Finances & Money

Secrets of Switching Jobs: Deconstructing The Job Offer

Job Fair

by Tye

Tye Hill works as a technology consultant in the Washington DC metropolitan area. In his spare time, Tye shares his thoughts on personal finance at his blog:

Switching jobs can be extremely stressful by itself, and anything else on top of that will make it nigh impossible. There are so many things to consider when changing jobs that it can simply be overwhelming. Well, that’s why Plain Old Common Cents is here. I’m going to provide a run-down of what I consider to be 10 of the top things you need to consider when you receive a job offer.

  1. Personal Time Off –One of the first and most obvious benefits that you should compare is your vacation and sick leave time. If your new company will severely cut back your vacation time, then you need to account for two things. The salary or other benefits should be better to make up for the lack of vacation, and you need to be okay with having less vacation days than you did before. You should also look into whether your new company gives comparable benefits when it comes to maternal or paternal leave, but only if you are seriously considering having a baby in the next couple of years. Finally, look at the number of holidays the employer provides and compare that with your current company, is it more or fewer days off? That makes a difference.
  2. Flexibility and Child Care – Now this one only applies if you have children or have something in your life that requires you to leave work early, work from home, come to work late, etc. from time to time. Some companies and jobs are not very flexible when it comes to work hours, and others are incredibly open to unusual hours – you need to do the research and find out if the new company will fit with your lifestyle.
  3. Health Care Benefits – There is no standard policy that all companies provide for their employees and health care benefits can vary wildly in couple different ways. First, you can have more or less coverage than you did in your previous job. You could also have lower quality coverage if they require you to stay “in-network”. Second, the amount that you contribute towards your premiums can also vary wildly. I went from paying no health care premiums at one job, to over $150 per month at another. These costs can seriously add up and can eat away at any pay increase you think you are receiving.
  4. Commute – How close do you live to your new job? Is the commute better or worse than your previous job? Cutting down on your commute time can have huge benefits to your happiness, quality of life, and your pocketbook. If you are spending less time in traffic I can guarantee that your mental wellbeing will improve, and if you are traveling less you should be spending less on gas, metro fees, or bus fares.
  5. Bonus – Are you getting a bigger or smaller bonus with the new job? Either one can work. It’s better to have a larger salary with a reduced bonus than it is to have a big bonus and a smaller salary. Bonuses are taxed differently than normal income and they are usually taxed at a higher rate. Bonuses are also not guaranteed. Just because employees received a 20% bonus last year doesn’t mean they will get anything this year. It is also helpful to have a higher base salary for future job negotiations. Companies usually start negotiations by looking at your previous salary, so if you have a higher base salary this can be helpful during future job offer negotiations.
  6. 401k – Look at the how much your new employeer matches 401k contributions compared with your last. This is basically free money, and while you cannot spend it until you retire, I never say no to free money. I recommend that you always contribute enough to receive the full company match, unless you are very deeply in debt.
  7. Stock Purchase Plan – Yet another way to get free money. Many company stock purchase plans include either a discount on the stock price or a company match. Even if you don’t like to hold single stocks I recommend doing this if you have the means. You can always sell your stock as soon as you are eligable to do so and walk away with the 15% discount/company match. Again, I try not to say no to free money. So don’t forget to take the stock purchase plan into consideration when evaluating your job offers.
  8. Quality of Life – One of the harder to quantify categories is quality of life. This can be anything from company technology policy (web surfing, email, laptops, Mac vs PC) to dress code (business, business casual, casual). It can also include your commute or lackthereof if you can work remotely.
  9. Cost of Living – Cost of living can make a huge difference in your effective salary. If you are making $80,000 per year in Nebraska, that carries a lot more weight than making $80,000 per year in New York City. There are all kinds of calculators out there for cost of living, and here is an example. I assume that if you are looking at a cost of living calculator then you are thinking about moving to a new city for the job. In that case, don’t forget to consider how moving will affect your quality of life.
  10. Salary – Last but not least, you can compare salaries. Don’t forget to account for the other nine points when considering your salary, as it can have dramatic effects on your “true salary”.

About the author

Clever Dude


  • These are definitely good points to cover. I think another important point is to look at what your future path would be at the job. If you’re specializing, how long will your specialty be necessary; if you’re a generalist, how are you going to compete with everyone else? If you’re looking for a promotion, how much does seniority factor into promotions?

  • Bonuses are NOT taxed differently from your regular income! They’re taxed as PART OF your annual income. I see this mistake all the time. The reason some people think they’re taxed differently is that some piece of the bonus might be taxed at a higher rate, if you’re on the edge of a tax bracket.

    For instance, the edge of the 25% tax bracket is at $82,250 for the year. If you earn $80,000 base salary and a $5,000 bonus in 2009, then using the tax tables here ( you owe $4,675 in taxes plus 25% of your income between $33,950 and $80,000, or $11,512.50. The first part of your bonus (that takes you up to $82,250 for the year) will be taxed at 25%, and the rest will be taxed at 28%. However, you will owe EXACTLY THE SAME AMOUNT of taxes as if you had just earned $85,000 in salary for the year.

  • A nice list of things to consider before taking a new job. I’ll have to look at all these considerations when I next get a job offer. I’ll have to check out Tye’s blog, as well, it seems like it could be interesting.

  • Great points to consider! I also think something else to take into consideration is the room for advancement. No one wants to stay in the same job or position forever, so there should be plenty of room for you to move around. The credit union I work for actually has little room for advancement. Since I view this as a job and not a career, I don’t really care at this point. However, when I do move into my career, you can bet that’s one thing I’m looking for!

  • One friend of mine always ask for generous moving stipend, that ships his furnitures, cars and all his belongings. He also usually gets his first month of renting covered. These expenses come up pretty high for a family, so another point to consider.

  • I like the point you’re making by putting salary at number 10, but let’s be serious: that’s the thing people look at before any of the other stuff.

    I would say that, unless you’re making tons of money (say, over 100k) then you can start to prioritize differently. But if I’m going to a new job and the salary is the same, the bonus better be radically higher and the other perks better blow away the old job.

  • I think ‘stability/company reputation’ needs to be represented on the list. I was offered a huge opportunity (in terms of career potential, actual $$, and they were willing to match my vacation time) from which I ultimately walked away because their newsworthiness was ‘unpleasant’ and might limit my future resume: i.e., who wants to hire an accountant from Enron or a fund manager from Merrill Lynch?

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