The Stability Pay Cut
July 12, 2017
A consistent work schedule and a steady paycheck have rarely been the norm for senior leaders. But these days, they’re not a reality for most American workers, either, and it turns out many workers would happily take less money to get that stability back.
According to new report from JP Morgan Chase, 55 percent of Americans experience serious income fluctuations month-to-month, with take home pay varying by as much as 30 percent. It’s another byproduct of the complex job environment; lots of jobs are being created (222,000 in June alone) but wages aren’t growing, and organizations find themselves having to make significant adjustments in how they do operate to grow profitably. “A lot of job creation is not as simple as old job out, new job in. Organizations are going through significant structural change” says Scott Macfarlane, vice president, client development at Korn Ferry Futurestep.
All that change has created uncertainty for many workers alike, and increasingly they’d happily pay for some stability. Indeed, a 2016 study indicated that workers are willing to sacrifice 20 percent of their weekly salary to avoid a schedule set by an employer on a week’s notice, a common practice in service industry occupations. It seems staggering, even as, according to JP Morgan, most families can’t handle monthly income variations of $500 or more. “Workers are fully aware of the disruption happening around them. (But) they would rather trade developing new skills for a lower wage, and they would rather take a hit now to have a job in the long term,” McFarlane says.
A pay cut might not be something everyone can stomach, but an increasing number of workers in all fields are putting a higher priority on ideas other than money. Five years ago, employees surveyed Korn Ferry said that the number one reason behind joining an organization was its compensation and benefits package. Now, compensation and benefits ranks behind both culture (No. 1) and future career opportunities (No. 2) as reasons to join.
Underlying that shift in values is a return to stability. Macfarlane said that a lot of workers are anxious because they feel like even if they are performing well in their jobs, they still aren’t sure if their position will be around in three years.