Layoff dilemma: Would you accept a pay cut or a demotion to keep your job?

Even in a difficult job market, biopharma professionals have mixed feelings about salary cuts or demotions to avoid redundanciesAccording to two new BioSpace LinkedIn polls whose results match a recent ResumeBuilder.com survey.

When asked “Would you accept a pay cut to avoid being fired?” there was an almost even split BioSpace Survey responses. Just over a third (36%) of the 1,247 respondents said “no,” a third (33%) chose “yes,” and just under a third (32%) chose “maybe.” The “yes” votes were nearly identical to those from ResumeBuilder.com. Opinion poll The results showed that 31% of the 1,250 U.S. workers surveyed would accept a pay cut to keep their jobs.

Demotions were less popular with BioSpace Survey respondents. When asked “Would you accept a demotion to avoid being fired?” nearly half (49%) of the 1,065 respondents answered “no.” Less than a third (30%) chose “maybe,” while 22% chose “yes.” ResumeBuilder.com survey respondents were more open to demotions: 32% said they would accept a demotion to keep their job.

The results of the survey and poll are notable given the economic climate and the biopharma job market. The unemployment rate rose from 4.1% in June to 4.3% in July, according to the US Bureau of Labor Statistics. Data reported earlier this month. BLS also announced that there were 941,000 fewer vacancies on the last working day in June compared to the previous year.

In the biopharmaceutical sector, according to a study, almost half (43%) of biotech and pharmaceutical professionals are unemployed. BioSpace Employment Trends Report was published last month. The report also found that nearly a quarter (21%) of companies surveyed are planning layoffs in the second half of the year.

Salary cuts: who is making them and why?

When it comes to wage cuts, BioSpace Commentators on the survey questioned whether top managers would participate in retrenchments. In addition, Maria Granger, head of sales at Innovative Research, noted that an employee's willingness to accept a retrenchment depends on the terms and duration of the retrenchment, as well as the person's role, demographic and psychographic profile.

In her view, Granger provided “exaggerated scenarios” to illustrate two different situations:

• Asking the vice president of a startup who has no dependents and earns above the industry standard to take a three-month pay cut due to unexpected economic turmoil so that employees can keep their salaries and continue production.
• Telling a lab technician at a multibillion-dollar international corporation who has children and makes $20 an hour to reduce his salary to $18 an hour, indefinitely, while executives keep their salaries the same.

“I might tolerate the first scenario at this point in my life, but I certainly wouldn't tolerate being the lab technician in the second situation,” Granger wrote.

Demotions: Who carries them out and what are the disadvantages?

As far as demotions are concerned, similar to salary cuts, a BioSpace One commenter on the survey pointed out that a biopharmaceutical professional's willingness to take such an exam depends on his or her situation, more specifically on the stage of his or her career.

“Young 30s and on the fast track? Probably not,” wrote Matthew Clement, a life sciences specialist. “Early 50s, financially secure and offered a position with better work-life balance? Yes, I'd take that in a heartbeat. Not everyone aspires to be a go-getter vice president. Some are happy with a stress-free 9-5 job that pays enough to pay the bills.”

Another commenter pointed out the downsides of demotions. Stacey Berzak-Reyes, a senior clinical project manager at Parexel, wrote, “A demotion could potentially derail future career moves, as a recruiter or future employer could take it as a bad sign without asking why. It could even potentially prevent you from getting a call back. It would not be advisable unless you are nearing retirement and not looking for career advancement opportunities.”

Shortly before retirement: A reason for salary cuts and demotion

One biopharmaceutical executive, who asked not to be identified, said he would have taken a pay cut or a title reduction to stay with the company that laid him off last year, noting that it was difficult to find a job at his age.

They said they applied for dozens of jobs over 18 months through their network and LinkedIn and only recently found a job. The new job represents a multiple-level demotion and includes a salary cut of more than 60%. Due to the salary cut, this biopharma professional said he will be moving from a city with a high cost of living to a cheaper city.

Nevertheless, they were willing to accept a lower level position not only to secure full-time employment but also because they enjoyed their chosen field.

“I love science,” they said. “As long as I do science, I don't care what you call me. I don't care if I have reports or not.”

Negotiated departures: An alternative to wage cuts and demotions

Not everyone is willing to take a pay cut or demotion to avoid being laid off. Another biopharmaceutical professional, who asked to remain anonymous, said that if the company that laid her off last year had offered her a pay cut to stay, she probably would have turned it down. Her forced departure “felt like a slap in the face.”

She was even more concerned about the possibility of a demotion. She said that if the company had offered her one so that she could keep her job, she would have turned it down because it would likely have meant a step down from her management position to the same level as her direct reports.

There is one option this biopharmaceutical professional, now an independent consultant, would likely have chosen to avoid being fired: a negotiated exit. She explained that she could have announced her retirement or move and then likely let her time with the company run out over a three-month period.

“When you don’t have a choice, it feels different than when you’re sitting at the table and helping to shape things,” she said.

Consulting: For some, a way to avoid layoffs

Pilar Nava-Parada, a senior drug development consultant, is one of the biopharmaceutical professionals who avoided layoffs. She said she worked at OSI Pharmaceuticals, Astellas Pharma took over the company and asked her to work as a consultant for a year. She was to be a consulting physician, which was less responsible than the full-time position as associate medical director she had held at OSI. Astellas did not promise her full-time employment after the year was up.

Nava-Parada said she chose consulting, which she described as a career break since she was unable to pursue a more senior position during that time, for two reasons. She wanted to gain skills in various areas of drug development and felt it would be easier to find her next job if she was “employed,” so to speak. Nava-Parada doesn't regret that decision, because of what happened next.

“They offered me full-time employment,” she said of the medical director position she accepted. “But most importantly, I gained expertise and experience that I would not have had if I had not stayed and decided to take a career break and then do what they asked me to do.”

While Astellas eventually hired Nava-Parada, other employers let her go. For example, Pfizer laid her off in late 2021, after nearly eight years with the company. She said that while she was not offered a way to avoid the layoff, she likely would have accepted a demotion or pay cut in exchange for job security and Pfizer's benefits.

Layoffs as an opportunity rather than a loss

Although Nava-Parada has been laid off more than once, she has also found some positives in these experiences, believing that they can be opportunities rather than losses.

Nava-Parada applies that mindset now, spending half her time consulting and the other half on community involvement, which includes working with nonprofits that support cancer research. She noted that while she would love to work in biotechnology again, “this time has given me the opportunity to say that this is not the only way to do science or to do something for drug development and bring drugs to market. There are other ways I can put my skills to use in service to people.”

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