Salary pay cut when changing careers?

I wanted some advice on a career change I am working towards - I am an engineer and want to move into either Asset Management or investment banking, also open to management consulting. I've completed both a masters in electrical engineering and recently completed a masters in Finance from Harvard extension school . My question is - for all of you who might have made similar career changes - did you take a pay cut when making the change? From all I've looked into at glassdoor it looks like I might have to do that if I'm starting off as an analyst. (I was making 6 figures as an engineer).

Comments (36)

Feb 9, 2017 - 9:56am
tmathew, what's your opinion? Comment below:

Could someone help me with this question? What are good careers in the financial services that would best leverage an engineers skill that are not back office? I discussed with an MD at AIG recently and he said that portfolio analytics at fixed income places would be good. Problem is AIG is not hiring and he also said I should definitely expect a pay cut. Does anyone have experiences to share here?

Feb 9, 2017 - 10:11am
td12, what's your opinion? Comment below:

The reality is you don't have any finance experience so why should they pay you for your otherwise irrelevant credentials? They can find a fresh graduate with a econ/finance/engineering degree and pay them a fraction of what you're demanding. It's the nature of trying to switch careers this late in the game.

  • 2
Feb 9, 2017 - 10:39am
tmathew, what's your opinion? Comment below:

Thanks - I'm reconciling myself to the fact that most likely I will have to take a pay cut. If you dont mind me asking (since I noticed you work in fixed income AM), what are some of the major FI AM firms? I would think maybe engineering is valued at a fixed income analyst position because of the quant and analytical skills required.

Feb 9, 2017 - 8:24pm
TippyTop11, what's your opinion? Comment below:

Have you tried IB MBA Associate roles? Not sure why you would want to start as an Analyst when you have a Masters.

26 Broadway where's your sense of humor?
Feb 9, 2017 - 8:35pm
tmathew, what's your opinion? Comment below:

Yeah I've applied to associate roles too - that is online with no luck yet, but then again online applications can be demoralizing sometimes, you have no idea where they end up! Networking alot through linkedin - messaged ALOT of people - have not made the connection yet. Just trying to figure out how I can best leverage my engineering skills and finance education to make this move. I'm really into both the macroeconomics side of global currency and stock markets as well as the financials of individual companies (as I've invest in stocks on the side) so I'm open to financial consulting too. Are AM firms 'easier' to break into compared to IB, you think?

Feb 9, 2017 - 8:39pm
TippyTop11, what's your opinion? Comment below:

AM firms are easier IMO, but it is a shrinking field with the DOL regulation and more roles require programming and coding skills. Best of luck on your search.

26 Broadway where's your sense of humor?
Best Response
Feb 9, 2017 - 8:40pm
jmoney2405, what's your opinion? Comment below:

Paycut for potential career switch? (Originally Posted: 01/22/2014)

So many people on here state they are looking to make a career change either into finance or out of. I am looking to make a change from an operational role to a more analyst/trader type role. Tough to do no doubt but I've come across an interesting opportunity that should take me that direct. Problem is there is a paycut involved. I'm living in a high cost of living city (think NYC, Chicago) and this would take me to a more low cost city (Pittsburg, Cleveland, etc). but the pay cut would be roughly 25%. If you use a cost of living calc I would be making out but there are those fixed costs like student loan payments and car payments that don't change with location.

Now they do have profit sharing and bonuses which if they're maxed out would take me to where I am now for the year but you can't count on that. After working so hard to get raises it's tough to give it back even if in the long run it might pay off.

Just want to hear some of your experiences with having a decision like this and if it paid off in the end.

Give me a kid whose smart, poor, and hungry...............
  • 5
Feb 9, 2017 - 8:41pm
Skinnayyy, what's your opinion? Comment below:

If it's what you want to do, I say go for it. I was working in IT (Hate it) and wanted to switch into finance. I took a paycut of more than 30% to be in the industry so I would be able to work my way in. In the end it will be worth it. Money doesn't buy happiness!

make it hard to spot the general by working like a soldier
Feb 9, 2017 - 8:43pm
Blueapple, what's your opinion? Comment below:

Negatives to switching: Immediate 25% cut in base Have to move

Positives to switching: Much lower COL In a more prestige role In a position that you'd enjoy more Can meet (and in future exceed) current earnings potential

I say go for it

Feb 9, 2017 - 8:50pm
joey joe joe shabadoo, what's your opinion? Comment below:
bottera:

chicago isn't a high col city

Fuck yeah it is. Maybe not compared to NY or SF, but it's pretty high. I lived there for ~7 years.

