The idea of taking a pay cut is anathema for all working professionals-especially for finance execs used to handsome compensation packages. But many are finding their paychecks and pocketbooks to be much leaner this year. For those impacted by a slash in pay, unlike before, most are choosing to stay put, says Ken Murray, president of Mercury Partners, an executive search practice for front office finance professionals. He says it's just too difficult for finance pros to replace a position.
In an interview with eFinancialCareers, Murray says it's different if you're thinking of looking to a new employer. Then, he says, it's verboten to accept a pay cut, unless there are serious "extenuating circumstances." Most employers will fear that the prospective employee taking a pay cut is simply there for the moment or is in some way not as competent as their peers.
So, what are those "extenuating circumstances" when it's ok to consider a drop in comp:
-After a Layoff-Jumping for the first lowball offer is certainly a bad move, even after a layoff. But the job candidate also needs to assess just how long is too long to stay out of the job market, says Murray. If you've been unemployed for some time and you haven't gotten many offers, then maybe, just maybe, you're shooting too high. "It's like selling a house," he adds. "The longer you wait, the harder it gets. At some point, you'll realize-too late-that you passed on a good offer."
-Changing Locales-If you're moving to another area of the country, do your homework and check into the cost of living in your new city. If you're moving to a location that's much cheaper housing and tax-wise, then a drop in pay may not mean much. In fact, the pay difference may simply be an adjustment to the region.
-Moving into a Different Role or Sector-It's not always expected or wanted, but finance professionals sometimes need to shift gears and move into another role or sector. Sometimes, the writing's on the wall, to quote the old adage, and it's obvious your sector or department is soon to be the next dodo of the financial world. Other times, the once hot product is not so hot anymore, to say the least.
Lars Gloessner, manager of global markets for North America at Huxley Associates, an international recruitment consultancy, says that this is just what happened to those working in the structured credit space a few years back. "They had to take a step back and look for new opportunities," he says. "When you move into a different space, your knowledge simply isn't as valuable as it was before."