Should candidates take pay cuts in the post COVID-19 period?

Salaries should be based on the skillsets of the candidates and not their circumstances point out HR leaders

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The economy has been in a bind since last year, and COVID-19 this year has served as the final nail in the coffin. With many people losing their jobs across sectors, not only has the already swelling talent pool flared up, but the unemployment rates have increased as well.

While many organisations froze hiring, some went for cuts in salaries of their existing employees. Six months later, businesses have started to open up and many are hopeful that the job market will do so as well. However, there have been cases where candidates have been asked to take pay cuts at interviews!

Experts are of the opinion that it is better to have something in hand rather than nothing, and therefore, during such perilous times, candidates should not let go of an opportunity to get a job again because of pay cuts. However, some HR leaders HR Katha spoke to assert that salaries should be determined based on skillsets rather than the present situation.


Anuranjita Kumar

“If I don’t have the required skills and have yet to learn, taking a pay cut is absolutely fine, because that’s the price I pay to learn.”


Minakshi Arora, chief human resources officer at Trident Group India, believes taking such pay cuts will create a vicious cycle in the economy. “If one goes ahead with it, issues will be created for the others. Companies need to at least match the salaries the candidates were drawing earlier. The market has picked up and everything is returning to normal. So, you need to assess. Inflation is at its highest point and expenditures are rising. Personally, if this vicious cycle is triggered by a couple of people, it will become a trend in the industry. We are not asking people to work less, in fact they are working more now.”

Arora also cautions that if an organisation is asking the candidate to take a pay cut, the person should really reconsider joining them.

Some of the HR leaders also emphasise on the fact that people should be paid for their skills independent of what is happening around them. Every role demands certain salary caps and the candidates are paid accordingly. If the candidates possess the requisite skills, they should be paid what they deserve.

Lakshmanan M, chief human resources officer, L&T Technology Services, strongly feels that while asking for a pay cut is wrong, expecting a salary hike with a job switch is equally problematic. “I think you pay for the job, it doesn’t matter if it’s a pay cut or a hike. As a company, if I am interviewing someone, say a software engineer, I will pay the person a salary his/her role gets as per my company. Industry today has reached a false position. That means, people still have the age-old notion that they will get a certain hike on their salary when they change their job. This is becoming a norm, which is not right. The whole notion is wrong.”

“A company pays the candidate a salary for the role. When people move from one job to another, under normal circumstances, and expect to get a hike, then why is it wrong to take a pay cut amidst an unusual scenario, such as the COVID pandemic? They will not perform any better than they are currently performing, yet they expect a hike. If that is the way of negotiating, then during the pandemic, they should be ready to take a cut in salary too, right?,” he adds

Lakshmanan MT further explains that payment for a role is decided based on the internal parity and the ability of the organisation to pay. If the role should get 50K as per the organisation, they will pay that irrespective of what the candidate was earning before.


Lakshmanan MT

When people move from one job to another, under normal circumstances, and expect to get a hike, then why is it wrong to take a pay cut amidst an unusual scenario, such as the COVID pandemic?”


Everything depends on whether the candidates have what it takes to deliver in the role that they are applying for. If not, they should be ready to accept a salary cut. However, if a hiring manager tries to take advantage of the situation a candidate is in, in terms of financial stability, the candidate should think long and hard before joining.

Anuranjita Kumar, senior HR leader and practitioner, thinks pay cuts are related to a candiate’s skillsets or market value today. “It is about getting paid as per the market for relevant skillsets. It is as simple as that. “You may have been highly paid because you are a tenured employee in an organisation. However, today, tenure doesn’t pay you anything if you don’t have skillsets. Somebody will pay you lesser money because you are not making that level of contribution. Therefore, that should be acceptable. What employees should look at is to get paid the value they can bring to the table. In India, many times, promotion and growth have been hierarchy driven.”

Experts also believe that if people set themselves back too much, they will take a lot of time to catch up. If somebody is trying to take advantage of their joblessness, the job seekers should really consider whether they want to work with that person.


Meenakshi Arora

“If this vicious cycle is triggered by a couple of people, it will become a trend in the industry. We are not asking people to work less, in fact, they are working more now.”


Kumar explains, “It of course depends on the financial pressure on you. The person may choose the money, not the job. It depends on personal circumstances. If I have great skillsets, then the right hiring manager will not take advantage of my situation. If, however, I don’t have the required skills and have yet to learn, taking a pay cut is absolutely fine, because that’s the price I pay to learn. Now, if I move from a big company to a smaller one, the latter will have a certain budget. However, if I am move to a similar size company and I am told that I would have been paid 20 per cent premium had I applied while working and while the said company wished to hire, then I am certainly being short-changed. Then, it becomes an ethics issues.”

Like Arora, Kumar too says that if an organisation is taking advantage of the situation, then it is certainly not a great place to be working in.

Therefore, salary cuts should be determined on the basis of the candidates’ qualities and what they can add to the organisation. It should not be decided on the basis of their present circumstances.