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7 Reasons Why Accepting a Low Ball Salary Offer is a Bad Idea

February 2, 2016

Guest Blog by Bill Fitzgerald, Founder/Managing Partner of Exec Careers DC, Associate Member of Maryland Nonprofits

Read the original blog here.

You’ve just been through an arduous hiring process and at last, you are looking at an offer! Unfortunately, the offer is less than what you expected and you have to decide if taking a cut in pay makes sense.

To be fair, there are times when taking a pay cut might make sense. For example:

  • There is an industry downturn where many offers are lower than in the past
  • You are changing industries and you need to acquire a new set of skills
  • You are moving into a nonprofit organization or academia, which traditionally pays less
  • You are willing to trade-off compensation for better work-life-balance
  • This is an organization you really want to work for and it requires you to take a step back to get your foot in the door
  • If you are unemployed and your personal obligations leave you with very little choice
  • You are ready to slow down some. Maybe you are getting closer to retirement and simply want to stay busy as opposed to keep climbing the corporate ladder
  • For what ever reason, you are miserable in your current job and it is starting to impact your life outside of work
  • When you can negotiate other “perks” so it makes sense personally and professionally
  • When you’ve hit the top of your range with your current employer and you’re looking at years of going without an increase

All of these are valid reasons and worthy of consideration. However, there is another side to this argument that needs to be considered very carefully.

  1. When you accept a new position for less than what you currently make, you are letting yourself be devalued. You’ve achieved your current level of compensation based on past performance and accomplishments. Why undersell your value to the marketplace when you have already demonstrated your worth?
  2. Taking a pay cut and creating a downward salary projection is very difficult to explain to prospective employers. It raises suspicion that something might be wrong and may cause them to become less interested in your candidacy.
  3. It may sound odd, but your current level of compensation will often tell a recruiter if you should be considered for a certain role. If your salary is too low, they may assume you are not qualified. The tendency is to look at candidates whose current salary is more in line with what the new role will pay.
  4. The ability to recover financially could take years. When you consider how small the average merit increase has been in the last several years, you should do the math and see how long it will take to recover what you are giving up.
  5. The best time to ask for what you are worth is when you change jobs.   In fact, one of the reasons to look for a new job is to improve your compensation position. You rarely advance your compensation by staying with the same organization for a long time, so take advantage of this opportunity.
  6. Will you stay motivated after you see that first paycheck? Only you know yourself well enough to answer that question.
  7. If an organization knows what you are capable of accomplishing and they make you negotiate for what you are worth, take notice.   It’s an indication of what you can expect in the future. Wouldn’t you rather work for an organization that recognizes your value up front and makes the best offer they possibly can.

It’s important to remember the decisions you make about compensation have many longer-term implications. Weigh the trade-offs carefully when deciding what makes sense.

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