HOW TO NEGOTIATE SALARY DECREASE IN 5 WAYS

Salary decrease is a topic most people don’t want to talk about, no one desires a salary reduction myself inclusive. However, at a point in life, events beyond our control (economic recession, Covid-19 pandemic, Unfavorable government policy e.t.c.) Will happen that might warrant a salary decrease.

Negotiating salary reduction becomes pertinent if your employer asks you to choose between retrenchment or pay cut. In my country where the unemployment rate is high and business automation is on the increase, you will genuinely consider salary decrease. After all, a bird in hand is worth two in the bush.

BELOW ARE SOME TIPS YOU CAN USE IN YOUR SALARY DECREASE NEGOTIATION

1. SALARY DEFERMENT

In simple terms, this is when you take a pay cut now, and your balance would be paid back to you at a later date. The payment can be made in installments over a period or outright payment of your balance.

2. LESSER MONEY, MORE REWARDS

This is when you negotiate a salary decrease in exchange for non-monetary benefits, these benefits can come in different forms. It could be more job freedom, better working conditions, more pension payment, and so on.

This can be likened to Salary sacrifice.

3. PERCENTAGE REDUCTION

You can also negotiate your salary decrease in terms of percentage. This method is commonly practiced. The employer and the employee both agree on the percentage of reduction that works for them both.

4. RETAINER FEE

Disclaimer: In this context, my definition of a retainer fee differs from the actual meaning. I used this term so that everyone can understand the point in the simplest of terms.

Retainer fee in this context is when your employer pays you an amount of your salary, to retain your service. You’re being paid to be on standby for your company till things return to normal. Some companies adopt this strategy to prevent key employees from leaving them.

I saw this first hand when there was an oil price crash in 2015, an oil company was paying some staff 20% of their salary to retain them while they stayed at home. When things got back to normal, they resumed and continued receiving their normal salaries.

5. LEGAL BACKING

In all negotiations with your employer, make sure you have legal documents to back it up, while also accumulating evidence. Some employers might be cunning, fire you, or just default. With legal documents and evidence, this would be leverage for enforcement or curb sharp practices.

Conclusively, you need to hone your negotiation skills and have a pay cut benchmark. Your life and those around you might depend on it.

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