Even if you’re putting in the right amount of effort at work, sometimes this isn’t enough to prevent a pay cut. If your employer is facing tough times, due to the broader economic landscape or because business isn’t going too well, one of the first steps they may take is to reduce salaries across the board.
This situation is definitely unpleasant. But you can rise above this setback and keep your career on the right path by making pragmatic decisions. Here are some practical tips to improve your financial planning and boost your career trajectory following a sudden pay cut.
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Review your new responsibilities
If you’ve taken a hit to your salary, ask whether your responsibilities will also change. Although some businesses will expect you to do the same work for less, realigning your position’s duties with your reduced salary is a productive way to manage a pay cut.
Perhaps you can pause or stop doing some of the extra tasks you took on outside your original job description. You could also request a new job description that simplifies your responsibilities and eases some of the disappointment that comes with a salary reduction.
Negotiate other benefits
Don’t be afraid to negotiate conditions around your pay cut. While you might accept that your salary has to be reduced for the good of the company, there’s an opportunity to discuss other benefits that ensure you don’t feel so hard done by.
This might include more days off or extra vacation time on top of what’s currently included. You might also negotiate less time at the office or ask that your employer contributes to training programmes that improve your talents. This way, taking a pay cut won’t seem so negative.
Adjust your budget
Once you’ve finished negotiations with your employer, carefully review your personal budget alongside your new income to see where you can save money. Depending on the extent of the salary reduction, this could require small tweaks or major changes to your lifestyle. Either way, you must not ignore this step of the process.
Add up all your non-negotiable expenses, such as your mortgage, loans, transport and grocery bills, to ensure you earn enough to get by. Then review where savings are possible, including streaming subscriptions, unused gym memberships and delivery services. A wiser approach to your budget could save you hundreds every month.
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Start a side hustle
Earn back lost income with a satisfying side hustle. In 2017, more than half of Singaporeans had a side hustle that helped them pay the bills. Think about what skills you have and how these can apply to a casual gig that ensures your overall income doesn’t take a hit.
For example, professionals with writing, photography or graphic design skills could use their expertise to work for clients as a freelancer. Meanwhile, people who are academically inclined could consider tutoring.
Look for a new job
Although it’s important to stay grounded about your employer’s economic situation, finding something more suitable in the job market is an option. You don’t have to remain in a role where you feel undervalued.
Rise above a pay cut
No employee wants to take a pay cut. However, adopting the right mindset during this time ensures you make the best decisions for your career progression and financial planning. With a forward-thinking and mature approach, you can navigate this challenge and come out the other side with better benefits, a rewarding side hustle, or even a better job that provides you with greater satisfaction.