Significant pay cut in new job not justified in retrospect - next steps? [duplicate]

Question

I started a new job in a team leading position in a new company two months ago. The new company is still quite young but growing substantially (now 400+ employees). In my new role as a team lead I have more responsibility and am able to manage a team. This new role came with a substantial pay cut and the salary is well below the industry average. During the interview phase I negotiated the salary to an extent where they would not go any higher, due to the fact that they simply could not afford the higher salary demands (so they said). Despite the cut I took the job due to the experience I will gain from it.

Now that I have started the job I can see that finances are readily available and cost saving is only a secondary priority at the moment. I feel quite cheated and am not sure what steps to take next. Is anyone able to advise me here?

I want to talk to my manager with facts (e.g. salary comparisons, cost saving potentials in the company). However, as I feel the relationship does not feel honest I am also thinking of quitting the job and starting fresh in a new company (thus most likely taking a step back in the hierarchy again). Any thoughts or hints are greatly appreciated.

Many thanks in advance!

Answer 1

Good luck. You demonstrated that you would work for less money. And they will take advantage of this as long as they can. Find a job elsewhere. Dump them. Then you will get paid market rate, and so will your successor.

Answer 2

I feel quite cheated.

You knew very well going in that you are going to be "underpaid" but decided to take it as experience anyway. Where is the cheating part? You knew fully well what you are signing up for.

I want to talk to my manager with facts (e.g. salary comparisons, cost saving potentials in the company).

That's something you've only very recently done when accepting the job. Wanting to renegotiate a deal you've signed two months ago is going to look weak and maybe even unprofessional.

However, as I feel the relationship does not feel honest I am also thinking of quitting the job and starting fresh in a new company

That is also what will shine through if you will attempt to renegotiate your salary now, and your boss will pick up on that you want out. Not a good thing at the very start of working relationships.

Is anyone able to advise me here?

Keep doing your job, mouth shut about the money, update your resume and see if you can get a better offer in the same position to gain the same experience. If you can, move on to it, or use it to leverage a better salary with the current company. If not, then you are likely being paid your market value right now.

It's also important to point out that just because the company has the money that doesn't mean it's money which is/was available for your employment. Organizations where people go into hundreds+ usually have very tight budgets locked for each position, and it rarely has a wiggle room.

Answer 3

The time to renegotiate salary is at the next standard negotiation window.

If you have proven your value between starting and then you have a case to make.

Right now you are only two months out from a completed negotiation and I very much doubt you’ve had a chance to prove yourself in that time.

If you can’t bear to live with the salary you agreed to until the next negotiation window resign immediately and let everyone, including yourself get on with your life.

Answer 4

... they simply could not afford the higher salary demands (so they said) ... I can see that finances are readily available and cost saving is only a secondary priority ... I feel quite cheated ...

I understand why you feel cheated. However, unless they specifically said they would have paid you more if they had more money, they did not lie to you. I think your actual issue here is misinterpretation of the word "afford". The salary that they offered you is what they could afford to spend on your salary. It doesn't mean they don't have any more money left.

... am not sure what steps to take next. Is anyone able to advise me here?

Your next step should be to understand what you actually want. You say you agreed on the lower salary due to the experience you would gain from the role. Does this not hold any more? Do you now see the experience is not actually worth the salary you chose to forgo? If you didn't know about the company's finances, would your answer be different?

If your initial goal of gaining experience is still valid and you are on track, then there's nothing you need to do other than focusing on your job. You had agreed to work for them in return for things you consider beneficial, namely (1) salary and (2) experience. How much more money the company has doesn't change it.

If you now see that the experience is not good enough to compensate for the salary difference, then you should have a discussion with your manager about how the work experience can be brought in line with your expectation. What this actually entails is too specific to your actual work and situation.

Answer 5

Despite the cut I took the job due to the experience I will gain from it.

Lot of times this is pretty standard when you are trying to change career. You've seen the opportunity to advance the career to the field you might not fully qualify today and decided that in long term it would pay off.

