5 Good Reasons Why People Accept Less Pay

I only accept less pay for very good reasons. A great boss, good benefits, or a damn nice chicken rice stall in the canteen. And I’m not the only one: All over the country, you’ll find Singaporeans who value their work over a bigger pay cheque. Are they nuts? Masochists? Monks? Some combination of the three? In this article, I look at good reasons to (sometimes) suffer the smaller pay:

 

holding up a cheque

My pay cheque: A bank teller’s only source of amusement.

 

Smaller Pay Cheques: The Strangest Investment

When people settle for smaller pay, there’s two main reasons.

One is that they passionately believe in what they’re doing. I won’t discuss this group, because they live more fulfilling lives than I ever will, and interviewing them would trigger a jealous, bitter rage in me. I save those for Mel Gibson impersonations.

The other reason is career investment, when the lower pay is tolerated for high returns. I dare say that artist who got paid in Facebook shares made a better investment than fire-proof underwear at a KISS concert. Like him, some people will temporarily settle for less pay, because of…

  • Early Bird Benefits
  • Ownership
  • Better Benefits
  • The Company’s Reputation
  • The Boss’s Reputation

 

Person with fake eyes pasted over his eyelids

Agree to less pay for shorter work hours? Why’s that? I never sleep anyway.

 

1. Promotion Prospects

What’s the best way to join senior management? Be there at the start.

New companies tend to pay less, but have smaller head-counts. Assuming your work is decent, you’ll advance as later hires fill positions below you.

With big companies, the situation is the opposite: a high headcount with bigger starting pay. Advancement is harder; you may be competing with 40+ employees for the same promotion. And as for the political backstabbing that ensues, just imagine ancient Rome with suits instead of togas.

 

People in an elevator

“You’re new here right? Because this elevator is what the boss meant by moving up.”

 

Edrian Poh is a materials engineer, who recently quit a $4,500 a month job. He now works in a car parts distributorship, earning $4,200 a month. Why choose the lesser paying job?

At my old workplace there were a few hundred employees, and promotion opportunities were few. Here, I’m one of the early birds; the company only has two dozen people right now, with plans to expand. I’m hoping that’s a chance for me to advance.”

 

2. Ownership

Some companies compensate for small pay by giving you ownership. A typical example is paying employees with company shares.

This is approach carries risk, but it’s got a high pay-off: If the company turns out to be the next Google, then you’re set for life. But if it flops, your share certificates are effectively toilet paper. People I spoke to were mostly divided on this. Property investor Charlie Sng, for example, warns that:

I would only accept such terms from a well established company. I would hesitate to accept it from a small business; in three years, how do I know how well the business will do?

I would also have to be very clear on the terms, such as whether such shares can be sold.”

 

Construction work

“Goddamit, drill faster, our stock’s dropping.”

 

Sound engineer Elise Loy adds:
I love ownership. When I have shares, I get more motivated to get up and go to work. And really, you start to enjoy working because you see the point in what you’re doing. To each her own, but to me that’s worth a slightly smaller pay cheque.”

3. Better Benefits

Insurance can cost thousands every year (premiums vary), and unless you’re a prime candidate for the fourth Stooge it’s seldom used. So it’s great when a company pays your insurance.

Yet this is something a lot of job seekers overlook. A Human Resource consultant, who wants to be known as Christine, raises a warning:

A common mistake is when job seekers overlook benefits. Sometimes a job may pay $200 or $300 less, but the benefits exceed that amount.

If you have to pay your own insurance, how much would it cost you? You should get an estimate before picking a job with fewer benefits but more pay.”

Insurance aside, there are also benefits like telecommuting, free meals, or a company car. Many of these benefits indirectly contribute to your income. By telecommuting, for example, you can save hundreds on monthly transport fares.

For more on saving money, by the way, follow us on Facebook. It’s kind of our thing.

 

Man with dog and laptop on couch

“Yeah, I hired that meat industry expert. He’s right next to me.”

 

4. The Company’s Reputation

You’ll find any number of finance graduates willing to work at JP Morgan for a pittance. Just for a while.

It’s common for job hoppers to leverage off a company’s reputation; if I can claim I worked at Microsoft or Google, I probably won’t have a hard time getting an IT job elsewhere…and negotiating better pay once I’m there. But Christine thinks I’m taking a narrow view of this:

To me it’s not so much about collecting names. When you work for an industry leader, you have an inside view on their process and work culture. You are offering that to your new employer, and you can negotiate on the value of that.

I’d be quite happy to take a pay cut and work at entry level for an industry leader. But only if it means proximity to their core business aspects.”

 

Window washer

I helped to provide clear perspectives at Google.

 

5. The Boss’s Reputation

This is related to point 4. The difference is, you’d be taking a pay cut to work with some famous figure, instead of an industry leader.

