Question: I haven’t looked for a job for a long time. Consequently, I have no idea how my current compensation package compares to equivalent positions in the job market. How do I determine whether an offer is fair or not?
Answer: When most job seekers hear the word compensation, they think money. But there’s a lot more to your compensation package than a monthly check. Benefits and perks typically comprise about 25–33% of your total package. And, the higher you go in an organization, the bigger role these components play. A VP’s salary can be a fraction of the value of his stock options.
Fortunately, many benefits and perks such as medical insurance and training are not taxed. Consequently, an offer with great benefits and a mediocre income may actually be more lucrative than one with a top-of-the-line income and poor perks.
Before you start interviewing, it’s smart to choose the most important elements for your desired compensation package and rank them in order of importance. Also, do some research to find out what the market is typically paying for someone with your background and level of expertise to be sure your expectations are in the ballpark. Then when you get an offer, you can easily compare its income, benefits and perks to 100% of what you want and the career/industry average. Below is a table to help you do just that.
- Job Comparison Table
|Exempt Position||Ideal Job||Job Offer||Difference Favorable/(Unfavorable)||Career/Industry Average|
|Company 401(k) Match||6%||2%||0||3%|
|Weeks of Vacation||3||2||(1)||2|
|Flexible Work Schedule||Good||Good||Equal||Fair|
|Casual Dress Code||5 Days||Friday||(Worse)||Friday|
|Telecommuting Ability||Good||Not Available||(Worse)||Not Available|
Column 1 is a popular list of recruiting incentives that probably include your top priorities. If other issues are more important to you, substitute them for those I’ve selected. In our example, columns 2 and 3 gives specific amounts for the quantifiable items in both ideal and job-offered compensation as well as qualitative scores: excellent, good, fair or poor for benefits and perks. Column 5 lists industry/career averages.
This example has both positive and negative variances. If your spreadsheet looks similar to this one, you may decide the differences between your ideal job and your offer aren’t worth negotiating or your pluses and minuses balance each other. In this illustration, both the current position and the offer are better than the career/industry average. If any of the above are true for you, take the offer.
On the other hand, if you decide to counteroffer for 100% of what you want, go for it. You are the number one candidate. Your potential employer wants to get to “yes”. If you take the initiative you may receive your ideal package or closer to it.