Evaluating Your Total Compensation
By Paula Santonocito
Q. Following months of looking for a new job and going on interviews, I’ve received an offer. The problem is the pay isn’t much more than what I’m making now. There are some better benefits, such as fully paid health care, but I’m still not sure it’s really worth making a change. How can I decide?
A. Understanding total compensation can be tricky, but some new software programs can help. A company called TotalRewards Software Inc. has developed a tool companies can use to provide an analysis of total compensation to employees and prospective employees. TotalRewards markets the product for current employees as TotalCompBuilder.com; the version for job seekers is known as CandidateStatements.com.
You can use the software’s categories and subcategories to do your own side-by-side comparison. The section breakdowns are as follows:
- Cash compensation (actual pay and any expected bonuses or profit-sharing);
- Benefits (medical, dental, disability); and
- Other valuable benefits (paid time off, holidays, tuition reimbursement and stock options).
When running your analysis, start by creating two columns: one for your current job and the other for your prospective one. Be sure to look at dollar amounts on an annualized basis. For example, if you are currently contributing $200 a month toward health insurance and would no longer be need to do so in your new job, you’ll want to view it from the standpoint of $2,400 per year. When you add $2,400 to a projected increase in base salary, your new bottom-line number looks even more appealing.
Doing an apples-to-apples comparison provides an accurate overview of what you have with your current employer versus what you could have if you were to make a change. Keep in mind, however, that this method only addresses broad financial categories. It doesn’t take into account other important considerations, like your commute. Is the new job closer to home or farther away? Don’t forget that increased travel impacts your finances and your quality of life on a daily basis.
This raises another important question: How critical is the additional income? Is that the main reason why you’re seeking a new job? Obviously, money is an essential part of work, but you should other components when conducting your comparison. Here are some questions to consider:
- Is the new job more interesting?
- Does the new company seem like a better fit for you?
- Are career advancement possibilities better at the new company or at your current one?
Take the time to do a comprehensive comparison before you make a decision. In addition, ask yourself if your reluctance to accept the new job offer is based entirely on money. If the company had offered you a higher starting salary, for example, would you still be hesitating? If the answer is yes, this may not be the right job for you. Considering the total package will help you make a good long-term decision for your career and your life.