With the economy still continuing to be in a state of slump with no visible signs of recovery, most business establishments and corporate organizations are resorting to downsizing in an attempt to rein in spiralling operating costs. The fact that your organization’s annual revenues have come down sharply is a palpable sign of the economic slowdown. If you still have your job, you can consider yourself lucky as many people all around are losing theirs.
However, if your superior or employer calls you to his chamber one of these days and tells you to accept a pay cut, do not be alarmed or shocked. Accepting or adjusting to a pay-cut is in any case better than losing your job. Nevertheless, an unexpected pay cut is also not without its ramifications. The following aspects will help you cope with an unanticipated salary cut.
Don’t rush in to accept the offer
You accepted the job offer only after you received a copy of the terms and conditions of employment. That document surely has a clause which clearly stipulates that you cannot be compelled to accept any proposal from your employer before you weigh the pros and cons of the same. So, when you’re informed about a slash in your salary, it is up to you to accept it or reject it. Do not act on an impulse rather take your time in coming to a decision. Do not give your consent verbally or sign any document. There are good enough reasons for not agreeing to a salary cut on the spot.
Accepting a pay cut will not only have an adverse affect on your laying-off package in the future (if it is impending) but also impact compensation benefits payable to you with regards to your entitled sick leaves (that you’ve not used up) or paid leaves. Figures for your compensation package are worked out on the basis of your present salary. Furthermore, a reduced salary will also mean that your potential to bargain for a good salary will be considerably reduced as far as your future employment is concerned.
Consider the pros and cons scrupulously
Sooner or later, you’ll get reconciled to the fact that you don’t have a better alternative than accepting a pay cut. Once you’re mentally prepared, you should go about exploring the issues or aspects surrounding the salary cut. You should ask the following questions to your supervisor or employer:-
As far as you’re concerned, you should ask yourself how badly you require this job. Do you think the company will be able to make a turnaround? Should you start looking for a new job?
Always give a shot at negotiating
After you’ve reviewed the facts regarding your pay cut, give a shot at parleying on certain specifics related to your job. For instance, you can bargain for lesser working hours on any given day or a reduced working week. Discuss with your employer if you can work from home on certain days. Ultimately, get everything in writing and ascertain whether your original or old salary would be reinstated in the near or far future and also if your lost wages would be reimbursed.
*Salaries are subject to change with time and may vary with company policies, general economic scenario and other factors mentioned above