Receiving an offer for a new career opportunity can be an exciting event in your life. But even if a prospective employer promises an attractive salary, other benefits can make a big difference in whether or not you come out ahead financially. To decide if a job switch makes good financial sense, you need to evaluate the full compensation package.
Health and wellness
Medical/dental insurance: How do the new coverage options compare with your existing plans, and how much would the employer contribute?
Other benefits: Does the new company offer subsidized child care or allowances for dependent care? What about tuition reimbursement and fitness subsidies?
When would you be eligible for these benefits? Depending on your start date, there may be some lag time between coverage under your old employer and coverage under the new employer.
Before you leave: If necessary, discuss the process for continuing your health care coverage under COBRA with your current company's HR department. Also be sure to cash in on any unused benefits you can't take with you, such as fitness reimbursements and company discounts for goods and services. Be aware, however, that certain benefits (e.g., tuition reimbursement) may have a repayment requirement.
Paid time off
Would you be gaining or losing time off? How long would it take you to accrue the amount of time off you have now?
Are all paid days off lumped together or separated into categories (vacation, sick leave, and so on)?
What are the company's policies related to life events such as the birth of a child, illness, and bereavement?
Before you leave: Take stock of your accrued vacation time, and keep a written record of the amount you should be compensated for upon your departure.
Retirement and investments
Before you leave: Consider how much money you might be leaving on the table if you're not fully vested in your current employer's retirement plan. Depending on the situation, you may want to negotiate for a later start date or some other type of compensation to make up for lost retirement funds. Also, be sure to consider potential tax implications of executive benefits or nonqualified compensation plans.
Does the company offer a bonus program?
Is the bonus fixed or variable? What is it based on?
What were the average payouts over the past couple of years for someone in your position?
Would you be entitled to a bonus in your first year? Can you expect a prorated payout based on your start date?
Making a smart choice
When evaluating a job offer, it's important to keep an open mind, as well as a firm idea of your priorities. If you decide to accept a new job, you want to be sure that you're getting more than you're giving up—both financially and in quality of life.