Negotiating a Pay Cut?

csb asks: "My employer will probably ask me to take a pay cut in order to prevent (or at least minimize) layoffs. I want to keep this job; but, I don't know what to request in return for accepting a temporary reduction in salary. Is this a negotiation? What questions should I bring to the table? Which issues should I stand firm on, and what should I let slide? Are there some resources out there about this sort of thing?"

Comments

Do it.

[eric2hill]

The way I see it, you have two choices:

1. Take the pay cut, no matter how much it is. Let them pay you to find another job. Stay with them until you have a better offer.
2. Tell them you'd rather be fired. Then draw unemployment. I could deal with a 10 month paid vacation right now...

First Post?

Negotiating a Pay Cut

[Anonymous Coward]

First, I'd try to find out if other employees have been asked to take a pay cut, and if so, how much. You shouldn't be asked to take a larger pay cut (percentage-wise, at least) than anyone else. In exchange, you should ask for additional training to keep you useful to your employer (and marketable to other employers, if necessary). I assume your benefits won't be touched, only your salary; if this is not the case, you should definitely keep health insurance off the table.

Re:Let them lay you off......

[Johnny5000]

"Oh and whatever you do, don't let them pay you in stock, unless you are out of toliet paper, cause it probably won't be good for much else."

It depends... if you think the company is going out of business, then yes, the stock will be worthless. But, many traditionally successful companies are feeling the pinch of the current economic times, and are laying people off. In a few years, the economy will be better, the company will be back on its feet, and the stock will be as valuable as ever.

-J5K

Alternative to a pay cut

[webmaven]

There is an alternative to reducing your pay rate, and that is to reduce the number of hours that you're working, and pro rate your salary.

This has several advantages; First, while it reduces the number of hours that you're working, your productivity will probably go up. Second, it provides a clear boundary condition for re-increasing salaries once the company has found it's footing, ie when your hours are brought back up. Third, it allows those employees who need the missing income to make it up through consulting work without increasing their workload to the point that the productivity in their main job suffers.

This is a much more equitable proposition, with a straightforward quid-pro-quo that balances the advantages and disadvantages for both the employer and employee.

The simplest way of implementing this is to either mandate three-day weekends (starting Friday), which is a 20% reduction in work hours, and a corresponding 20% reduction in salary, or a less drastic approach would be to let the individual employee choose a day of the week to make a half-day, which is a 10% reduction.

Reduced schedule?

[RTHeath]

I would consider asking for a corresponding reduction in working hours. A good friend works for General Datacomm, and they instituted a 4-day workweek (20% paycut) to cut costs.

If you can afford a partial paycut in exchange for fewer hours, take the time and enjoy it. It worked out great for him -- he was able to spend a lot of time with his wife & young daughter that he would never have done otherwise. There aren't a lot of times during the course of a career that one is given the opportunity to back off and focus on what's really important in life. And especially after the unbelieveable pace of the last 5-8 years, it's good to slow down a bit and take a breather if you have the chance.