The job market may be slowly starting to recover, but some salary offers are still a few years behind.
Some hiring managers are offering salaries lower than what workers previously received. The question is: How low should workers go when it comes to accepting an offer?
Some job hunters leap too soon at low-paying jobs, while others may be too optimistic about how their skills translate into a current wage and hold out for too long, experts say. While financial hardship is a strong motivator to take a low-paying gig, job seekers should also be mindful that taking such a position can negatively affect their career — and their income — for years.
Since the labor market began picking up steam, companies hiring for entry-level or administrative spots with pay that would normally range from $40,000 to $50,000 have been offering workers $28,000 to $38,000, said Randy Miller, founder and chief executive of ReadyMinds, a Lyndhurst, N.J., provider of online career counseling and coaching.
For workers further up the food chain, an offer that might have been $100,000 a few years ago is now coming in at $85,000 or $90,000, he said.
“Companies are more worried these days about margins, profitability, and they are cutting costs across the board. Even though (workers are) qualified and have prior experience, the hiring department has been told to set a budget at a lower range,” Miller said. “Everybody is more price-sensitive these days.”
“Some people, because they are embarrassed to be unemployed or because of the financial hardship, do take a low-paying job, though the prospects aren’t that great, and they stick with that job for a long time,” said Gary Burtless, a labor economist at the nonprofit Brookings Institution.
Hannah Riley Bowles, an associate professor at the Harvard Kennedy School who has studied the attainment of leadership positions, said lower pay has long-term effects. For one, raises are added to that lower base salary. Also, “think about putting aside some percentage of your savings. You are putting away a smaller (amount),” she said.
Experts said workers can ask about educational and training opportunities. If you do accept a low offer, make sure you’re gaining in other ways, such as valuable experience or access to a network that can advance your career.
“These may be things that companies are more willing to provide right now than salary,” Riley Bowles said. “That is the way to beat the sad story of: ‘I started at a lower level, and I am stuck at the lower level.’ “
Job seekers who receive a low offer should compare that offer to what they can get elsewhere in the current market, rather than what they could have received before the recession began, Riley Bowles said.
“It would probably be unwise to walk away from an offer if it’s competitive. They should keep focused on the current economy, and not be distracted by previous income,” she said. “But that is hard to do emotionally.”
Sometimes, job seekers misjudge their own value in the labor market. “People think that their qualifications and the state of the job market are such that they could get a much better job,” Burtless said.
The problem with making that miscalculation is that the longer a worker remains jobless, the harder it is to impress companies, he said. “They look at you and see that you haven’t held a job for a year and a half … usually their interpretation is not very charitable if someone else is standing in line for a job and that person hasn’t been unemployed for as long,” Burtless said.
Job-seekers who have been out of work for a long time should probably consider reasonable offers and make the best of it, said Walter Akana, a career strategist in Decatur, Ga.
“You have lost your job. Now is the first day of the rest of your career. You may have to work yourself back into a position of strength,” Akana said. “Having said that, if someone has the financial wherewithal to hold out, then I think they ought to be doing a lot of networking and looking for exactly the right kind of opportunities.”
With lower salary offers, other types of compensation become more important, ReadyMinds’s Miller said. Workers should ask about all benefits — sick days, vacation days, professional training, health insurance, bonus structure — and other provisions such as relocation expenses. Also, workers should find out exactly how frequently they will be eligible for promotions and raises.
“It’s then up to the individual, once they receive their formal offer, (to) do their own industry research, negotiate and possibly counter offer as best they can, and then decide whether this is the best offer they are going to get,” Miller said.
Karen Chopra, a Washington-based career counselor working with higher-income clients, said workers can offer to take a low salary in exchange for working part time, say four days a week instead of five.