Taking a pay cut because of COVID-19? 5 top tips to come out stronger
Covid-19’s impact on the global economy has been relentless. The pandemic has devastated millions of livelihoods and led to job losses not seen since the great depression of the 1930’s.
It seems that wherever you are in the world, the workforce we knew is changing, and companies are making unprecedented moves to adapt and deal with the crisis. In the face of such corporate challenges, many workers are being asked to take a pay cut and those who are out of a job and looking for work are drastically reducing their salary expectations and are willing to reduce their salary by 50% to secure a job.
What would you do if asked to take a pay cut of 50%? Under current economic conditions some of us might be asked to take such pay cuts or risk losing your job altogether. Well, fret not — here are the team’s top tips for you to survive the setbacks, and come out on top.
1. Be Intentional About Taking Care Of Your Feelings.
One thing’s for sure — having your income reduced by a pay cut is not a minor event. It will be a short-term sacrifice on your part, and it might also affect your long-term goals. But before you begin rethinking your financial plans or fixing new career goals, make your emotional health a priority. It’s a vital source of strength in helping you sustain your relationships, physical well-being, and most importantly, your career.
When hit by a pay cut, it’s only normal to encounter feelings of anger or disappointment. Instead of rationalising them away, take time to process these moments and the thoughts which come with it. One powerful and compassionate way of caring for your emotional health is to let yourself experience these feelings, and focus on your inner dialogue. For instance, the words you tell yourself when you feel upset. When you pay attention to how you talk about your emotions, you shine a spotlight on how you relate to yourself, which influences your actions and interactions with others. Be mindful and engage in more positive self-talk, and work towards accepting your feelings - so that you can move on without being held back by unresolved fear or anxiety.
2. It’s Time To Budget.
Budgeting is all about being purposeful and keeping an eye on where your money is going. With a pay cut, your finances will undoubtedly take a hit, but planning early helps you get a handle on your spending, reduce your debt, and optimise your investing strategies.
Begin by creating a new personal budget, or reassess your current one! This is your starting point. Be sure to adjust your budget each month as your needs may vary, and expenses change with it. Always set some money aside for an emergency fund, and if necessary, don’t be afraid to trim the budget by emphasising less on dining out, and buying the necessities. Act with prudence now, and your future self will thank you!
Remember to give yourself grace — it might take you weeks (or even months) to get the hang of efficient budgeting. Though it might not be perfect the first time, you’ll get there! You could make checking in with your budget a daily habit until you are back in control of your expenses.
3. Explore Other Opportunities.
If you’ve found that you have some spare time, you might want to get to work on additional projects, depending on your set of skills and experience. Perhaps you have valuable copy-editing or web-design skills that could benefit companies looking for freelance work. This is also your chance to explore work aligned to your other interests — and take up smaller assignments in sectors you’ve always wanted to learn more about.
Moreover, you’ll be building up your portfolio and showcasing your various talents and networking with other professionals that can help you gauge your aptitude. This way, amidst the current challenges, and even as markets remain volatile, you’ll be able to supplement your income, pave your way towards a thriving career, and maintain a peace of mind.
Do take note: You might want to look through your current work contract and consult with your employer for consent if you are seriously thinking of pursuing part-time or freelance work elsewhere.
4. Be Informed About The Situation.
Even as the pandemic has thrust us all into a new normal, and even as the situation and environment around you is ever-changing, remember that your value is a constant. In certain situations, taking a pay cut may be a given. But, gauge the company’s current situation with perceptiveness, and factor in the conditions of the current economic climate. Could there be grounds for a pragmatic negotiation? Knowing your rights as an employee, the value of your contributions and where you stand as a part of the team will help you decide if you should negotiate.
Ultimately, if you do accept a pay reduction, get some clarity on the situation. Make sure that you’re in a position where your reduction is not indefinite or permanent. Of course, bearing this in mind, weigh up your alternatives! There are companies out there which are thriving, and part of being informed and realistic is to get introspective and ask yourself if you should start seeking new roles, take a break from work or stick it out for now.
5. Take Charge Of Your Career.
Recognize that companies are now looking for various ways to reduce expenses and save jobs, which make pay cuts part of the restructuring process. Keep in mind that your skills and experience have not fallen in value and that they are your stepping stones to a brighter future.
How can you take charge of your career growth in unexpected times? Be flexible and get ready to adapt — keep an open mind to the spectrum of career paths out there. Think about the various ways that your skills and experience can contribute to solving problems and fulfilling needs, which is at the core of every role. Along the way, look back at your career journey, and make a note of the challenges you’ve overcome, what you’ve learnt, and essentially, the needs that you have met in your role. Next, search for job listings across different sectors and industries that solve similar issues and meet similar needs. You’ll realise that your treasure chest of skills and experiences are more transferable than you think, and the current crisis becomes your prime opportunity to level up your career.
Here’s a Pro-Tip— want to know the key to staying competitive? Invest in your skills! Make time in your week to reflect and brainstorm about new skills that you’ve always wanted to pick up, or current skills that you would want to brush up on. Whether it’s getting an advanced certification in data analysis or in improving your understanding of computer programmes, upskilling empowers you with a competitive edge when it’s time to negotiate for a pay raise.
Many organizations are doing everything they can to stay afloat and keep people employed in what is an unprecedented economic situation - but that does not make it any easier when asked to take a substantial pay cut.
That will have a significant impact on standard of living and long-term contributions to retirement. But in situations like these it’s about being pragmatic and prioritising short term goals of surviving this crisis and coming out the other side strong and better than ever.
Half the Sky's mission is to supply the tools that can give every woman the ability to build a successful career and be fully prepared for the future of work. So, that they can lead a healthy, prosperous and more balanced/blended lifestyle of their choosing. By building your confidence, you’re setting foundations to empower yourself and your career. The world is your oyster, and it starts with you.
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