Christine mentions this is common in some industries, particularly arts and F&B (Food and Beverage). She says that:

In culinary arts and music, things are very much based on personality. You can see in kitchens, for example, that the other cooks sometimes behave as if their only boss is the chef; the restaurant owner doesn’t even matter. If the chef leaves then they will all leave with the chef.”

 

Making dumplings

My head chef makes 200 dumplings an hour. The quota’s 200 an hour. Guess why I work here.

 

So what, this is some kind of insane cult thing?

Christine insists that:

It makes perfect sense. If Steve Jobs were still alive and he offered you a job, even if the pay was half what you’re making, wouldn’t you jump on it? The value of what you learn, of their personal recommendation, more than makes up for your smaller pay.”

Image Credits:
skrycheBuzz Paradise, uberculture, Irargerich, Plutor, boltron, avlxyz

Would you take a pay cut for any of these reasons? Comment and let us know!

Get more Personal Finance tips and tricks on www.MoneySmart.sg

Click to Compare Singapore Home Loans, Car Insurance and Credit Cards on our other sites.



More From MoneySmart
Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • US ambassador recovers from knife attack praised by N. Korea
    US ambassador recovers from knife attack praised by N. Korea

    The US ambassador to South Korea, Mark Lippert, was recovering from surgery Thursday after having his face and arm slashed by a knife-wielding activist in an attack applauded by North Korean state media. The United States condemned the "act of violence" which saw the ambassador rushed to hospital where his condition was described as stable after two-and-a-half hours of surgery that included 80 stitches to a deep gash on his right cheek. During the assault, Kim screamed a slogan in favour of …

  • Sy moves up, Villar enters Forbes list of billionaires
    Sy moves up, Villar enters Forbes list of billionaires

    Eleven Filipinos are included in Forbes’ 2015 list of richest people in the world. Filipino-Chinese tycoon Henry Sy Sr. continues to be the wealthiest man in the Philippines. The 90-year-old SM supermalls, banking and property tycoon ranked 73rd among the world’s richest with an increased net worth of $14.2 billion from $11.4 billion last year. Sy’s net worth was attributed to the continued growth of his SM Investments Corp. and his more recent venture, the City of Dreams Manila resort and …

  • New Moro rebel group emerges
    New Moro rebel group emerges

    A radical Muslim cleric trained in the Middle East and considered one of the leaders of the Bangsamoro Islamic Freedom Fighters (BIFF) has broken away from the terror group to form his own band of jihadists who are now reportedly providing sanctuary to bomb expert Basit Usman and at least five foreign militants, the military said yesterday. Armed Forces of the Philippines (AFP) spokesman Col. Restituto Padilla, citing reports from the field, said the Justice for Islamic Movement (JIM) was …

  • US billionaire says WWII Japanese ship found in Philippines
    US billionaire says WWII Japanese ship found in Philippines

    Microsoft co-founder Paul Allen said Wednesday he had found one of Japan's biggest and most famous battleships on a Philippine seabed, some 70 years after American forces sank it during World War II. Excited historians likened the discovery, if verified, to finding the Titanic, as they hailed the American billionaire for his high-tech mission that apparently succeeded after so many failed search attempts by others. Allen posted photos and video online of parts of what he said was the …

  • World's oldest person wonders about secret to longevity too
    World's oldest person wonders about secret to longevity too

    TOKYO (AP) — The world's oldest person says 117 years doesn't seem like such a long time. …

  • Billionaire finds wreck of WWII ship in Phl
    Billionaire finds wreck of WWII ship in Phl

    Microsoft co-founder Paul Allen says he has found the Japanese Navy’s biggest warship at the bottom of the sea in the Philippines, 70 years after US forces sank it. Allen posted a photo on Twitter on Tuesday of the World War II battleship Musashi’s rusty bow, which bore the Japanese empire’s Chrysanthemum seal. The American billionaire, who has also pursued space exploration, said his luxury yacht and exploration ship, the M/Y Octopus, found the Musashi one kilometer (1.6 miles) deep on the …

  • Australian drug smugglers being taken to Indonesian island for execution - media
    Australian drug smugglers being taken to Indonesian island for execution - media

    By Jane Wardell and Beawiharta SYDNEY/DENPASAR, Indonesia (Reuters) - Two convicted Australian drug smugglers were removed from a prison in Bali on Wednesday to be taken to an Indonesian island where they will be shot by firing squad, Australian media reported. The planned executions of Myuran Sukumaran, 33, and Andrew Chan, 31, have ratcheted up diplomatic tensions amid repeated pleas of mercy for the pair from Australia and thrown a spotlight on Indonesia's increasing use of the death …

  • Ohio mom, boyfriend guilty; child emailed teacher for help

    PORTSMOUTH, Ohio (AP) — A woman and her boyfriend pleaded guilty to raping her young children and were sentenced to prison on Wednesday, a year after one of her daughters emailed a teacher for help and said she and her siblings were being chained to their beds, deprived of food and sexually assaulted. …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options