Considering a Job Change? Keep These 3 Things in Mind
You’ve been thinking about making a job change. You’ve polished your resume, made some tweaks to the LinkedIn profile, and ramped up your networking. After nailing a few interviews, you now have an offer in hand. Great. So do you leap? As always, compensation is the key consideration. But that’s not as straightforward as it was early in your career.
Your compensation package isn’t just about the basic salary and an annual bonus. It’s a blend of diverse elements, ranging from performance-driven bonuses to vested restricted stock awards, stock options, and enticing perks like an Employee Stock Purchase Plan, Deferred Compensation Plan, and a 401(k) with company match. Not to mention the added benefits of a car allowance, parking reimbursement, and hybrid work options. With such a comprehensive package, every aspect demands careful consideration before taking the leap to a new opportunity.
Here are the three things you need to keep top of mind when weighing up a new position.
1. Moving to a new state
Call it the beauty of the USA. Fifty states offer 50 different ways to do things–including costs of living and state income taxes. Will the concessions for moving expenses cover the commissions and excise taxes you would pay to sell your home?
2. The new stock offer
Comparing your new stock offer with your current arrangement isn’t straightforward. It’s apples to oranges. What happens if your new company’s stock skyrockets while your current company maintains an average growth rate? (Putting your ex-collegaues good-natured schadenfreude to one side for a moment.) Additionally, ponder the distinctions between stock options and restricted stock in this scenario. Will the new employer offer a signing bonus to compensate for leaving behind accrued equity vests? Delve into the current year’s disparity and project how things might evolve in the next 3-4 years. This holistic assessment will provide a clearer picture of the long-term implications of your decision
3. Household income
If you take a moderate blow to household income in the near term, what does that do to your ability to retire at a reasonable age and get your kids through school?
In addition to analyzing the variables in an objective side-by-side manner and projecting them out over time (or having a Personal CFO to do it for you), think about the bigger-picture impacts of a job change:
Scrutinize the team and leadership within the new organization. Do you have confidence in your prospective colleagues and the board members? Assess their experience and whether it aligns with the company’s growth trajectory.
Do the same due diligence on the culture and morale. The work environment’s cultural dynamics are essential, and you should reflect on how valuable a positive work culture is to you. Determine if the company fosters a morale-boosting atmosphere that aligns with your expectations.
Another crucial element is target compensation–both now and for future roles you may take in that organization. Understanding what each company intends to offer is vital; This eliminates ambiguity but also sheds light on their commitment to your future success.
Additionally, contemplating matters like separation terms, future equity grants, insurance coverage, the company’s stage, and its balance sheet strength should all be part of your comprehensive decision-making process as you embark on a career transition.
Looking for advice specific to your situation? Reach out to one of our advisors today.
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