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

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.