The U.S. labor market is in favor of job seekers right now. In this environment, many are taking the opportunity to advance their careers by switching employers. While many end up in more advantageous positions, some end up in worse situations than with their previous employers. Before you end up in the latter group of job seekers, here are 5 questions to ask before accepting a job offer.
What Is The Salary?
It goes without saying that one of the most important things to know before accepting your job offer is how much you are going to get paid. While some say asking this question is not proper corporate etiquette, if you already have the offer this is information you need to know. It’s even more important if you have 2 or more offers that you are considering. Also, knowing the salary information earlier allows for time to negotiate a higher salary. Remember, your salary directly impacts your standard of living and your ability to build wealth.
What Is The 401(k) Match?
If you’ve read my blog, you know I like sharing statistics on retirement savings. I do this because the social security system as we know it today will not be the same 30 years from now. Therefore, we have to plan diligently. So here are the stats. The average American (65 and older) makes $38,000 annually and has a net worth of $170,000. With numbers like these, retirement looks far out of reach and very dismal for many.
A 401(k) is one of the easiest tools to ensure financial stability in retirement. Find out what your employer’s match is and how soon you’ll become fully vested. Competitive retirement plan matches are usually between 3% – 5%. However, there are some companies who offer up to 8% dollar for dollar match.
What Is the Bonus Package?
To get a complete picture of what your total compensation will be, you should inquire about bonuses. It’s good to know when it’s paid out, what the average payout is and how to achieve the highest possible amount. Remember your bonus will be contingent on your performance but having this information will be useful for financial planning.
Another type of compensation to inquire about is profit sharing. This is a separate compensation from the regular bonus. Profit sharing is a compensation plan where companies give a portion of their profit to employees. This extra compensation is to attract high talent in the current competitive labor market. Of course, this works out in your favor as the higher the compensation the better your chances of attaining your financial goals. Don’t forget to ask this question before accepting a job offer.
Are There Employee Stock Options?
Some companies offer employees stock options. This is a type of equity compensation granted by employers to their employees. Instead of granting stock, employers give derivative options that can be held or sold by the employees. Depending on your management level, this could be included in your total compensation package.
Is There An Education Reimbursement Program?
Furthering your education is one of the best ways to quickly advance your career. Education, however, is very very expensive. An education reimbursement plan could add tax free money to allow you to learn a new skill or advance your study. A savvy person would consider tuition reimbursement a part of their total compensation with the company. By having your employer pay for a portion of your tuition, you are able to save and invest your own money.
I hope you found this blog helpful and made note of the questions you need to ask before accepting a job offer. Good luck job hunting!
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