It’s worth checking all the numbers...
Changing jobs and careers is quite common today. Indeed it is estimated that younger workers today in the States could have as much as 15 to 20 jobs during their career.*
Whether you are thinking about moving roles within your chosen career path, looking at something completely new or staying at home with the kids, then it is worth looking at all the numbers when making the big decision.
The most obvious number to look at is your income. Call it a wage or a salary it is often the headline number when making the decision. It’s easy to get blinded by the headline number, but remember your tax situation. Work out your net pay after taxes. Are you changing tax bands?
So what are the potentially unseen pros and cons?
When looking at a contract it’s important to look the detail. What other benefits are in the contract? What are you gaining and what are you losing? Some are obvious such as the amount of annual leave or is there a parking space, but there are others to consider. Are there protection benefits in your contract if you can’t work, if you are sick or suffer certain illness. What would happen if you have a prolonged stay in hospital?
Sick Pay
Will your employer pay you if you are unable to work in the short term or, more importantly, the long term? A few days off, without pay, to recover from a bad cold might not be the end of the world but 6 months off to recover from something more serious might put you or your family under financial pressure. Make sure you know where you stand so that you can take the necessary precautions.
Health insurance
Will you have access to facilities and treatment to help get you back to work quickly. It is usually in the best interest of the employer to have you back. Depending on your situation health insurance can be costly so knowing what you have is important.
Life insurance
Some employers will offer some life insurance. This could take the form of a lump sum payment designed to cover funeral or other expenses. If you need to replace existing cover, then the cost of that replacement should be included in your decision making.
Pensions
The final one to consider, and it’s a big one, is your retirement plan. Pensions are changing constantly and it’s important to know what you are signing up for and leaving behind. Many schemes have changed in the last decade and it’s important to know what type of scheme you are signing up for. Most pension schemes are now Defined Contribution (DC) schemes which mean that your regular savings are defined but your income in retirement is not yet known. You should also consider how long more you will be working for and when you will qualify for the state pension.
Of course there is much more to taking on a new job than just these. Future career prospects, shorter commute, or even greater job satisfaction all play a big part. However, make sure you know all the smaller details before signing the dotted line.
*Forbes, August 2012