To the original poster, make the switch if you can afford it financially. I recently took a 20% cut to move into a FI analyst on the buyside, making the transition from a finance role at a F500 company. I actually enjoy going to work now, and am much more motivated. Best of luck.

"Give me a fucking beer", Anonymous Genius
  • 1
Feb 9, 2017 - 8:46pm
prospie, what's your opinion? Comment below:

I'll say it a hundred times: it doesn't matter worth a shit what you're making at your level. Don't hesitate. Especially if your daily work responsibilities would be more interesting and make you happier.

Feb 9, 2017 - 8:49pm
Scott Irish, what's your opinion? Comment below:

Listen to all the advice above.

I'll act like the Ghost of Christmas Future, here to warn you - I stayed in accounting way, way, way too long. I'm trying to switch and it's not easy. Go do what you think you'll enjoy.

Feb 9, 2017 - 8:51pm
FrontierInvestor, what's your opinion? Comment below:

I think you gotta do it. Unless you're supporting a family, you're probably going to net out to a 10% loss of relative income but you're earning potential skyrockets and you've got a seat at the table. And that's what matters, a seat at the table.

Feb 9, 2017 - 8:52pm
Calculus, what's your opinion? Comment below:

Are you seriously asking this question?

Why would you not take the new job? Make a list on a sheet of paper of pros and cons of NOT taking the job. The only pro would be that you don't take a cut in pay. Everything else will be a con. And don't you forget to write this con first: the possibility of never getting an opportunity to move to FO.

Do you have another FO offer which pays high? If not, I totally fail to understand why you asked the question. I mean, really?

Feb 9, 2017 - 8:53pm
consultant 13, what's your opinion? Comment below:

Pay decrease to move into consulting (Originally Posted: 08/01/2013)

I am curious to hear what people think about taking a step back in pay to transition industries. I have been trying to break into consulting and finally have an offer but the starting salary is less than I make now. The consulting industry offers much better future compensation than my current industry. I am having a hard time accepting that I will have to take a step make to take two steps forward.

Has anyone else made this decision?

  • 1
Feb 9, 2017 - 8:54pm
Nefarious-, what's your opinion? Comment below:

Factor in happiness level, career development and career potential and then make your decision - don't base everything off of salary.

You're born, you take shit. You get out in the world, you take more shit. You climb a little higher, you take less shit. Till one day you're up in the rarefied atmosphere and you've forgotten what shit even looks like. Welcome to the layer cake, son.
  • 1
Feb 9, 2017 - 8:55pm
CRE, what's your opinion? Comment below:
Nefarious-:

Factor in happiness level, career development and career potential and then make your decision - don't base everything off of salary.

This, 100%.

EDIT: Also, terrific signature quote from a terrific movie

Commercial Real Estate Developer

Feb 9, 2017 - 9:00pm
Nefarious-, what's your opinion? Comment below:

It's one of the best movies - that line speaks so much to life in general.

You're born, you take shit. You get out in the world, you take more shit. You climb a little higher, you take less shit. Till one day you're up in the rarefied atmosphere and you've forgotten what shit even looks like. Welcome to the layer cake, son.
Feb 9, 2017 - 8:56pm
consultant 13, what's your opinion? Comment below:

Thanks guys. I agree 100% as well. I guess I am having a moment of pride now that the time has finally come.

Feb 9, 2017 - 9:02pm
consultant 13, what's your opinion? Comment below:

4% actually. I was expecting an increase during negotiation and they came back firm on the original number so in my mind I felt like it was much more.

Feb 9, 2017 - 8:58pm
Jimbo, what's your opinion? Comment below:

A career is like poker, all the money is at the final table.

If you can make more down the road, you'll never even remember the minor hit at the beginning.

