Compensation will undoubtedly be a key factor in your decision whether or not to accept a new position. However, few people take the time to really understand their economic choices, mostly because there are so many factors, including cost of living, benefits, and so forth.
To help you put your choices into perspective, I’ve divided those things that may affect your evaluation into two categories: the obvious factors and the “hidden” factors.
Below are the things that people think of first when contemplating a move (the obvious). The pros and cons of each of the following should be weighed both individually and then as a whole:
- Base salary – This one is fairly easy, a number-to-number comparison. However, there are many other things to consider when you’re thinking about changing jobs.
- Bonus/commissions – Perhaps your new position involves more or less commission pay than base pay. It may also possess more opportunities for you to earn bonuses based on performance or other criteria.
- Reimbursed expenses – What is your current company’s policy regarding reimbursement? How about the company with which you’re interviewing? Does your position even involve the need for reimbursement?
- Pension – More and more these days, companies aren’t offering pension plans to their new employees. Do you homework tofind out the facts. If the company is offering a plan, how does it compare to your current employment situation?
- 401K contributions – Once again, do some digging to find out if the company has a 401K plan and how much, if any, it contributes to it.
- Value of stock or equity – Does the company offer stock options as part of its compensation package? What kind of history do those stocks have? Does the company offer other kinds of profit sharing options?
- Other perks – Will you have access to a company car? An expense account? Does the company share its season tickets with the local professional sports team with its employees? Perks such as these means less money you have to shell out.
The (“hidden”) factors below can make a significant difference when you’re analyzing a potential move. However, they pose a problem because people don’t look at them closely, if at all.
- Cost of living differences – This includes property taxes, state taxes, and local taxes. Are they higher? Lower?
- Moving expenses – Will the company pay for part of the move or for all of it? If not, the cost can add up quickly in this category and cut deeply into any wage increase you might be receiving during your first year of employment with a new company.
- Travel expenses – More people are traveling longer distances to work and back every day. Will your new position offer a shorter driver or a longer one? With the price of gas, this is a pertinent question.
What a new job pays is much more than just salary and even more than salary and benefits. There are a lot of factors involved, some big and some small, and inattention to detail could leave you scratching your head at the end of the process.