Drop in salary - would you do it? given the economic climate?

[magpumpkin]

My DH has received his redundancy letter. They have to lose 2 salaries. On his first meeting he and the other possiblities each stated they would be prepared to take a drop in salary to remian i their position. It has now come to light (albeit rather underhandidly) that they will now been asked to attend office on thursday to disucss redundancy x 1 person now but with the remainder having to drop approx 9k each from there salary. Now given the job market would you be prepared to take this drop to remian in a job or try your luck with saying 'No'that amount is way to much etc etc? All opinions more than welcome please.....

depends what percentage of his original salary that is...? if it was 10% then yes definitely...if it was 50% then probably not

Exactly what I thought - how much would you have to live on if he took the drop?

I would be asking what he would be getting in return - if they would be losing 2 people (ie 2 salaries less to pay and 2 peoples work not being done) then I would expect if they are going to save 1 salary by the others dropping pay that each person who dropped should be doing that much less work.

Ie if there are 5 of them they should be moving to a 4 day week. Because otherwise the company are getting money for nothing arent they?

It would be 20% of his salary. It's so hard to work out his gross down to net as he has a compnay car and the tax implications are so hard to work out. But he would be going from about £2200 per month to approx £1700 per month. There are 4 of them at present up for redundancy with 2 on short list to go. but if they all agree to the drop then they would only lose 1 person.

A lot of companies are talking about this. In my field they tend to cut the hours as well - so a 20% cut means a 4 day week. But there are no other jobs to go to typically. Does your DH think he could find another job? I think this is relevant too.

Even if he wanted to show he recognised times are hard right now, could he ask to work 9 days a fortnight, or for an extra week's leave.

In that situation then if they are prepared to drop they should offer to drop for a proportional decrease in working hours.
Then when the economy picks, if the company needs more hours from them, they can again increase the pay to cover that.

If they agree to take a pay cut and conitnue working as they are the company are making a big saving in wages at no cost to themselves, and even when the economy recovers I expect they wont be in a hurry to return salaries back to the original level.

Depends on how easy it would be for DH to find a new job offering a similar salary I would think.

If his area of the market is ok, then he could leave and look for another job.

I think though I would be tempted to say yes, but try to haggle the salary up a little bit more if possible - and if still very low compared to know keep looking for new jobs whilst in this job.

I advise yur DH do the following:

Accept the pay cut to stay in work. Then having secured the job then immediately look for another job on better pay elsewhere. If he finds a job on better pay go to old employer and ask for his old salary to be put back to where it was before paycut plus a guaranteed 2 year contract during which time he cannot be made redundant.

If they refuse - leave immediately and go to new employer.

Its a dog eat dog world.

If he accepts the drop in salary, make sure he gets, in writing, an agreement that if they still have to make further redundancies, then that person will receive redundancy and notice pay based on the original (higher) salary.

Thanks so much for all your advice. It's a horrible time and DH's company are not very accomodating when it comes to talking.Am I write in thinking that they cannot use this drop in salary as a criteria for redundancy? ie - if he states 'no' to the drop they cannot use that against him in his score for determning who goes and who stays?

Have no HR background, but wonder if your dh could negotiate some threshold (linked to recovery of economy/his company) that would trigger a return to his current (previous) salary?