from the ravaged retail industry to early childhood education.

Her experience is far from rare: Many job seekers are now willing to accept lower salaries because of the tight employment market and difficult economic conditions brought on by the coronavirus, experts said.

Ms Lau, 46, was a retail manager for 15 years in the jewellery trade and earned over $4,000 a month. Now, she is a trainee childcare educator at Kinderland earning half that.

But she said the pay cut was acceptable because she is still undergoing training under a Professional Conversion Programme for pre-school teachers.

“I have zero prior experience in early childhood education,” she noted. “In order to get into the industry, I have to lower my expectations, accept that I am learning from scratch and start afresh.

“I benefit from working half a day, and training to gain a professional diploma at the same time. It is a win-win for employees and employers.”

She added that she also sees it as an opportunity to further her education while having a job and feeding her family.

A Randstad Singapore survey in June and July found that over 50 per cent of respondents were willing to take on jobs with a lower salary.

Randstad managing director for Malaysia and Singapore Jaya Dass said: “It is clear that the majority of companies have implemented some levels of cost-cutting measures this year.

“(Therefore) those who’ve been retrenched or who are at heightened risk of having their job scope changed significantly are voluntarily revising their salary expectations when looking for a new employer.”

median salaries

She added that job seekers should not just focus on salary or bonuses. “As long as the remuneration is fair and matches their expectations, candidates should also try to consider the other benefits, such as healthcare and work-from-home allowances.”

Nearly 50 per cent of 373 respondents in a poll conducted by employment portal FastJobs in late August also said they were open to taking positions offering less than their last salary.

It found that 39 per cent could stomach a drop of up to $200 a month, while 19 per cent were even open to accepting a fluctuation of $1,000 or more.

FastJobs general manager Lim Huishan said: “Generally, people are more flexible with salaries now as they recognise that it’s difficult to get a job and also that in trying out a new industry, taking less pay than their last (salary) may be necessary as their previous experience is not as relevant.

“There are also factors like age and personal commitments that affect their willingness to take lower pay in exchange for flexibility.”

Data from the platform showed that retail assistant was one of the roles with the greatest salary fluctuation in the period June to August, compared with the same period last year, with the median pay dropping $400.

Cashiers’ median salary dropped by $300, while sales executives saw a dip of $200.

But the median salary of drivers increased by $100 and that of patient service associates went up by $200.

Adecco country manager for Singapore Betul Genc noted that candidates for sales and marketing positions would accept an average pay reduction of 5 per cent while job seekers for white-collar roles in supply chain and engineering are open to a cut of 10 per cent in exchange for stability and security.

But other industries might actually see base salaries rise.

Manufacturing firms, for example, had to attract local talent in the interim to replace workers from Malaysia when border restrictions kicked in.

Workers in sectors such as technology, healthcare and life sciences, accounting and finance, and some sales and marketing roles also might expect salary hikes, said Ms Genc.

ManpowerGroup Singapore country manager Linda Teo agreed that salaries have increased in sectors with growing business demands, such as in pharmaceuticals, but pay for jobs in tourism and hospitality has dropped.

Salaries in the oil and gas sector have taken a hit as well due to the decline in air travel, she noted.

Ms Teo said: “Job seekers with niche skill sets highly sought after in the market continue to expect a higher pay but are more willing to negotiate the increment percentage.

“Meanwhile, candidates who are applying for corporate or rank-and-file roles are more flexible as there is more competition for those jobs.”

A spokesman for the Institute for Human Resource Professionals noted that mid-career switchers who have gone through past economic downturns may expect lower salaries than what they received at their previous jobs.

Job seekers should stay resilient and flexible, viewing their career as a long-term investment, Ms Genc advised.

“While the salary might be slightly lower, the job will help you re-enter the workforce as quickly as possible, ride you out of the crisis, and professionally, there may be other learning and development opportunities within the organisation.”

She added that job seekers can prioritise the learning experience as well. “We would also encourage being open to opportunities even if it is a temporary or contract role, as it helps with gaining new skills and experience. The longer a job seeker remains out of work, the lower the bargaining power.”

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https://www.herworld.com/gallery/women/career/accept-lower-salary-less-pay/
Why it's not always a bad thing to accept a lower salary
1. The company’s reputation would give your CV a boost
image
It’s amazing what a reputable company’s name can do for your CV. Nobody gives two hoots if you were the COO at Ah Pek’s Trading Company Pte Ltd. But put a big MNC’s name on your resume and all of a sudden, you become more employable.

For this reason, it is often a good idea to accept lower pay to get a good company name on your CV—just be sure to move on when the time comes.

123rf
2. The job can be used as a stepping stone to a better one
image

Just because your job pays you peanuts right now doesn’t mean you’re stuck in low paying roles forever. In fact, a low paying job can sometimes be used as a stepping stone for something much better.

For instance, many bank employees take on contract roles in which they’re paid less than permanent staff for a shot at being converted to perm staff themselves. Those who aren’t converted still have a higher chance at getting a similar perm role in a different company.

You can also leverage the skills and experience gained in some low paying jobs to leapfrog to a better job later on. Just remain at the job for long enough to learn how things are done, and then apply as an “experienced” hire to another company when it’s time to move on.

123rf
3. Better work-life balance and flexibility
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In Singapore, there are lots of very well paid employees who have zero life outside of work. For instance, if you’re a lawyer, “good” work-life balance can mean leaving at 7pm or 8pm every day. Poor work-life balance means being at the office till after midnight.

In such circumstances, it may be necessary to accept a lower paying job in order to enjoy better work-life balance. In a 2015 survey, 57% of Singaporeans said they’d pick better work-life balance over higher pay, so there you go.

Employers who are willing to offer a high degree of flexibility might also be worth considering, even if they’re paying less than those who insist on lots of face-time. If you’re allowed to work from home three days a week, it might be worthwhile taking a pay cut, especially if the alternative is to sit at the office from 9am to whenever the boss leaves every night.

123rf
4. Receiving stock options
image

Companies sometimes offer their employees stock options in exchange for a lower salary. In fact, receiving stock options has become a defining part of working for a start-up.

In reality, you’re taking a gamble, as your stock options are worthless if the company goes nowhere or, worse, tanks. Still, if this is a company you believe in and you’re committed to doing your best, taking those stock options will totally change the way you work. There’s also the (admittedly) slim chance that your company will IPO and you’ll find yourself becoming an overnight millionaire.

Big, publicly-traded companies might also dangle equity as part of the benefits. Granted, you’re unlikely to see your $5,000 worth of shares balloon to $5,000,000, but on the flipside the chances of your stock becoming worthless are low.

123rf
5. You’re likely to be promoted and given a raise in the near future
image

A job that’s paying a less than desirable salary might be worth considering if you foresee a promotion and/or pay rise in the near future.

This can happen when you join a fast-growing company that’s about to create more job openings than it can fill.

You might also be able to anticipate a promotion if you’re slightly overqualified for the role you’re being hired for, and just need a few months to gain the skills that will haul you up onto the next rung of the career ladder. But just to be sure, this is something you want to discuss with your potential boss before you sign that employment contract, not after.

Versions of this article were originally published in Moneysmart and The Straits Times.

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