Find out how to evaluate a job offer and what's important to consider when deciding whether to accept a job offer or to make a career change.
Money Girl
187 MG How to Evaluate a Job Offer
Earning your degree online doesn't mean you have to go about it alone. At Capella University, we're here to support you when you're ready. From enrollment counselors who get to know you and your goals, to academic coaches who can help you form a plan to stay on track, we care about your success and are dedicated to helping you pursue your goals. Going back to school is a big step, but having support at every step of your academic journey can make a big difference. Imagine your future differently at Capella.edu. Curious how equity compensation can help build employee financial confidence and move your business forward? Tune in to the latest episode of Morgan Stanley at Work's Invested at Work podcast, where we explore the power of financial benefits and how they can help your employees in the workplace and beyond. Listen now by visiting morganstandley.com/investedatwork or stream on Apple or Spotify. Because we believe that when employees thrive, your company thrives too. Again, visit morganstandley.com/investedatwork to listen today. Hi, everyone, and welcome back to Money Girl's Quick and Dirty Tips for a richer life. I'm Laura Adams. When you're evaluating a career change, like taking a new job or becoming self-employed, it's important to weigh your options carefully. There's usually much more to an employment offer than just the face value of the salary or hourly wage. In fact, benefits other than gross pay can make up as much as 30% of a compensation package. If you're thinking about working for yourself, you'll need to factor in additional expenses that come with being your own boss. There are lots of financial and non-financial issues to consider before you make a final decision about your next career move. This topic was inspired by a great email I received from Chris R, who's trying to decide whether to make a big career move or not. Let's begin with a situation where you receive a job offer from a new employer. The work and pay sounds great, but you feel torn because you get really great benefits from your current company and you like working with your boss. How do you make an apples-to-apples comparison so you'll know which situation would be better for you in the long run? I'll break down everything you need to review into six categories. Income, benefits, expenses, time, career path, and environment. The base salary or hourly wage plus commissions and bonuses will obviously play a huge role in whether you want to accept a new job offer or not. Add to that amount any additional reimbursements or allowances that you'd receive for expenses, such as your training, auto mileage, cell phone, internet, relocation, travel, and client entertainment. Company reimbursements are great because they're generally not taxable, so the more of those you get, the better. Try to estimate your future potential income. There's one opportunity offer an income guarantee, an annual cost of living adjustment, raises based on performance, a growing customer base, or a more lucrative sales territory, for instance. Think about how those factors could positively or negatively influence your earning potential over the next few years. For some, a jobs benefit package is just as important as the size of the paycheck. Find out what insurances you'd be eligible for and how much they'd cost each month. Ask for details about what retirement benefits come with a job, such as a 401k or pension and whether the employer offers matching funds, profit-sharing, health savings account contributions, stock ownership, or any other type of savings or performance incentive. Consider how long you have to be employed before you're eligible for benefits and what the vesting schedule is. Vesting is the length of time you have to stay employed before you fully own employer-provided funds, such as 401k matching or profit-sharing. Other valuable benefits might include the use of a company vehicle, cell phone, computer, or tuition reimbursement, since the value of benefits can be a substantial chunk of your total compensation. It's very important to review the entire package carefully. Play it safe and ask to see a company's benefits enrollment packet so you can review it and verify the details. Also, don't assume that a big company will have a better benefits package than a small company. The Human Resources Department should be willing to answer any questions that you might have. You'll want to add up all estimated expenses or savings that would come with a new opportunity. If you won't be eligible for insurance benefits for six months, for instance, factor in the cost of purchasing a temporary private policy. Having a much longer commute to your office or travel time to customers could mean spending much more money on auto maintenance, gas, tolls, and insurance. Having the option to work from home could save you money on auto or clothing expenses, but cost you money for a computer or office equipment, for instance. Additionally, being self-employed means that you have to pay self-employment tax, which is a significant expense. I covered that topic in episode 129, from employee to self-employed. So please listen to that podcast for more information on how the self-employment tax works. If a job requires you to move to a new city, you'll need to evaluate all the expenses of relocating and how much, if any, the company will reimburse. Research the new city's cost of living, including housing, local property taxes, state taxes, and insurance rates for auto and homeowners to see how they compare to your current expenses. One of the most difficult variables to estimate is how much time you'll spend working in a new career. If you're paid by the hour and have to work lots of hours, you might welcome additional overtime income. But if you earn a salary and consistently work really long hours, or have to travel extensively, then you might end up earning much less than you do now, at least on an hourly basis. If it's possible, talk to someone who has a similar job and ask about their typical workload. Get