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Is taking a pay cut smart?

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by Jorge Andrés Jimenez Yanez
Impactpool Executive Search

Changing jobs to a lower paycheck might sound unreasonable to some, but the truth is that it might be the fastest way to a rewarding career and if done strategically, it can mean your ticket to a leadership position, or to a higher position in the organizational ladder. 

Job transitions seem to be the never-ending story for most of our impact professionals, and it is not due to their dissatisfaction but to the nature of our work and how it is funded in most cases, plus the importance of continuously building up their professional profile.

In this article, I will give you my opinion as a global executive recruiter on how to assess your next job opportunity when it entails taking a salary cut with career strategy in mind.

If we step back and look at what some of the world's most renowned philosophers and psychologists have taught us about why having a job is important, in summary, it is an exercise for self-awareness and a prime source of dignity for every human being. Dignity and positive impact at the front-center of your career, instead of wealth accumulation, shall bring much greater rewards. 

Therefore, if you are hesitating to transition to the impact sector if it entails a salary pay cut(this is NOT always the case), towards making a positive impact on your everyday job, by all means, GO AHEAD, I recommend it 100%.

Furthermore, from the standpoint of career advancement, these are the cases where I strongly suggest taking the pay cut even if it seems hurtful in the beginning:

Internationalize your professional profile

Oftentimes I hear international recruiters telling me, "when I don't know which candidate to choose, I go for their international experiences". Multicultural competencies are now a must in order to land a job at an international organization and will be critical when leading an international team.

Programmatic breadth

The quality and quantity of the programs you've led and had been working with are quintessential when a recruiter is evaluating the skills of an impact professional for a leadership role. In simple words, if your career plan is to become a leader in the sector, then a professional with child-focus program experience that has been involved in child protection, child health, children's rights, and nutrition will be assessed much more competent as a leader than a senior professional who has only worked with child-rights and its legal implications.

When possible, make sure that the next employer's mandate/mission/programs are in line and consistent with the professional profile you are building.

Build your regional credentials

When it comes to the largest international organizations, it is necessary to understand that their development and humanitarian programs do not work as panaceas, they need to be tailored to the needs and realities of their regional environment, similar to what sociologists coined as glocalization.

To effectively adapt, international organizations look for professionals that understand not only more than their natural environment(country of origin) but also the finesses within the similarities and differences of the countries clustered as one region i.e. Latinamerica and the Caribbean, Middle-East and North Africa, South-East Asia, so on and so forth.

Managerial capacity

Having worked for the largest NGO or Non-profit in the world will definitely position you as a top international professional given the applicant's competition which leads to tougher recruitment processes. However, oftentimes those organizations require professionals to focus only on a few areas of work, and only those; this will not only block your capacity to develop your personal skills but also represent an obstacle to acquiring new competencies - which you will need for your next job!

I recommend taking a pay cut particularly if the job opportunity represents widening your managerial capacity, meaning that you will be leading a team larger in number, budget, and professional background; managing highly qualified professionals, at international locations, with a wider programmatic portfolio will definitely be decisive when competing with other candidates at a later point. 

Brand association

When your name is associated with a brand, choose the biggest and most prestigious organizational brands at an international level. Your previous experience can only tell so much about you, especially in the international arena, recruiters will most likely be from a different nationality than you, and will have a different set of preconceptions and biases. 

Focus on the storytelling side if someone would be judging you by the name of the organization's brands in your CV.

Personality and lifestyle match

Two of the strongest predictors of success are conscientiousness and resilience(as one of the attributes from your emotional intelligence quoficient); In my experience, those two can be strongly sustained by aligning your personality, values, and lifestyle to the job and environment you thrive in.

In simple words, it's easier to rise back from a failure or simply to carry on when you have to come back to do what you enjoy doing anyway. 

A common mistake is only aligning yourself to the mandate of the employer organization.

To avoid this pitfall, make sure that the role you are taking is in line with you too. Mind the everyday aspects of your work e.g.

will you be looking at a computer all day? will you be speaking to different people every day? Will you be walking all day? - speak to professionals working already in the positions you are pursuing, you can do that by listening to our podcasts.

will every day look the same as the day before, or will it change every now and then? - Then assess if those answers make a good match with you!

Finally, if you find yourself working for an impact business, these are also good reasons for taking another job when it comes jointly to a pay cut:

Lifestyle change

When you'll get more rewards from what you value in life other than your job, e.g. time with your family, or maybe just getting to truly explore different societies around the world(if it's in a different country)

Potential growth has reached its limit

When you've reached the potential growth in your organization, both in terms of responsibilities and salary. However, I strongly recommend understanding how compensations structures work in your company, and what are the managerial growth schemes to retain the leaders in an organization - there is a world of growth opportunities beyond salaries, namely commissions and stocks to name a few.

Entrepreneurial ventures

As a serial entrepreneur, venturing into starting a new company became one of my main sources of learning and advancement both in a personal and professional capacity. Two things that are important to keep in mind to make this decision is that there are almost no irreversible decisions and statistically, most startup companies will fail, so if you feel ready to fail, you are an entrepreneur - go ahead!

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In conclusion, if you have enough money to cover the livelihoods of you and your dependents(if any), don't let the money be a distraction, choose wisely by prioritizing what you truly value, which, I would argue, most of the times will not come with a higher salary.

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