  • 1
Feb 9, 2017 - 8:59pm
CRE, what's your opinion? Comment below:
consultant 13:

Thanks guys. I agree 100% as well. I guess I am having a moment of pride now that the time has finally come.

Have pride in the fact that you've been trying to break into a great (and ultimately lucrative) industry and pulled it off, man. Good shit

Commercial Real Estate Developer

Feb 9, 2017 - 9:01pm
yeahright, what's your opinion? Comment below:

It's all about the money, screw happiness. However, this means future money not just present. Go with whatever has the best career outlook.

Frank Sinatra - "Alcohol may be man's worst enemy, but the bible says love your enemy."
Feb 9, 2017 - 9:03pm
consultant 13, what's your opinion? Comment below:
CRE:
consultant 13:

Thanks guys. I agree 100% as well. I guess I am having a moment of pride now that the time has finally come.

Have pride in the fact that you've been trying to break into a great (and ultimately lucrative) industry and pulled it off, man. Good shit

Thanks for the encouragement! That is a good way to look at it.

  • 1
Feb 9, 2017 - 9:04pm
Window View, what's your opinion? Comment below:

Congrats on the accomplishment! Don't interpret the pay decrease as an insult. Pat yourself on the back and go buy yourself a whiskeycigarsteak dinner.

Listen, here's the thing. If you can't spot the sucker in the first half hour at the table, then you are the sucker.
  • 1
Feb 13, 2020 - 11:17am
Arnie S, what's your opinion? Comment below:

Oldie but a goodie. Give credit to yourself where credit is due.

Consumption smoothing is retarded. If you stay in this game for a handful of years, money will be the least of your worries. Live it up, because this is the one time in your life where you might actually have time to spare.
Feb 9, 2017 - 9:05pm
Jimbo, what's your opinion? Comment below:

Accusantium dolorum magnam cumque enim sed sit voluptatem. Rerum ut rerum quis.

Facere voluptatem consequatur sed fuga debitis illo esse natus. Et ut ut expedita incidunt ullam est sed. Pariatur et vel voluptas.

Feb 9, 2017 - 9:06pm
Anonymous., what's your opinion? Comment below:

Sint quos aut iusto molestiae consequuntur eligendi. Vel deserunt magni est fugiat. Tenetur cum nihil corrupti quibusdam exercitationem.

Laboriosam illo aliquam sed id. Magni iure ut architecto aliquam provident aperiam ratione perspiciatis. Aliquam accusantium cumque veritatis fugit.

Dolores fuga voluptatem doloremque incidunt. Dolores necessitatibus beatae omnis voluptatem qui veritatis.

Ut quos totam porro similique in rerum. Nihil veniam perspiciatis qui distinctio. Beatae voluptas molestiae ullam dicta eaque.

Start Discussion

Career Advancement Opportunities

September 2022 Investment Banking

  • Jefferies & Company (▲05) 99.6%
  • Lincoln International (= =) 99.2%
  • Bank of America Merrill Lynch (▲04) 98.8%
  • Financial Technology Partners (+ +) 98.5%
  • Evercore (▽02) 98.1%

Overall Employee Satisfaction

September 2022 Investment Banking

  • Jefferies & Company (▲12) 99.6%
  • Greenhill (▲07) 99.2%
  • Evercore (▲01) 98.8%
  • PJT Partners (▽02) 98.4%
  • Macquarie Group Limited ABN (▲21) 98.1%

Professional Growth Opportunities

September 2022 Investment Banking

  • Jefferies & Company (▲05) 99.6%
  • Lincoln International (▲03) 99.2%
  • PwC Corporate Finance (▲12) 98.8%
  • Bank of America Merrill Lynch (▲05) 98.5%
  • Houlihan Lokey (▲05) 98.1%

Total Avg Compensation

September 2022 Investment Banking

  • Director/MD (10) $613
  • Intern/Summer Analyst (318) $407
  • Vice President (38) $392
  • Associates (208) $257
  • 2nd Year Analyst (130) $163
  • 3rd+ Year Analyst (18) $159
  • 1st Year Analyst (436) $151
  • Intern/Summer Associate (83) $150