Whether you’re disillusioned with your current company or out of a job completely, searching for a new position can feel stressful and exhausting. As days, weeks, or even months pass, you may start questioning your prospects, and feel tempted to consider roles below your level of experience, with lower corresponding salaries.
In fact, earning a salary, no matter the amount, is better than nothing–right?
In reality, this isn’t quite true; accepting a lower-paying job that you’re overqualified for may be a short-term fix, but can be very expensive in the long run. Here are four key things to know before you take up a job you’re overqualified for:
Text: Carrie Arndt/ValueChampion
1. Taking a Salary Cut Can Lead to a Big Loss in Long-Term Earnings
Accepting a lower-level position will almost always mean taking a pay cut. It’s a generally known fact that salaries vary according to differentials in years of experience and educational qualifications. Data collected in recent salary reports by Michael Page and Robert Half shows that such variations apply both within individual career paths and across different industries.
In fact, taking one step down in seniority can mean a loss of S$1,000’s in monthly income, which can add up to overwhelming discrepancies across a full one-year period.
Even more, taking a pay cut can slow your long-term salary growth substantially. According to research by Robert Walters, 23 per cent of professionals expect a raise of more than 10 per cent in 2019, but less than 10 per cent of hiring managers expect to award raises of this size.
This discrepancy shows employees tend to be over-optimistic, but also reveals just how slow salary growth can be. Given that 10 per cent of a smaller base is smaller than 10 per cent of a larger base, incremental increases–even at this rate–will be much slower after accepting a pay cut. This slowed rate can add up to a substantial loss of potential earnings over time.
2. Experience Won’t Necessarily Lead to Faster Promotion
Having years of extra experience or educational credentials beyond expectations may boost job performance, but won’t necessarily lead to faster promotion. In fact, according to SEEK Asia’s Job Promotions Report, Singaporeans rated fairness of promotion as 3.23 on a scale of 7 for outcome and 2.64 out of 7 for process–some of the lowest ratings in Southeast Asia.
Singapore also has the longest average time to promotion in the region–an incredible 3.8 years. In other words, accepting a lower position just to avoid a few months of unemployment can actually set you back for years. Yikes.