If you are looking for your first job or ready to write the next chapter in your career book one of the most important factors for most people is salary. The current job you have may not be enough for you to make ends meet, or maybe you just want more. Whatever the case may be its important that when you consider the offers from prospective employers to factor in more then just the annual salary. This might not seem as simple as it sounds, but it also doesn’t have to be that confusing either. I recently was considering a few offers of employment so I will be somewhat using my example as a discussion point, however, the data is skewed.
Depending on where you live in relation to where you work and again in relation to where you might work next can really change your income. In my case I live just outside the city. Far enough where trains aren’t a realistic option, but close enough where working in the city and living outside is “normal” to most. This means that a typical Monday through Friday commute means leaving extra early to factor in traffic and wait times at tolls, plus sitting in the same traffic at rush hour going home, increasing gas and idle time in traffic, wear and tear on the vehicle and parking in the city (paid-of course). Although you can calculate the cost of gas somewhat easily to apply it to your situation and the cost of parking is predetermined based on the rate at the garage you want to park in, your time is the tough one. What do you value your time at? If you have kids do you value your time more? If you don’t value your personal time, you better start because your time is valuable. If you spend 1-1.5 hours in each direction commuting you might be leaving the house at 6 am and not getting home until 7 pm You would be spending 3 hrs a day X 5 days a week equaling 15 hrs of wasted time in traffic. Imagine a monetary value to these hours and that is the cost of your wasted time, 60 hours a month, more then a full weeks pay.
Today healthcare is critical. The job you have now might offer fantastic benefits, 90%+ paid by the company, low co-pays, great doctor relationships, etc. If your offering employer has a much lower grade health plan this could end up costing you. Are you planning on starting a family soon or having another child? Medical bills and doctor visits could add up? Maybe dental or vision isn’t covered and you have oral or vision issues that require consistent doctor check-ins. These are critical factors where a higher overall salary might appear nice, but when factoring in these kinds of expenditures, the salary may not be as high as it appears.
Reimbursements, Benefit and Discount Programs
This is a category that is often very overlooked, but one I took advantage of at my prior employer. I worked 2 years at my prior employer (healthcare software company) and got $8,000 in education reimbursement towards my masters program. This was HUGE! There are requirements, such as qualifying courses and a minimum B average, but that was below my personal expectation so that wasn’t a problem. I considered this $8,000 in additional income, since its $8,000 in debt I didn’t have to take on. My current employer however, does not offer an education reimbursement, thus the remaining courses I have had to take loans out to pay for (in my last class now!!!!!!!). Many companies offer other major discounts and reimbursements as well on cell phone bills, vacations, online purchases, etc. These can really add up to thousands of dollars over time so factor these benefits in. I recently received $150 for 2012 gym membership from my health insurance and will get the same for 2013.
Companies offer varying benefits, that is unavoidable and the industry may dictate what to expect. If its a start up tech company, its not uncommon to have game rooms, catered lunches, beer Friday’s and more fun, compared to a different company with no budget for such things. At the same time, there are some common benefits that go without saying, but should still be considered. Time off is a big one. Many companies are shifting towards a single Paid Time Off (PTO) or Earning Time (ET) system replacing an old Sick Day versus Vacation Day system. Employees accrue time into one big bucket and take time out of that bucket for whatever they need. Typically there is some carryover that must be used by the end of the first month or two of the following year or it expires. Holidays are also important, some companies will offer more holidays paid off then others or require a rotating coverage schedule. 401(k) matches also very. My current employer is a start up and does not match any 401(k) contributions, but my prior employer did.