When you are faced with a new job offer (other than being extremely blessed) you may be in for a rough ride. How do you make such an important decision? How are you to compare job offers? If you are like me you may try to analyze and quantify every detail of each position in order to make a decision. It can be difficult and there are a lot of things to think about. This article will hopefully assist you with such a decision.
I have just gone through this process myself so it is clear in my mind.
Obviously there will be things you can’t quantify. If you have a really great relationship with your coworkers. (or a really bad one) If you are working for a non-profit that is really important to you. These are things that you can’t convert into a formula to make a decision so for the sake of this article I am going to ignore them. You will have to determine how important these things are for yourself.
This is the easiest to compare and the largest portion of your compensation. This is easily examined simply by looking at what they are going to pay you if you are salary or by doing some simple math if you are hourly. Hourly rate multiplied by 2080 gives you a yearly rate assuming no overtime.
Having just lived through this I learned that my old employer had really great insurance rates and where ever I went I was looking at doubling my insurance costs. Always ask for this information before accepting a new job you may learn that you have actually taken a pay cut because an increased cost of insurance has eaten up your raise.
Starting over in a new job often means that you are losing paid time off or vacation. I compared this by multiplying it by my daily salary rate to determine how much the vacation was worth in dollars.
The book “Your Money or Your Life” is great for helping you see all the costs associated with your job, including commute and clothes. The IRS millage rate for 2014 is $.56 so take your commute and multiply by this number to make sure you won’t be losing money in the cost of driving.
Additionally, I tried to quantify the hours I was going to spend in my commute. One of the offers I was looking at put me far away from home and into heavy traffic so my actual commute would have been longer than the millage lead me to believe.
The match, if any for your 401(k) can be a large difference between two jobs. If your current jobs matches 50% of the first 4% of your salary and your new job doesn’t offer a match then you are giving up all that tax free money.
There may be other offerings from your employers, some of them get very creative to attract top talent. What else do you think you should examine?
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