Evaluating a compensation package for a new job can be a daunting process. These days, your compensation can include countless elements to consider — your salary, benefits package, stock options, PTO, even soft benefits like environment and training — and not every compensation package will include the same elements. So how does one go about choosing the package that’s right for them? We’ve outlined a few things to consider when negotiating your next job.
What is your drop-dead salary?
Every compensation package will be different, but a good starting point is to determine what your required salary is. What monetary compensation do you need to survive and ideally, live the life you want? While additional benefits and stocks will offer bonuses as part of your package, they won’t buy your groceries or pay for education. Figuring out what you need as a baseline can help determine what you might be looking for in other benefits and what you’re willing to compromise on.
What do you need from your benefits package?
Did you know that benefits traditionally account for 37.7%* of an employee’s total compensation? So just like you might for salary, it’s important to think about what you and your family need in your benefits package. Will you be sourcing your health insurance from this role? What about retirement savings? Outline the must-haves and nice-to-haves when it comes to benefits and make sure any compensation package you’re considering meets those needs.
Do you have specific needs to consider?
Salary and benefits make up the majority of your compensation package but it’s also important to consider your individual needs and how they’ll be met by a new employer. Are you planning to have a child and want a strong maternity/paternity policy? Do you need flexibility of schedule to care for family members? Are you planning a long vacation or, conversely, aren’t interested in PTO policies? These are all personal decisions that can be impacted by your job’s compensation package. Knowing up front what matters most to you and what you need will go a long way toward evaluating different options.
Are you open to stock options?
These days, more and more companies are offering stock incentives as part of compensation. It’s important to consider up front if this is something you’re open to or interested in. Are you willing to trade salary now for the possibility of a financial win down the road? How does the vesting schedule impact your overall career plans? These are important questions to ask yourself (and your family) as you review job offers.
It’s also important to make sure you understand what types of stock benefits you’re being offered and how they can be redeemed. If you have questions or concerns, make sure to bring them up with the hiring manager.
Have you considered the soft benefits?
Lastly, make sure you take a moment to consider the soft benefits of any job. These may not even be outlined in your compensation package but every workplace offers benefits and tradeoffs in their working environment and style. Does this opportunity align with your desired work style — or are the tradeoffs in salary and compensation worth it? Will this opportunity offer personal development options or will you remain stagnant? While these benefits may change with time, it’s important to consider them in your decision making process. Each of us has different thresholds for environmental factors and it’s key to be honest with yourself about what you need to succeed.
Receiving a job offer can be a relief after a period of job hunting, but not every package will work for you and your family. Take the time to consider every aspect of your compensation package and see how it aligns with your needs. Your compensation package will inevitably impact your financial planning and long term goals, so spending the time up front to make sure it’s constructed in a way will save you extra headaches in the long run.