CXO

Should you settle for less money?

As competition heats up in the job market, many of you are facing a tough decision: Do you hold out for a position offering a decent salary or accept a job for far less than you used to make? Career experts Wade Mitchell and Tim Heard offer their advice.


You’ve been searching the job market for a while, and finally you get an offer. Not a great offer, but it beats your current income. Whether you take the job depends on your particulars—you might not have a lot of options. Regardless, it helps to be aware of how you'll be affected if you accept a salary that's much lower than your experience calls for. Settling for less might have a greater impact on your situation than you expect. Consider the following example and then see what career experts Wade Mitchell and Tim Heard have to say about accepting a drastic drop in salary.

Help wanted
Here’s a sample ad pulled off a national job board:

Wanted: Programmer II
Requirements:
Degree in MIS or Computer Science
COBOL (especially MicroFocus COBOL)
C++ with an interest in learning C# and .NET
SQL Server and Access
Other relational database experience desired but not required
5+ years experience in software development and programming

The job duties also include documentation, the ability to create presentations, and experience working with clients. Sounds like they’re looking for a jack-of-all-trades to develop for new endeavors and support legacy applications. What would you guess the company is offering for a salary range—$65,000–75,000? Not even close. The posted pay rate is $45,000–50,000! The company will never hire anyone with that skill set for the proposed rate, will they? According to our two career specialists, they most definitely will.

So you could face the very real question of whether to accept essentially the same job you had before, for 30 percent less pay. It's a complicated quandary that could mean several years of career repercussions for you—not to mention feeding into the perception of supply and demand for the industry as a whole.

Working for government cheese
When considering the consequences of accepting less money, technical recruiter Tim Heard takes a realistic approach.

“My opinion is that in these times, even working for government cheese should at least be considered, if it will help feed one's family. For the time being, there has been a substantial shift in the demand for technical professionals, so the competition for each position is extremely fierce. Since salaries are a product of supply and demand, market forces have begun pushing wages down.”

Heard points out that legacy expectations must be abandoned because the market has changed. Development positions no longer pay what they did two years ago, and salary comparisons must be made accordingly.

He also encourages people to weigh an opportunity for its full worth and take responsibility for changing their lifestyle to match reality.

“The developer who turns down a job offering what he or she considers low compensation risks going a long time without being offered another opportunity. On the other hand, accepting such a position locks the candidate in to a new standard of living, and significant changes will have to be made to spending patterns. Of course, the other downside is that accepting such an offer eliminates the possibility, even if it's extremely slim, of obtaining another $75k position. However, my experience in the past two years has been that a lot of people have failed to understand the degree to which the market has shifted and have bypassed many good offers, only to later regret it.”

Ultimately, Heard suggests that living in accordance with opportunity is the only route to take—and opportunity is not what it once was. The market drives individual compensation, and a rebound in the economy will force companies to improve pay rates or risk losing experienced individuals.

Read more career advice from Tim Heard


Stick to your guns
Career consultant Wade Mitchell offers another angle. When negotiating salary with a company, he says you should be aware that companies will try to take advantage of the abundance of available candidates. If you accept a job without attempting to negotiate, or even to take a position that doesn’t supply adequate compensation, you could be helping to create an even bigger problem.

“It works a lot like gas prices. If word gets out that pay rates can drop, [companies] move quickly to study and drop them but are slow to bring them back up until market pressures force them to do so.”

Mitchell maintains that it is the candidate’s responsibility to prevent this deflation from running rampant. Rather than wait for the market to recover to reasonable rates, you must maintain higher pay demands. Salaries will increase as job opportunities become more readily available, and if you don’t settle for less now, you’ll be better positioned to continue on your career path in the future.

“The burden falls on the job seekers to mandate a market increase. If the pay is going up, so are the opportunities, so skilled candidates should stick to their guns more than ever. Until two or three candidates decline a job because of money, there is no reason for them to change it, for, truly, that is still what the market will bear.”

In Mitchell’s scenario, companies will be forced to pay more for quality individuals, and the job seeker never has to deal with the effects that a lower pay rate might have on future positions.

Career advice from Wade Mitchell


Weigh the consequences
Clearly, these two views support different strategies. One suggests you should do whatever you can to survive in the industry. The other advises you to maintain a high level of expectation and improve your chances down the road.

Which path you take may depend on one thing—the luxury of time. When time is short, we'd all probably take lower pay to do the same job we did two years ago. But if you can hang on, the smart move might be to wait and see what demands for your skills the future holds.

The correct approach probably lies in a combination of these two solutions. You must weigh several factors, including the status of the technology you specialize in, your level of continued education, and the number of nights in a row you can eat ramen noodles without losing your mind.

Which strategy is better?
Future repercussions may seem of little consequence compared to your immediate needs, but two years from now, you may be wondering if you made the right choice. What if you decide you can afford to be selective, and no opportunities come your way for the next several months? Would you have been better off to settle for less and work your way back up, or are you better positioned to land a high-paying position even though you've been out of work for a long time? Post your experiences, thoughts, comments, and questions in the discussion below and see what course of action your peers are taking.

 

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