In today's episode Nicholas Olesen, CFP®, CPWA® shares what considerations and questions you need to ask when offered a new job.
With so many of our clients receiving great new job offers in this tight job market, we have having a lot of great conversations and doing a lot of analysis to help our clients gain clarity and confidence about what to do. We thought it would be helpful to walk through how we answer the question, "Should I take the new job?"
This one question typically leads us to ask about:
- Comparing total compensation, not just salary
- Making up any equity grants or LTIs you are walking away from
- Analyzing benefits, including retirement plans and matches
- Understanding the work culture and if it fits with your personality
You can find a transcript of today’s show below.
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Transcript from today’s show:
Hi, thanks for tuning into A Wealth of Advice. My name is Nicholas Olesen, Director of Private Wealth at Kathmere Capital. We recently had a number of clients that came to us because they were getting a job offer or they were having a company come and say, Hey, we really want you to work here. Can you tell us what you need to come over? And in today's job market with, so many open jobs especially some of the top jobs out there, it's been a really competitive market.
And so I thought it was just a good time to talk through what to do when you're getting these, or kind of some factors to consider when comparing where you are right now, compared to a new offer, a new place. And so I'm going to run through just a bunch of things that I think of when I talk to clients about this and things that they have found helpful to work through and talk through. Some are going to be on the financial side, some are just going to be general. And hopefully you find this of value, hopefully when you do receive that next great job offer you can use this as a guide.
So starting point, I always ask that you get some type of written offer before going back and forth about everything because you just want to put all the cards on the table from.
And then can start putting your own plan together for it. And in that, one of the biggest things, obviously on the financial side is salary. What is your compensation now? The salary is not everything though. We I'm going to give examples throughout this. And one is we had an individual who I was able to negotiate and had gotten an increase in their pay on their salary at a large fortune 500 company and had a great compensation package with stock grants and bonus potential and things like that.
And was receiving another job offer from an outside, it was a smaller firm. It was a [00:02:00] PE backed biotech firm. And so they didn't have kind of the numbers of what the salary was going to be. As far as, it wasn't as much value as the other one, but there was some huge upside if things went well, both in cash and in equity.
And they were struggling. This client was really struggling with, okay, which one do I do? And it really came down to their personality, worked for them to take the risk. They're at a point in their career where they had proven themselves in the industry and did not need to show their their loyalty, if you will, to continue to grow at the large company and instead wanted to go take this bet. And so we looked at it and said, Hey, salary, you can live off that other salary. And everything else is really just going to be a great rocket fuel, if you will, if things go the way that, that you hope and think that they will. But you're taking a gamble, you're taking a chance.
And for them, it worked. For them it was the right situation. They were really excited about it. It has worked out very well for them, but I say that not because it worked out, I say that because comparing salaries, you need to look at the entire picture. You need to look at all the things that you have and the things that you potentially can have.
And that also goes hand in hand with what you're walking away from. One of the things that we do often for clients who are receiving these types of offers and in negotiations with the company, is we go through and we put some values behind what they're walking away from.
Whether that would be, and I'm going to pick on some companies here, cause I, I know all these numbers off the top of my head from some recent examples. We have a client who was exploring, not to being a Johnson and Johnson. And they were going to be walking away from a six-figure equity comp package that's vesting over the next couple of years here. And they were walking away from a pension. And if you hear all those things you say, okay, but that's a lot. Like you're walking away from pension. You're walking away from retiree health benefits. You're walking away from an equity package. [00:04:00] Really? And it came down to just showing, Hey, this is how you make it up. Here's how that gets made up. If they can do this, hen you're good. I know that is a lot. I know that you're walking away from a lot, but there are ways through stock options, through grants where we make all that up.
And so we do a lot of analysis and comparison for clients on that one. We recently did one as well for an individual leaving BMS and just wanting to look and just say, Hey, am I silly for walking away from this?. You know, What is, can you go through our plan and go through our book and make sure that I'm not missing anything? If I leave on this date versus two weeks later, is there a difference? And we actually found there was. That, that, that is one that I will say when you are comparing and choosing dates it matters which date you are leaving because of some vesting of certain equity comp and things like that.
So do be mindful of that.
The other thing to compare, that's a little obvious, but just to touch on, which is all the benefits, the PTO, the health insurance, the sick leave and retirement, I mentioned it on that last example or the one before where we had a client leaving Johnson and Johnson, which has a pension as of today. And we looked and just said, Hey, here's the percentage of your income every year that you need to be putting away because you no longer are going to have, vesting in that pension. You're going to be vested in what you've earned so far, but it's not going to continue to accrue over time.
Not all employers even offer retirement plans, especially some of the smaller startups that we have some clients go into. And it's funny cause we're having clients later in life go to do the startups goand kind of take the venture on after kids had gotten out of the house or they put away enough and they say, Hey, this is just, I'm really excited about this. And that's okay. There's other options. There's ways of getting other dollars funded into retirement plans or creating plans, even in these small ones that we do all the time.
So look at that to me that's really key.
The ones that, that, that is the non-financial one to start touching on, which is work culture. And look, culture gets a lot of terms. People talk about it all the time. But it's really important when you're walking into these new [00:06:00] companies, understanding that it's not always greener on the other side.
