How to Deal with Pay Cuts

Recession could easily affect fresh graduates in their career and financial status. As a fresh graduate, they would have to contend with unemployed who will have more experience and education.

This means their chances of getting employed are now a lot less. They even have to deal with the fact that companies are rarely hiring which will greatly increase the difficulty in getting a good job. As long as recession is here, the challenge of finding a job will always be there.

If, you are one of the fortunate fresh graduates who landed a good job, more bad news is still coming your way. Fresh graduates will usually be hired for an entry level position. These positions could be cut off from the operations anytime the company needs to deal with financial problems.

But there are times that the company would really like to retain your services. What they would do is to implement pay cuts to ensure that everyone stays in their position while avoiding the closure of the company. This is actually a better decision rather than completely terminating their employees.

Through this practice, the company would retain the original workforce and will be back in operations in no time since everyone is still there. For the employees, this also presents the opportunity in showing loyalty. As there are no jobs out there, it’s also a lot better to have pay cuts rather than live on unemployment benefits from the government.

Asking for Alternatives

If you are presented with a pay cut, do not just say “yes” immediately. Although your company appreciates your loyalty and dedication to the job with less salary, you still need to look out for yourself. A pay cut could debilitate your finances and you’ll never be able to purchase the products you need and even your preferences.

But money is not the only payment you could enjoy form the company. Negotiate if you could have more benefits from the company since they are cutting the monetary side. Benefits such as better coverage or more coverage for extended family members could be a good deal for the company.

You could even negotiate to cut the number of hours of work. This will give you more time to look for another of work which could supplement the pay cut that you have just experience. Most companies will understand this. If you are company unfortunately will not allow this, negotiate if you could work for less hours a day until you land a part-time job.

Aggressive Budgeting

As soon as you feel that the company will be implementing pay cuts, plan out your budget. A good way to budget with a pay cut is to think of the worst case scenario. Pay cuts could range from 10% or even up to 40% depending on your salary. Think within this range so that you can properly have a contingency budget planning in case something like this happens. By preparing for the worst case scenario, pay cuts to a lesser extent will be easier to deal with.