Proposed pay-cut - what to do...

[LJ sxi-nav]

OK Guys, some advice please...

The company I work for has recently announced a 5% paycut for all employees. Our US colleagues will see their pay cut immediately; however employment law here states UK employees must give their consent to any cut in pay...

Apparently there will be no coercion applied by the company; and employees are entitled to freely decide yes or no. The risk, the company says, is that if not enough people sign up, there will be more redundancies (there have already been a few thousand...); and even with enough pay-cuts they cannot guarantee future redundancies. There has also not been any information about how/when pay might increase back to (and beyond (?)) its current level; however they have said that should targets be met, there may be the opportunity for performance related bonuses...

Unofficially rumours are starting that those who say no to a cut in pay will be at the top of the redundancy list should it happen in the future. Now, those saying no cannot be discriminated against, but I'm sure the company would do whatever it could to legitimise any redundancy it makes.

Now I have been one of the lucky ones in the company, previously receiving some good salary rises (not every year, mind) and a few bonuses. The question is should I volunteer for a 5% cut in pay?

I am nearly 30, work in the IT services sector and am aware that there is not much work out there at the moment. Redundancy scares me, but also loosing money would make life difficult (I got married last September so lots of bills to pay; and we really want kids sooner rather than later...)

So, what would you do- take a pay-cut Yes or No?

PLEASE HELP!!!

[Big Knox]

It's really a personal choice. If it was me I would look at my finances and if I could afford to live quite comforably still with the decrease then I'd take it. Sucks but still better than losing your job. And as you say, it show's you're "on-side" with management and willing to be a team player and so it may unofficially help your chances of being at the bottom of the pile if redundancies come.

I can sympathise mate, I think I know what company you work for and I work for a direct competitor and I'm sure we won't be far behind you.

[soulman]

i would bite the bullet and take the pay cut ,5% at the end of the day is better than being out of work >>>>> i should know has been 10 long weeks now

[Morephun]

i would bite the bullet and take the pay cut ,5% at the end of the day is better than being out of work >>>>> i should know has been 10 long weeks now

better to have work than none at all m8

[lofty]

I'd take a cut too especially at only 5%, heard of some companies cutting up to 20%!

[n_hudson]

Ouch. Thats a really hard choice, but when you say 5%, how much does that equate too? Are we talking 100's or more? Does your wife work? How safe is her job? Could you not try and budget around it?

If it was me and I could live on the 5% cut then I would if it gave me that little more of a chance of keeping my job.

But like you said, I dont know how they can get rid of the ones who dont except the pay cut first... that really does make it hit and miss.

[solorider]

a company cannot say those who dont sign are the first at risk for redundancy,a company have to look at work performance,timekeeping etc before anything else.as to the paycut if it saves your job then yes i would consider it,i have had to take a £250 a month paycut because of having to go on days rather than shift work,also i wont get a pay increase this year so i stay on the lowest pay grade in the company,at the end of the day it is your choice and you know the company better than anyone else on here

[rob 2.2dti]

If you leave you loose the security of "job tenure" ie length of service, if you were made redundant you may well end up getting a lower paid position anyway. Why not take the cut and start looking for other work. If you find a position paying more you can always resign. As for redundancy criteria the company can use all sorts of criteria as long as they are fair and equally applied to all. Cost of employing people is obviously one factor, if you had a wage budget of say 10k per week and you had a workforce earning 13k per month with 10 staff on 1k and 2 on 1.5 you could justify the criteria of cost - not sacking the highest paid 2 would mean sacking 3 others. And make no mistake - redundancy is a dismissal same as any other and can be contested at a tribunal.

[Big Knox]

Why not take the cut and start looking for other work. If you find a position paying more you can always resign.

I think with the way things are at the moment the best advice is if you already have a job, stick with it. The job you move to will be no more secure than your current one plus you might be subject to "last in, first out" etc. Hang on and if redunancy is inevitable then you might at least get a good severance package depending on length of service. Then go looking for work.

[LJ sxi-nav]

Thanks for comments guys, I was already leaning on the take a pay-cut side of the argument, and you are just helping me to confirm that it is the right choice.

I am aware they can't just make those who don't sign up to this redundant – that would be against the law – but I’m sure it would be a contributory factor in their decision making process.

Been with the company for nearly 9 years, and I have heard that their redundancy packages are fairly reasonable. So I would hold on and be pushed; rather than jump early...

My wife is about to start a new job, and is also taking a pay-cut from her last job. I think we just have to reign in our expenditure as much as possible (guess any car mods have to wait)