We had a client who left a role they'd been out for well over a decade and had made an amazing name for themselves and were really sought after for their advice at their current company. But they just wanted something new. They, They were a little sick of things. They had actually gotten passed over for something else for some political reasons in the company.
And so they just said, I just, I need something new and they left. And it seemed like everything was going to fit it on all, you know, kind of the surface level of things looked like it was going to fit. But what didn't was the culture of the team and the collaboration. It just, it didn't jive. It didn't work. Values didn't align. Culture didn't fit. And very quickly, literally months after leaving somewhere where felt respected and was sought after for advice, was at a place that felt hey, I'm just another cog in the wheel. So that's a really nonfinancial one. That's really hard to gauge. A lot of it comes from if it's in the industry, that you're already a part of trying to find colleagues who have gone there before or came from there, and having confidential conversations with them about what it's like, what does that been?
One side too that's that's a little bit on the nonfinancial side is just the company reputation and turnover. Is it really innovative? Is it somewhere where their recent hires have been some of the best people out there? Can they carry their weight in the industry that they're trying to go after or the segment of the industry they're trying to go after.
To me, it's key it. When you look at it, joining a firm that you feel confident in where they're heading and you feel pride in walking in the doors of it. It matters a lot. And I see it in clients who just the kind of on coast mode, because they just don't feel that the firm that they're working for is going to be growing at the rate and developing innovative technologies and hiring the best people. And so they just kind of go into coast [00:08:00] mode. And so I, that, that's just one that on a personal side, I would be cautious and understanding of what it is.
The other one that's funny is your commute and your typical day. You know, I know we're, again, this is November of 2021. We're recording this. A lot of places are still, hybrid or remote or what have you and so evaluating, how long is it gonna take, what's it gonna look like? How often do I need to go there? Um, it might not be on the top list, but depending on the role, you might be surprised how quickly you have to get back to the commuting life. And do you enjoy it? Do you care about it? I personally drive, a half hour on a really good day, an hour on a, not so great day, but going into working from home for a period of time, I actually missed it, as, as funny as that sounds.
And what I missed was the being able to decompress and the time that it took to shift from business to family. I didn't have that when I walked up the stairs from the office to be with the kids and my wife. And so the commute, although it's a decent chunk of a day, I found it incredibly good for me. Uh, It allowed me to listen to books and podcasts. So it allowed me to shift into work mode or out of work mode, quote unquote. And so I did not come as much into our family with a lot of, how I had felt through the day. I was able to get a lot of that out in the commute. That's not for everybody.
I know a lot of people who love the fact that they work from home can just pop from one thing to the next. But for me, it wasn't as big of an issue. And for a lot of clients that I've talked to, that's not been a concern.
And the other one is, is typical day. Mental exercises are very good and trying to envision what it would be like on a day-to-day basis. Spend the time to truly think through, whether you write it out and go line by line, of what your day could look like or what activities you will or will not be doing throughout each day. Especially for roles that are very [00:10:00] similar. We have an individual that has moved from one Fortune 500 company to another Fortune 500 company doing pretty much the same thing. Really enjoying the new company and what it was is just the slight difference in responsibilities and what it was allowed them to use a part of their brain that they really enjoy and more creative and more analytical. And so that kind of combination of those two brought back to life an enjoyment of the career. And so you really need to go through what the typical day will be like, where your interest and skillsets are. And then make a guess on that if you will.
And then the last one is, I hate to say it, but it's follow your gut, follow your intuition, something like that. Because a lot of times, especially when it comes to walking into a new role or staying at your current role, you do have a sense of what you personally are going to enjoy. The numbers will make a difference, don't get me wrong. That's why we get brought into a lot of these questions on, should I take the new job? Should I move to this employer? Because the financials matter tremendously. But if you are not going to enjoy it, if you're not going to love the day today, it's very difficult to continue pressing on day after day.
I absolutely, I don't say this just to say, I love what I do. I could never envision not doing this. But others that I talk to, they truly are just getting through the days.
I have one client who told me that they have a months left of work checkoff. They know how many more months until they can retire. And I love that they're that excited about the next chapter, but there's a small part of me that just is oh, I wish that something in your day-to-day right now was so fulfilling that you aren't itching for that retirement.
So I say that because your intuition, your gut, your feeling, you know you [00:12:00] best. And, or frankly your spouse might know you best. Talk through these things, follow that, intuition, that feeling that you have of excitement or dread to where you should go.
I hope this was helpful and kind of navigating both the financial side of things to look at. And then also just a personal side of things to look at.
Happy to always talk through these things. If your client listening in and you're going through this as, you know, reach out, we love to talk through these offers, these options, what this can look like. How to design an offer package that you can walk into the door feeling really excited about because of what you're walking away from. That's a lot of fun for us.
And if you're not a client and you're just listening to this and you have those same questions, please, again, reach out. We love doing this. We love serving those that have these types of questions.
So, I hope this was helpful.
I really appreciate your time. I know it is incredibly valuable, so I thank you for that. And I hope you have a great rest of your day. Take care.