When A Pay Cut Can Help You Up The Career Ladder

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Where do you want to be in five years? Do you have the skills you need to get there? If you don’t, you might have to climb down the career ladder before you can start climbing back up again — and yes, that might mean taking a pay cut.

Diya Jolly, chief product officer at Okta, took three deliberate pay cuts as part of her long-term career strategy. As she explains at CNBC:

At three points in my career, I’ve taken a step down and accepted a lower title and salary. Without any context, I know this sounds like a misguided decision. But every step I took down the corporate ladder was intentional and helped me achieve greater long-term success, both in terms of achievements and compensation. Each new role taught me the skills I needed for my long-term growth and got me closer to my ultimate goal of becoming a product leader.

If you’re thinking about making a similar decision, ask yourself what job you need now to help you get the job you’d like to have in the future. One of the best ways to determine whether you’re on the right career path for the job you want involves looking at the career histories and skillsets of the people who currently hold that job. Does their career trajectory match yours, or did they all spend time in a specific position that you’ve never held?

If you’re connected to one of those people either personally or professionally, it’s worth asking them for an informational interview — or, if you don’t want to give the conversation a formal label, see if they’d be up for coffee or a quick chat.

You’ll want to learn what it’s really like to hold that particular job title (to make sure it’s what you really want) and clarify whether you need to update your skillset before positioning yourself towards a similar role. Go ahead and ask the person you’re interviewing whether they recommend you take a step down the career ladder; they may suggest a few alternatives, such as coursework or certifications.

It might also be possible to find the kind of job you’re looking for without having to take a pay cut. Don’t go in to job interviews and salary negotiations assuming you’ll have to accept an offer that’s lower than what you were previously earning.

However, be prepared for the subject to come up — and be ready to explain why you’re looking for this type of role, how your current skills can help the company solve its problems, and what you hope to get out of the career move both in the short and long-term.

Ultimately, you’ll want to build both a career history and a skillset that lets you develop the network and the reputation to get where you want to go — even if it requires a brief pay cut to get there. As Jolly puts it:

To reach your goals, you need to focus on long-term growth, not just the next promotion. Identifying the skills required to get there and setting aside time to cultivate them is your best form of job security.

If you do end up accepting a pay cut, we’ve got some tips to help you manage your reduced income — and prepare both your career and your finances for the future. If you’ve made the right move, you’ll be happier at work and should quickly find yourself in a position to start climbing the career ladder again.


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