In the market for a new career opportunity? These days, people in the workforce don’t seem to stick with one employer as long as they used to. If you’re beginning to entertain the idea of a job switch, there is more to compare than salary to salary. It’s important to take all factors into consideration before you decide that your next step is the right one for you and your family.
Here are some tips on what to think about before making a career move.
Interviewing and landing a new job are exciting prospects, but you must also evaluate every job option with your finances and your long-term career in mind. Begin by considering your reasons for seeking a new position. List the considerations that are most important to you — things like salary, new responsibilities, learning opportunities — and rank them in order of priority. Knowing what you want will help you narrow your search.
“In some cases, employees may come from different cities or states and could potentially be commuting to a higher tax bracket,” advises Chris Cicalese, CPA, MSTFP. “Prospective employees should consider taxes, commuting costs, and additional travel time before making their decision about a new position.”
Most people will want their new salary to match or exceed their previous pay, but there are other financial issues to consider. For example, are you aware of the value of the benefits packages associated with each job —including health insurance, retirement plans, paid leave such as vacation and sick time, and disability and other types of insurance? Put together, these benefits represent about 30% of an employee’s entire compensation, according to the U.S. Department of Labor. If you are changing jobs, make sure to compare your existing benefits package with those in any potential new position. And although a potential employer may offer a retirement or healthcare insurance plan or other benefits, check carefully to see whether they are comparable to those of your current company or if there are differences that will have an impact on your wallet. If you will lose any benefits, it’s worthwhile to calculate how much you would need to spend to replace them on your own.
Take health insurance, for example. According to Associate Partner Mike Engleman, CPA, “If you are covered by your employer’s health insurance plan and you change jobs, you are usually eligible to keep your health insurance for up to 18 months under COBRA. However, you would have to pay the premium.”
Keep in mind, too, that some jobs offer compensation beyond the base salary, including bonuses and overtime, so you should compare what’s available in a new job to what you have now. Some employers also offer great perks and other advantages. If you’re working for a company that reimburses you for education costs or provides valuable training opportunities, or if they provide onsite childcare or free lunches or snacks, then you should determine what a new job will offer and if losing any of these perks is worth making a change.
Do you enjoy flexible hours or other family-friendly accommodations at your current job? While these programs are popular, they may vary a great deal from organization to organization and job to job. If you depend on a flexible schedule, or if you’re used to a certain level of work/life balance, find out not only the organization’s policy but also your potential supervisor’s attitude toward it.
If you want to advance in your career, it’s important that the organization and your position offer opportunities for professional development. In your interview, ask what kind of career path you can expect and how long it typically takes to move up. Find out what your predecessors in the job are doing now and what kind of training is available to those who want to progress.
Every day, local CPAs offer clients expert advice on a wide variety of financial concerns, including making a major purchase or obtaining a loan. Whatever your financial questions, your Alloy Silverstein CPA can help you find the answers.
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