Question
I just finished my second year working for an information technology (IT) company. It’s my first job. I have seen my interests change from the tech side of the house to the business side, and have begun pursuing an MBA. I have been looking for another job in order to go ahead and change careers and I am expecting a written offer this week from a major telecommunications corporation. The position looks to have very good potential. The only drawback is that I’ll probably have to take a salary cut.
I don’t feel I have much to bargain with, since I don’t have a related degree yet, and I have no experience in the field. It’s not a big cut, but I’m pretty bummed to be taking one at all. You just don’t expect to take a cut when switching jobs. I’m trying to get my head around this, so I’ve got a couple of questions. First, does it even make sense to take a cut?
Second, I was wondering what kind of advice you could give me on how to try negotiating a bigger package when I have no experience? Any help is much appreciated.
Nick’s Reply
Judging from recent news about tech jobs withering under the bright light of AI, you may be ahead of the curve by shifting out of tech now! I say that partly with tongue-in-cheek because it’ll be a while before we know whether this is an anomaly or a real trend.
“It’s not a big cut, but I’m pretty bummed to be taking one at all. You just don’t expect to take a cut when switching jobs.”
But, you’re not just changing jobs. You’re changing careers. While many career changers report increases in salary, that depends enormously on how big a disparity there is in required skills between these careers. You should of course negotiate the best salary you can, but you’re wise to consider your lack of a relevant degree and experience. Depending on the exact nature of your career shift, you may need to prepare yourself to pay a price at least in the short term.
So let’s tackle your first question: don’t view this as a cost, but as an investment.
Salary Cut: Up and down a tree
There’s an analogy I like. You’re climbing a tree, following a particular branch upward. Then you realize you’re going up the wrong branch. The only way to change direction is to move down so you can start back up the correct branch. That’s the cut in pay, and it will indeed slow your income down. For a while. As you start back up the right branch (the business career) and gain momentum, you should be fine.
Here’s the kicker in this analogy: the farther up the wrong branch you go (and the higher you and your salary rise), the farther back down you’ll have to go (in height and salary) before you can start back up.
A salary cut can be a wise investment
If you believe your value in the new career will require time to catch up as you acquire new skills and come up to speed, you’re smart to make the change now. It’s conceivable that once you reach a certain point in your IT career, your salary may be so high that it’s going to cost you a lot to make the shift.
You’re not losing salary. You’re investing in change. When you invest in a stock, you’re out short-term cash. But if you invest wisely, the returns should more than pay you back. I wouldn’t worry too much about the dip you’re about to take in salary; focus instead on doing so well at your new job that your value becomes quickly reflected in your first and second raises. It’s important to discuss with the new employer how long this might take.
I don’t like to see anyone take a salary cut unless they’re getting something for it. You will have to assess the value of this job to your career and perhaps amortize the cost over time. Be brutally honest with yourself: can this career change pay off in the long run?
Your second question is how to negotiate a deal without a salary cut despite your lack of experience and credentials. I think you’ll find some helpful ideas about that in Can I change careers without a salary cut? For a more extensive discussion on this topic please see How Can I Change Careers? Congratulations on getting to the offer stage!
Have you ever taken a salary cut to get ahead in your career? How did it turn out? How would you advise this reader? What are the risks in taking a cut, and how can you mitigate them?
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In general a business side career should be financially more rewarding than a technical side one, with the business side one often having a variable part dependant on business results. But like Nick, I’d say that it may make sense to go lower/back to better rebound and following one’s motivation and happiness is of outmost importance!
As Nick described, I was much further up the wrong branch when I switched careers a couple decades ago so my drop in pay was drastic rather than “not a big cut” but the investment was absolutely worth it.
I was the sole bread-winner and our daughter was 8 months old at the time. I earned in 2001 40% of what I earned in 2000. That’s not a typo—-my drop in pay was 60% the first year. Still worth it.
I’m earning significantly more now than I could ever possibly have earned in my previous career plus I’m doing something I enjoy rather then being stuck in a career and industry that I had grown to despise.
Do what you love and do it well. The money will follow.
I took pay cuts in the first 12 years of my career to get into things that better-suited me, and both worked fine. Having a wife bringing in salary helped of course.
One thing that made my decision-making easier was the guidance of a friend’s father, who with some college but no degree worked his way from the packing line to CEO of a large public company over a 40-year career. Very early on, he was identified for having brains and leadership, and his first 20 years on the rise, he’d have roles in different departments, which had different pay structures, so he’d often take pay cuts during the journey. And that was as the sole provider for a wife and four kids.
The fact that he had a supportive family, and through-the-roof confidence didn’t hurt, of course.
There is a meme with one picture of a straight line going from the left-bottom to the right-top and the label “What I thought my career would look like.”
The other picture is a line that looks more like an EKG, and the label “What my career really looks like.”
Props to those who never experience a setback.
For the rest of us, we just keep looking at where we want to be.
