How to take a step down the ladder

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5 ways to beat the tough job market

This is not your run-of-the-mill recessionary job market, and tactics that worked in years past won't get you behind a desk this time.

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NEW YORK (Fortune) -- The scenario is becoming all too familiar. Last month you were a CFO or senior vice president, then comes a layoff and the nasty realization that not only are there fewer jobs at the top to begin with, but jobs at your rung of the ladder are even scarcer. Moving down the ladder goes against every experience you've had in your career so far, but is it something you should consider?

Mitch Drew, 46, of Vancouver, recently accepted a position as an account executive at a television station where he was formerly general sales manager. He had been enjoying a nice upward career progression and was hoping to make station manager next. But when a change of management came in and he was downsized, he found options limited in his local industry. "I now report to a person who has my old job," he says.

Jim McGovern, 38, of Manhasset, NY, was laid off from a senior vice president job in leveraged finance and took a step down to a position as corporate treasury VP at a Fortune 500 telecom company, a former client, at 25% of his old salary. He took it in large part because he has a family to support and was spooked after seeing "a friend from Bear Stearns leveraged finance twisting in the wind for a year." With a family to support he couldn't afford to be that guy.

But your ego has to be ready to take the change in status. It can be disorienting.

"One of the downsides of taking a lesser job was that I was not in a position to contribute as much as I could have. It was a loss for me and a loss for the company," says Peter Rosen, Atlanta, who, after business slowed at his HR consulting company in the wake of 9/11, took a lesser job within human resources at another. "Because of my level I wasn't invited to certain meetings" - the type of meetings that he once ran.

But it's the smart companies that will harness the experience and talent that you have to offer. Says McGovern, "Even though I'm the lowest guy on the totem poll, my boss treats me like a professional and doesn't keep me in a back room someplace. I work for this guy, so if he wanted to dump all the grunt work on me he could. Instead, he decided to take advantage of what I do know."

If you can get past the blow to the ego and the disappearance of perks - goodbye company car, cell phone, window office - there are some nice upsides. Says Drew, "Less stress, more time with my family...and more freedom. Also, I don't have to deal with upper management or owners at a time when the business climate is challenging." Drew doesn't fear being on the firing line, because he's already been there, done that. Echoes McGovern, "I can do the basics in my sleep."

And there's always this: "You can take a lower job and really wow them," says California career coach and author Cynthia Shapiro. "You can make sure you are promoted to close to the job you had previously so by the time you leave it doesn't look like a backwards step on your resume."

However, while taking these lesser jobs can provide much-needed income and the opportunity to stay in the same town, not everyone is ready to make that kind of change. Leslie Padilla, former PR executive for Comcast Programming, cautions those in transition not to feel desperate and take the first job they are offered. Within her first month of severance, she received such an offer for a job at a much lower title and salary. She acknowledged the employer's generosity and instead offered to freelance.

But for many people, having a full-time job, even a downgrade, can be better for self esteem than reading the want ads. Says Georgia-based career coach Walter Akana, "I'd rather see people work in a lesser job where they can continue to network and feel good about themselves. I think it's important for people to be productive."

If you're thinking of taking a lesser job, career coaches advise you to keep the following in mind:

1. Make the most of your new job. This can be done by going to a high-status company - Google, anyone? - or picking up new skills. New York-based executive business coach Carol Vinelli suggests people use this time, whether it's freed up because of less catch-up work or shorter required hours, to develop themselves and do things they've always wanted to do. "Start a formal mentoring program, take classes, teach classes...it could be a big status symbol for your new company to say, 'We have someone on staff who is an adjunct professor at NYU.'"
2. You don't have to stay in the position forever. Most companies realize that when the market opens up you may leave so you'll have to assure them that you are interested in a long-term career there. That doesn't mean a long career staying in that particular job. Once you're in the door, your employer may see your potential and want to keep you on - in another capacity. If a better job elsewhere beckons, take it, but make sure you don't burn bridges. Do what you can to help fill your post and help with the transition.
3. You don't have to put the lesser job on the resume. It's very likely that your prospective employer won't probe who has been giving you a salary if you don't put anything down. "Running checks nowadays is expensive," says Shapiro. To avoid a gap in your resume, however, if you are consulting or taking classes, just say that you were doing that. No one will fault you for putting food on the table in this economy. "The stigma will be blown away," says Dan Finnigan, president and CEO of Jobvite, a recruitment software company.