GetFive Insights

After a Layoff, Should You Consider Taking a Pay Cut in Your Next Job?

December 17, 2018
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Businessman with question mark over his head,Vector EPS10.

If you’ve been laid off, downsized, or just plain let go, the first thing on your mind should be the search for your next job. Dive in immediately, whether you have outplacement help from your former employer or not. Get that job search funnel working for you, starting with networking like crazy, generating leads, and getting out there attending events where you can meet people. All of those leads turn into opportunities that ultimately turn into job offers.

When that time comes, what can you expect in terms of your salary? The answer is: That depends. Should you consider taking a job that offers you a cut in pay? Absolutely. Will every job offer you less than you were getting at your former job? Not by a long shot.

At GetFive, we’ve been helping people through their job search process for a lot of years, and we’ve collected data along the way about the salaries after a job loss of our clients. Here are some stats:

Average job seeker’s salary outlook

  • Salary decrease: 45%
  • No salary change: 16%
  • Salary increase: 39%

What accounts for those numbers? It depends on whether you change your industry, your job role, both, or neither. Let’s break it down.

Changed both industry and job role. People who change both industry and field or function are 20 percent more likely to see a salary decrease than those who stay in the same industry and field. It stands to reason: It’s a new industry and a new position. You’re going in with less experience and as such, will likely see a dip in pay.

Changed industry but same job role. People who change industry but stick to their area of expertise are actually 10 percent more likely to see a salary increase than those who stay in the same industry and field. You’re bringing valuable insights from another industry into a role you’ve built expertise in.

Changed role but same industry. People who change functional roles but stay within the same industry are just as likely to see an improved salary as those who stay in the same industry and field. This is because you’re growing and challenging yourself in a milieu you already know.

Same industry, same role. A lateral move to your same position at a different company in your industry will likely lead to a bump in pay, but you might expect a similar salary offer as well.

The bottom line is that 33 to 58 percent of all job seekers, no matter the industry or role, may see a decrease in pay in their next job. But that shouldn’t deter you. It’s easier (and less stressful) to get a job when you already have a job, and you can work your way back up from there.

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