Is anyone able to advise me here?

If finances is not really pressing issue and you are just hurt that you are "below the industry standard" I would suggest you set this feeling aside for now and try your best to do your job as best as you can: participate in as much projects you can, try to get a best results and invest some time into education in the field. Keep doing that for two-three years and then put every achievement and every successful project on your resume and be a bit more aggressive with your next negotiation. I have been in similar situation some years ago: I accepted a job offer for a salary that was a bit below the standard for the position but it was an opportunity to go into a bit different field without qualifying experience. Three years later (which were fantastic years: I have learned a lot, participated in a great projects and grew professionally really high) I've got a job that was about 40% more that what I had at the time (and put me a bit higher than standard for a more senior position that I had in my 1st company). Now since almost 10 years passed since that time only thing that comes to my mind that it was a huge luck that I had this opportunity and I took it.

Answer 6

Despite the cut I took the job due to the experience I will gain from it

Salary is not a function of maximum money available to the company, it's a function of minimum money acceptable by the employee. The market rate is simply the average minimum acceptable salary for a particular job across all employees in your field.

That minimum is obviously going to change from person to person, and depend upon things like experience. When people take below market rate, it means their minimum is lower than the average candidate's, owing to some compensating factor usually. In your case, it's that you don't have any experience yet of this type of role, but have the opportunity to gain a year of that experience for each year you take this pay cut.

You made that analysis and that decision. The only relevant question for you is did your reasoning change since you took the job? Would you go back to your old job now and forego the experience to regain the extra salary? If yes, you should probably do that. If no, then continue in this new job.

There is also a third option - if you've simply discovered that this job pays below market rate even factoring in your lack of experience - in that case, yes you should probably just start looking elsewhere if you'd like the opportunity to gain similar experience for more money. I say that because renegotiating immediately for more money after you accepted an offer is extremely unlikely to work out well, and it's honestly better to discount it. You could try, but you shouldn't expect to succeed.

If you stay what will change over time is your improved opportunities and market value with the experience you've gained, and hence the marginal value of an extra year's experience. At that point, you can go to your manager with those facts, make the case for a pay rise, and probably get one.

Answer 7

I've not seen this mentioned anywhere, but usually when the company is young, and can't afford the top talent at the market rates, is that they offer stock compensation instead. Did you receive any stock options? If not then absolutely you should go ahead and renegotiate.

However the company was not decitful - they were honest about you earning low wage, and that you'd be basically trading the money for expirience. If you feel you're not happy about the deal, you should either renegotiate or change the job.

Answer 8

The other answers deal more with the practical side. While I agree with them (I think Timoteusz Paul made most of the salient points), I would like to note that your feeling of resentment and being cheated will undoubtedly in some way impact your life negatively, until these things are resolved in your mind.

So, I would like to add to Timoteusz Paul's part of where he notes that the fact the money is present in company doesn't mean it is available for your salary.

It actually might be and you might be taken advantage of. But it might well be not, as others pointed out. In fact, it is generally a good sign that money is available in company -- it indicates the company seems to be doing well and you have less risk of eg unpaid or delayed salary. Rather important for startups especially, but not only them.

But before you make conclusions, you should have a certain level of understanding of what the company is, how it is run and what the people are like in it.

If you and others are underpaid (compared to industry average for the experience and job) it might mean the company is putting the money in growing. Or not.

For me, an indicator of problems in this case would only be excessive personal consumption by the owners/top management.

If they can't pay their people, but take the money out for luxury spending, the job simply doesn't look good for you in future, as you will be expected to continue furnishing their lavish lifestyle with the extra money they get by paying you below average salary.

If it is not the case, it would indicate you are not taken an advantage of and have no real reason to feel cheated. Unless you are being paid much lower than others in the same company in the same role. However, comparing yourself to others is frequently counterproductive, and the other answers still stand in that you know what you negotiated and why in fact you did take the position.