Surviving a Pay Cut: Is Your Job Secure?

With layoffs being in the news every day, what is an employee supposed to do if his employer decides to do salary cuts instead? You may be faced with this situation and wondering how long your job will be secure for. Here are your job options if your employer decides to do salary cuts instead of layoffs.

Surviving a pay cut: Is your job secure?

This is a huge question and an even bigger source of worry. When an employer starts to cut salaries it is a sign that there is a financial problem within the company. However, it does not necessarily mean that the company is ready to go belly up.

First, take a deep breath. Start to evaluate your company's track record and financial past. Is your company trying to proactive and stave off the company's impact of an economic downturn? It is easy to see how your company is doing if your company is publicly traded. A better way to determine the financial stability of your company is to look around you. Is there as much work as there was last year at this time? If there is less work, has the company made the proper adjustments to their budget? If the answer is no, then there may be cause to worry.

Hospitals have been in the news lately since they are normally the ones that are impacted about a year after a recessions starts. Many hospitals across the country have started anticipating the decrease in insured patients and have started cutting salaries and even laying off some support staff. This does not mean the hospital is in financial trouble right now, it means that they are anticipating a slowing of income.

Next, evaluate your history with the company. How long have you been with this company? If you are at the bottom of the food chain, then you probably have cause to worry. Have you been a consistent good performer? To evaluate an honest answer to this question go over your previous years' reviews. Also look at how you have been performing over the previous twelve months. If you see a decrease in your performance then it is possible that your employer might have noticed it too.

Keep in mind that many companies are being pro-active in response to the recession. Also think about the possibility that your company may be just taking this opportunity to cut their bottom line.

Surviving a pay cut: Job hunting

Once you evaluate the security of your job then you can decide if you think you need to look for another job. You have a job right now so looking for another one may not be a priority. If your company is looking to be financially in the red, you may want to consider it.

The other possibility is to ride out the trouble. If you do this and the company still folds then at least you may be eligible for unemployment benefits.

There are definite risks to switching jobs at this point. For starters, beginning at a new company will put you at the bottom of the seniority list. If the new company starts to have financial trouble then you may be the first to go and if you have not been with the company for at least twenty weeks then they are not obligated to pay you unemployment.

Do your best to make sure that any new company you look into is financially secure. Use the same evaluation tools that you looked at with your previous company. If you can, talk to the employees about the company. Do not just ask questions about the company; try to evaluate the feelings of the employees. If they all look happy and secure then chances are they feel that way about their jobs. You can even get a sense of this as you walk in and out of an interview.

Your own personal evaluations may be all you have to determine if your job is secure or not. Look at the company's track record over the previous five years and your personal performance to help in your career decisions and peace of mind.