With skyrocketing unemployment rates due to Covid-19, many people are finding themselves searching for new job opportunities.
Companies are also using this time to pick up talented workers who are on the move. Some people may feel they can’t afford to be picky about their next opportunity right now, given the economic uncertainty and their personal financial situation.
However, for those who do have some flexibility or are being sought after, here are some considerations before accepting your new job offer.
First, understand how you are being compensated. What is your total compensation, including salary and bonus, and what is the pay structure? Are there long-term incentive awards? How are they paid out, and what has been the history of the company meeting growth targets to achieve payout objectives? What is your long-term compensation trajectory and career path?
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I have seen people choose a job for just a little more money when they should have been looking at their long-term earnings position in the new role.
Recently, a friend called me to help evaluate another opportunity for him that was for more money. However, once we went through the exercise of evaluating the long-term compensation, he realized the new opportunity wasn’t such a great deal.
Compensation is more than cash
Being shortsighted when it comes to compensation and not understanding all of your compensation components are two of the biggest mistakes I see candidates make.
Compensation isn’t just what you are going to make in cash and long-term incentives, but it is also the benefits provided to you. Questions about benefits should include:
- Is there a retirement plan like a 401(k) plan, and do they match and/or offer profit sharing?
- Is health insurance offered, and how much does the company subsidize?
- Is there short- and long-term disability offered? Who pays for it? (Best-case scenario is that they pay the premiums and impute that benefit to you, or the company grosses up your paycheck and you pay for it, so benefits come to you tax-free.)
- Is there group life insurance? Is any paid for by the company?
- How many paid days off do you get? How many holidays? Are sick days considered separate?
- How flexible is your work schedule? While you can’t quantify the value of this, it’s extremely important to most people and they’ll value this over many other financial rewards.
- Do they offer maternity/paternity leave or even just a leave of absence? Are there any daycare benefits?
- Are there any other interesting benefits offered? (These benefits include paid parking, commuter benefits or even legal services.)
The next big thing you should consider is your career track with this position.
To that point, what does this career path look like? Is there a career path and, if not, are you OK with that? Does this make sense for what you want for the long term? It’s OK if not, as long as it is a step toward what you want.
I have done this myself by taking a lateral move. I didn’t think I could move directly from practicing as a corporate tax accountant to working in personal finance, so I made a move from corporate tax accounting to personal tax before embarking on that personal finance route. I avoided being shortsighted on compensation and title, and ultimately got to where I wanted to be.
The last and arguably the most important thing to consider is the happiness factor.
Which opportunity will you enjoy the most? Consider if the work is more interesting or has fewer hours, and whether you like the people you will work with. Is there potential future travel and will you enjoy that? Is there flexibility in this job? What about this position appeals to you?
You can often gauge the happiness factor by looking at the length of time others have been with a company. A big mistake I often see is candidates not doing their research on the company and having blinders on through the recruiting process.
In figuring out the happiness factor, it is important to understand why the position is open. In the best-case scenario, the person formerly in that role was promoted or it’s a new role because the company is growing.
A worst-scenario is if there has been a lot of turnover in that particular position. If it’s a new position, make sure the role is clearly defined. You want to make sure you understand exactly what the role is going to entail.
It’s often not an apples-to-apples comparison when looking at two different opportunities, so it’s important to understand what you are being offered and what you are foregoing. Candidates will often negotiate to make up for lost benefits from another opportunity, so do not be scared to try to leverage your opportunities.
— By Patricia Sklar, wealth advisor at Brightworth
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.