Career case study: Salary cut or Job loss?

As a 'Job Search Career Coach' in my business 'Careers Reborn', I witness some of the most interesting aspects in the field of jobs, people and careers. I was privy to such an interesting and slightly strange event. Let’s go back to the end of last financial year when this story starts and share it.

Unfortunately a senior executive from a large engineering company was told that majority orders were cancelled, their bottom line was under pressure and certain middle management staff had to take redundancy or a salary cut. He could not believe his ears! He had worked so hard to start this division, get it up and running, sourced the talent, prepared and won tenders, secured the business and made it a profitable. He was in his late 50’s and really worried about finding a senior level role elsewhere in a new company.

Now his consultation issue was whether to take a salary cut or accept redundancy with small amount payable. There were pros and cons for both options. Like every other average ‘Joe Blogs’ he still had a small mortgage and felt he had the best career years ahead of him. He could not retire or stop working. Retraining was suggested and considered, but he was not inclined v positively towards that option. It was a mindset thing.

The salary cut was not a normal one, but a big one to the tune of 30-40% of his earnings on top of loss of any bonuses and perks. Secondly the firm would retain him, but not in his original capacity, but in new side stepping role to support other project teams. He had to work with some junior team members. This was hard.

The redundancy option sounded nice. He could get a few months salary and look for another job at the same senior or similar level. After 6 months he could also walk into the offices of the competitors. At least he would be financially well off in the short run. Main thing was he could retain his pride without damaging his ego. He thought about choosing this option two but speaking to consultant he decided to choose option one. 

There is a difference in listening to advice and implementing advice. Also there is advice that sounds good and advice that is really professional and practical. So the decision he made was actually to accept option one take the pay cut and a side step, but remain within the organisation. He understood business and how things work. Life is different from the movies. He accepted that the change was sweeping not just across his company but the entire industry. Other players in the same market were also feeling the pinch.

That was indeed true, his colleagues who were leaving, were finding the job market tough to get anything towards similar to their recent salary levels. After discussions, he was open to listening and honest to realise that the mining boom was over and it was once in a lifetime event.  He realised that the economic scenario was a big help in him securing the new business. In other words it was not all ‘him’. But the story doesn’t end here as change is the only thing which is permanent.

Now after a year, what has happened is his company has realised there was growing business in another industry segment: construction. They needed someone they could trust to build the business in that segment, but all other senior middle management staff had gone. There was only one perfect candidate who had taken option one and stayed on. 

Our Senior Manager had the upper hand in negotiation of the perfect salary package and is back in a similar role where he was. Senior management and the board were taken aback with his strong negotiation tactic and blunt approach but they agreed. He is now heading the new division in this challenging role  and in much better profile than his previous role. In fact 2 of his old senior colleagues have approached him to take on junior roles as they are struggling to get a job. In today’s economic scenario every career has its ups and downs, but with the right professional advice you can go places.