clarity about what industry events, conferences, or trainings you'd be required to attend each year. I love learning and anything that makes learning easier. If you're a parent and your child needs some homework help, then IXL is a right for your family. IXL is an online learning program for kids covering math, language arts, science, and social studies. IXL has interactive practice problems for topics from pre-K to 12th grade and everything is organized by grade and subject. As kids practice, they get positive feedback, awards, and explanations for wrong answers. IXL figures out what your kids need more help with, and recommends more topics to practice. Their videos, lessons, sample problems, and learning games, too. One subscription to IXL gets you all subjects and all grade levels. Membership started just $9.95 a month. It's no wonder IXL is used in 95 of the top 100 school districts. I think the positive feedback that IXL gives is really crucial when it comes to learning. So make an impact on your child's learning. Get IXL now, and money girl listeners can get an exclusive 20% off IXL membership when they sign up today at ixl.com/moneygirl. Visit ixl.com/moneygirl to get the most effective learning program out there at the best price. Imagine earning a degree that prepares you with real skills for the real world. Capella University's programs teach skills relevant to your career so you can apply what you learn right away. Learn how Capella can make a difference in your life at Capella.edu. Curious how equity compensation can help build employee financial confidence and move your business forward? Tune in to the latest episode of Morgan Stanley at Work's Invested at Work podcast, where we explore the power of financial benefits and how they can help your employees in the workplace and beyond. Listen now by visiting morganstandley.com/investedatwork or stream on Apple or Spotify, because we believe that when employees thrive, your company thrives too. Again, visit morganstandley.com/investedatwork to listen today. Also, try to get a feel for the flexibility you'd have for making personal appointments and commitments. If you're considering starting your own business, you'll have a huge amount of flexibility, but will probably have to work extremely long hours to get your enterprise off the ground. Okay, we've talked about the financial considerations, income, benefits, expenses, and time. Now, let's consider a couple important non-financial aspects of making a career change, your career path, and the working environment. If your career path is what's most important to you, all the financial aspects of a job might take a back seat. If you're passionate about your work, or are confident that a particular job will ultimately take you where you want to go, then receiving less compensation may be worth it. If you're counting on getting a promotion, learning certain skills, receiving a specific job title, or relocating to a more desirable location, try to figure out how quickly you might be able to achieve your goals. A very important feature of a job is the day-to-day work environment that you'll be immersed in. I'm sure you realize that the people you work with can turn a job into a heaven or a hell. Try to meet the people you'd work with, such as your boss, supervisor, or other important co-workers, and get a tour of the office where you'd be working. If it's possible to job shadow the employee you'd replace, or someone with a similar job, that always provides a huge amount of insight about the culture and environment of a company. Ask yourself if a new company has a reputation, culture, and core values that you'd be proud to uphold. Find out if they operate by a code of conduct, and if you could review that document. If you're thinking that this sounds like a lot of information to ask a potential employer about, don't let that deter you. I've interviewed and hired many people and can tell you that the ones who didn't ask lots of questions concern me. The candidates who asked intelligent questions and seemed interested in making sure the company was a good fit for them made me feel confident that they'd succeed if they were hired. That may even be enough to make the employer boost their compensation offer if they really want you. And speaking of compensation, how do you know how much you should be paid? Well, there are lots of good resources like salary.com, payscale.com, and the Bureau of Labor's website at bls.gov to help you get a handle on how much your skills and experience are worth in a particular job market. And one final quick and dirty tip is to ask for everything in writing before you accept a job offer. I want to thank everyone who's downloaded a money girl audio book or ebook and encourage you to submit a review wherever you bought it. You can get the audio books, money girl's guide to retirement planning and 10 steps to a debt-free life at audible.com or in the iTunes store. Or if you prefer reading, 10 steps to a debt-free life is also available as a Kindle ebook on Amazon.com. I'm glad you're listening. Cha-ching. That's all for now. Her to see of money girl, your guide to our richer life. Earning your degree online doesn't mean you have to go about it alone. At Capelli University, we're here to support you when you're ready. From enrollment counselors who get to know you and your goals, to academic coaches who can help you form a plan to stay on track. We care about your success and are dedicated to helping you pursue your goals. Going back to school is a big step, but having support at every step of your academic journey can make a big difference. Imagine your future differently at Capella.edu. Curious how equity compensation can help build employee financial confidence and move your business forward? Tune in to the latest episode of Morgan Stanley at Work's Invested at Work podcast, where we explore the power of financial benefits and how they can help your employees in the workplace and beyond. Listen now by visiting morganstandley.com/investedatwork or stream on Apple or Spotify. Because we believe that when employees thrive, your company thrives too. Again, visit morganstandley.com/investedatwork to listen today.