I’m pleasantly surprised at the comments so far and at the personal stories of salary rebound after changing careers. After I finished this column, which is largely based on what I’ve witnessed over decades of working with people who have had successful, if not bumpy, careers and career changes — I went back and started researching what happens to career changers in terms of salary. What I found gave pause, because it seems many if not most career changers got pay increases. I haven’t looked at enough data on this, but I’d love to hear from others about it. It’s a difficult topic because there are so many factors to consider: What kind of job did a person move from and to? Education and skill levels? What industries? What salary levels did they start at and move up to? A lot of fine points. But regardless, what I value most is the stories of real people, what they did to accomplish their career change goals, why those goals changed, and how it all played out. I learn more from all of you than you’ll ever learn from me!
More details on my career move. Previous career was installing car stereos, alarms, etc. and I achieved the pinnacle in the technical side of things when I was in charge of installer training and tech support for a 9-store operation. The only room for growth was to switch to sales or management but I didn’t find either appealing.
I decided to do something different mainly because of a coworker that was nearing 50 and still crawling around under dashboards and I didn’t want to be doing that when I reached his age. Nor did I want to follow my father’s footsteps and be installing kitchen cabinets in new construction at that age either.
I had discovered a knack and interest in computers, particularly in the area of networking. To prepare for a career change, I had been working weekend and evening contracts to get some experience under my belt. When my car stereo job ended sooner than I anticipated, I thought I had a full-time opportunity with the contract firm but that turned out to not be the case so I did contract work for about a year and a half until a permanent opportunity presented itself.
I started the car stereo career in lieu of graduating high school because I wanted income more than I wanted a diploma. (High schoolers aren’t known for being long-term strategists and I was no exception.) A few years later I got a GED and then a diploma from an Electronics Technology program but found I could earn more installing car stereos so I went back to that.
As for the salary in IT, once I landed a perm position rather than a contract, I began earning about what I had been earning in the previous career. Now I’m in a DevOps role for a telecommunications firm and earning roughly triple what I’d been earning installing automotive electronics. Now instead of crawling under dashboards I’m working from home in my nice home office. Oh, that nearly-50 milestone? I passed that more than a decade ago.
I think the investment point is excellent.
And Gregory’s memo on career growth is an uphill linear line. As a recruiter, and in work life, I’ve seen so many people box themselves in, insisting to themselves that they MUST have higher pay and title to make a move. In so doing they don’t think tactically, take into consideration intangibles, or clear values e.g. something simple but at times expensive like commuting costs in time & money.
There’s risk involved in taking on a new job to the job seeker & the employer. In changing roles the risks are even higher. There’s dues to pay when you switches in roles. Financially, risk, personally.
Prioritizing pay over all other considerations is fraught with risk & disappointments. Especially when it’s base pay focused. Example. I worked a # of years in S California. I don’t know how many people I’ve seen who took jobs, relocated, for what seemingly was a great jump in pay, only to find out when the dust settled, they’d actually took a hit on their take home especially after buying a home out there.
I’ve retooled myself several times and worked with scores who’ve done likewise. If you think tactically, make a move into something you really want to do, check your ego at the door & view the cut as an investment, you’ll get it back & more.
As to the writer. Look’s like the job’s in place..yet the person think’s there still room for negotiation. The new employer’s made their offer, per their company’s SOP, pay ranges etc. The writer can consider shifting from trying to haggle about a change to starting pay…to a one time kicker after the person’s been aboard, based on demonstrated performance. Say 6 months later. The HM may find this much easier than trying to change a newbie’s starting pay.
What stood out to me is the writer seemed to feel, that to change roles, they had to change companies. About all the companies I worked for were IT companies. And it’s not unusual for techies to find they’d like to swing to the business side. or the converse. The business side e.g sales or marketing who has worked with an engineer, whispers in their ears that they’d make a great sales & marketing person. And dept to dept deals are done & they transfer. It also may cost you initially at first. I’ve never seen the company cut someone’s pay in a transfer, but when it comes to raise time???
Because in IT companies, founded by Engineers the engineer pay ranges usually are higher than the mere mortals who support them. And when the ITers move across into the business side they may be higher in range then their new peers. And when you work for the big guys, where you sit in the range effects your raise.
But if you transition in your current company…you know the company, you know the product, you know the people and they already know you. This means you can ramp up quickly, potentially hit home runs sooner & you’re off & running.
A personal anecdote…
A few years ago, the job I worked at had an abrupt end. There wasn’t much work in what I was doing at the time, so I had to do some retooling and reset my salary expectations.
I ended up taking a job that paid 2/3 of the job that ended, just because it was a related job and allowed me to do some retooling at the job itself.
After about 6-7 months, I was offered a job at a local community college. It still didn’t pay as much as the job that ended. However, it was a lot closer and since it is a public institution, the pay scales, employee handbooks and union contracts are all online and can be easily found. They ended up having better benefits which ended up making up whatever pay gap, and I would be making more than the job that ended within the first year.
My advice: maybe try to find a similar organization that has well thought out career paths or better benefits to soften the blow.
I just received a job offer from Atlantic Health to work in Health Information Management. I was able to pivot due to my work experience at Verizon, Frontier & my extensive caregiving experience to both my amazing parents.
Yes,I absolutely took a salary cut. My rationale is that I’m playing chess not checkers. It’s a great opportunity to learn, grow & get my foot in the door & try something new & relaunch into working at a company after a 5+ year hiatus managing the home front, my mother’s care & those who helped me.