Cynopsis: Dealing With A Pay Cut

Article for Cynopsis email newsletter DEALING WITH A PAY CUT

By Mark Levine Cutting pay across the board, or throughout a department, is one of the most effective ways for a company to trim expenses without incurring the traumatic impact terminations would have on morale. It won't be popular but spreading the pain in an effort to preserve jobs will be accepted by most. If you're facing such a mass pay cut there’s little you can do other than express solidarity with your coworkers, and gratitude for still having a job.

Targeting an individual for a pay cut is an entirely different issue, however. Individual pay cuts are almost always aimed at the highest paid member of a class of employees. Productivity and experience are meaningless and not defenses when a company has decided that a certain category of employee shouldn’t be paid above a particular amount. Arguing, getting angry, or decrying the unfairness of the move won’t help. Invariably the cut will be blamed on economic factors. You'll be told it has absolutely nothing to do with you or your performance, and that the company wants to keep you. In fact, the move will be framed as the company trying to preserve your job.

Rather than tilting at windmills or obsequiously thanking your employer for saving your job, the best response is to use whatever guilt they feel as leverage to mitigate the harm to your stream of income. One option is to ask for the pay cut be phased in gradually, rather than all at once. For instance, if you're asked to take a ten percent pay cut, ask that it be turned into a two percent pay cut for five straight months. This will give you more time to adjust your personal finances.

Another option is to use the pay cut as a rationale for a flex time arrangement. Offer to work the same number of hours you do now, but in four days rather than five. Explain that the free day will give you an opportunity to make up for what they're taking from you. Suggest a trail period if you sense hesitation.