A client reached out this week with the exciting news that she had been offered a new career opportunity. She asked for a call to discuss the opportunity and sent me the offer specifics to review. Since this is a situation others may find themselves in amidst this active job market, I thought it was worth discussing the observations and comments I passed along to her

When talking thru the new opportunity, I filtered my comments/considerations by both a quantitative and qualitative lens.

On the quantitative side of things:

1.) Net take home pay- it’s easy to compare job opportunities using the gross salary (after all, that is what is usually included in offer letters!) However, in my view, it’s just as important to compare net take home pay to ensure it will be sufficient given current spending and savings levels. Net take home pay captures not only income (the gross salary, bonus payments, other employer-provided funds (such as profit sharing)) but also nets out expenses/outflows from paychecks including employee benefit costs, payroll taxes, changes to employee retirement savings deferral between companies (such as moving to Roth 401k from pre-tax 401k), and federal/state income tax withholding.

2.) Benefit coverage – another item to consider is changes to benefits/coverage, most notably health insurance given its materiality. There is considerable variability amongst health plans offered by various businesses so it’s important to not only look at costs (see above) but also the details on the new plans (in network providers, coverage start date, structure (ie: if you have a high deductible plan with an HSA now, does new plan allow for one?). Certain other material coverages (like disability insurance) may be worthwhile comparing as well.

3.) Retirement savings – Employer-sponsored retirement plans (ie: 401k and 403b) are a key part of the American retirement system and as a result, are a key feature for employees to look for in any job opportunity. It’s important to review your new employer’s plan structure versus your current one and ensure it meets your needs. While certain items are dictated by the IRS (ie: employee max contributions, catch-up contributions, etc), other items will vary by plan/company (such as employer matching approach, fund options, and availability of Roth 401k option). While you may be willing to sacrifice some elements of your retirement plan for other positive factors, be sure you are at least aware of the trade-offs.

4.) Other numerical benefits – there are other numbers worth comparing and being aware of – such as number of holidays and paid time off days.

The “math” is only one part of the equation. It’s also worth evaluating the qualitative side of things. Here are some of the questions to ask yourself:

1.) Motivation to make a change- consider asking yourself why you are seeking a new role. If things were even from a “math” perspective (or even a bit worst for the new role), would you still want to take the new opportunity? Starting from “why” is always insightful.

2.) Career path – what’s the next step after this opportunity (either within this new company or at another)? Has the new company outlined your path for further advancement and does it align with your wishes? How does this new opportunity compare with your current one in terms of room for growth, development, and advancement?

3.) Culture/Environment – we spend a lot of time at work! It’s helpful to understand the company’s culture and how working there will fit into your broader life (do they have work from home options and/or flexible working hours? Are you able to talk with any of your future peers/supervisors regarding the company before accepting the offer?)

4.) Outlook for business/industry – before you join a business, what do you know about them and the industry they participate in. How are they doing financially? Do they have a path for future growth? Is it an industry on an upswing or downswing? While you can certainly look for another job is something company-specific were to occur, it’s nice to have this understanding from Day 1.

Job transitions can be exciting – but don’t lose sight of the big picture. Ask the necessary questions. Gather the needed information. Assess both the qualitative and quantitative factors. And make the decision that is best for you!