With pay expectations ratcheting downward, jobless professionals need to consider the possibility of working for less. The key question is, "Less than what?"
Commenting on a recent eFinancialCareers News story, one user wrote: "It's bad out there. I guess the only thing left is to put out resumes saying that you'll be glad to fill the role of any existing finance executive for half whatever they are being paid now."
Clearly, that approach won't improve your odds of getting an offer. Perhaps it would, if you're applying to mow someone's lawn or mop their floors. But for a professional role, any viable for-profit employer will choose the best worker over the cheapest - regardless of economic circumstances.
More familiar is the opposite extreme: the proud individual who rejects "returning to the bottom after being at the top." Or the one who grouses that employers are "low-balling," and holds out for more than today's market will pay for his skills and experience. If your expectations are too closely tied to your earnings history, you might repeatedly shun openings you qualify for because the compensation falls short. In that case, who is out of step? Employers - or you?
Option Holder's Dilemma
I don't mean to dismiss the long-term costs of accepting a major cut in salary. Whatever compensation level you accept now automatically sets the baseline for your bonus and annual reviews, as well as for what you can realistically seek in your next job after that. So it's probable you will feel the financial sting for years - perhaps long after the job market has recovered.
But the alternative of holding out for a better offer entails hidden costs, too. As the months stretch out, your skills will surely fray around the edges. Even if you stay sharp through workshops and project or volunteer work, potential employers are likely to perceive your skills, and even your business relationships, as having dulled compared with a rival candidate who remained employed. The longer you're unemployed, the more your market value will diminish.
A friend of mine captures the dilemma neatly with the phrase, "call option value." By holding out for the rare opening that could utilize his full skill-set, he maintains the possibility of picking up his career where it was interrupted by layoff (i.e., at comparable levels of responsibility and salary). Taking a much lower-paying job would surrender that option. On the other hand, every option has an expiration date, and the option's value decays over time.
Current conditions dictate that some financial professionals simply will not be re-employed at levels of pay close to their last previous job. Outside of trading and staff positions, bonus expectations for most front-office roles are sliding further from 2008's depressed levels, Johnson Associates concluded from major banks' first-quarter reports. The need to adjust expectations is particularly salient for professionals in transition, whose last bonus may have been awarded for 2007, when Wall Street bonus pools hovered near record highs. And while taxpayer-aided banks are raising salaries to offset government-imposed bonus limits, those raises appear confined to managing directors and senior management.
How to Start Over Without Appearing Desperate
Even if you're willing to step down the ladder and work your way up again - and you find a prospect who doesn't reject you off the bat as "overqualified" - the challenge doesn't end there. There is still the delicate matter of discussing pay without seeming to cheapen your value.
Recruiter and author Nick Corcodilos tackled this issue recently on his "Ask the Headhunter" blog. He likens career change to jumping from a tree branch that is rotting to one that's healthy. While the jumper backtracks to a lower starting point on the new branch, he raises his prospects of eventually climbing further by leaving a branch that would soon end or fall off the tree.
Corcodilos recommends a job-seeker present such a decision as an investment in long-term career growth: "Every step along my career is an investment, and if I can see profit at the end of the tunnel, I'm willing to go in." While Corcodilos' example referred to changing careers or industries, it also seems apt for any professional whose previous career path is blocked through no fault of her own.