The Daily Recruiter

Mark was satisfied with his senior management job, but when an opportunity came to interview with another company, he couldn’t pass up the possibility of a salary bump.

He researched the company and liked what he saw. Even though the company had struggled, it had a sound business plan and a new team of heavy hitters to turn things around. His interview with the CFO went well. He returned for a second interview. The company wanted Mark, and Mark wanted to make the move. The offer represented a 10 percent raise. Or so it seemed. The base salary was 10 percent higher.

The offer came on Friday, giving Mark the weekend to think it over. He told the recruiter he needed to run some numbers and talk to his wife, but he was pretty sure he would accept.

On Saturday, he set up a spreadsheet that looked his current compensation as well as the offer: base salary, bonus, healthcare, 401K, options, restricted stock, commuting and parking.

The tally left Mark disappointed. 

The new company was smaller and did not have a great healthcare plan. Deductibles were twice as high as were co-pays. The new company was privately held with no plans to go public, making options worth very little and meaning there was no restricted stock. The 401K only matched 3 percent, whereas his current match was 6 percent. The cost of commuting and parking was about the same.

Finally, the bonus. Yes, the offer was for a bonus based on 20 percent of his base salary, the same as his current job. But, for the past three years, bonuses at the new company paid out at just 60 percent, versus 98 percent as his current company.

Financially, the move would be lateral at best. Mark called the recruiter on Monday with the bad news. He said he would need an additional 8 percent in base salary to accept the position. He explained exactly how he arrived at his figures.

The company declined. A few months later, the recruiter called Mark to let him know the company still liked him best of all their candidates. They were willing to negotiate. By then Mark had been promoted, so his salary requirement was even higher. The deal didn’t work out, but the lesson Mark learned was huge: RUN THE NUMBERS!

It’s easy to forget that your home is a small business…yours! Tally up your total compensation before you start your job search, so you’ll know going in what kind of salary you need to make the leap. Be especially careful when calculating the cost of commuting, as an extra ten miles can add up with gas so expensive. If you decline an offer, be up front with your recruiter and potential new employer, thus leaving the door open for the future.