If you’re in the position to need to critically assess several job offers side by side before choosing one, then well done! This is a dream situation for job seekers, allowing you to think more broadly about your options for your career going forward. It can also make you feel a lot of pressure – what if the decision you make now turns out to be the wrong one later on?
Maybe you’re a new grad and have received multiple job offers across entry-level and graduate scheme roles. Perhaps you were job hunting whilst in employment and received an offer, which drew a counter offer from your current employer. Maybe your job hunt has simply gone so well that you’ve received several proposals simultaneously.
You have a lot to think about. Given you hold a pretty good hand, you should be able to ask for time to consider the roles you have been offered. If you have a good enough relationship with the recruiting businesses, be honest and explain that you have another offer and need a few days. If you join them, they’ll be flattered that you chose their business over another – and if you don’t, then at least you have been transparent and shown your integrity.
Don’t leap into any decision. Take some time to consider the following ways in comparing salaries between job offers, and you have more chance of making the right decision for your long-term career prospects.
Count Up the Financials
The first place to start, naturally, is in comparing the financial rewards on offer. To make your comparison more objective, you may want to capture your figures and thoughts on a spreadsheet. This allows for easier comparison between multiple scenarios.
Take into account the financial reward you would expect over a year in each possibility. Start with salary as this will be the major contributor to your financial remuneration.
Decide whether you will make your comparison in gross or net terms. Gross is easier, but bear in mind that salaries that are close to income tax brackets might be disproportionately impacted by the tax you need to pay. If one salary offer edges you over the threshold for a higher level of tax, don’t forget that the proportion over the threshold will be taxed at a higher rate. Furthermore, consider the impact of your salary on existing benefits or debts. In the UK, for example, benefits and tax credits may be removed at a higher salary level, and student loan repayments may increase.
Add any additional allowance in at this stage – a car allowance or mileage payment, overnight or travel contributions should be weighed up. You may need to make certain assumptions at this stage about the number of miles you’re likely to cover for traveling to work or the amount of time you will spend away from home. Record your assumptions so you can refer back to them later.
Next, add up other possible financial rewards such as bonuses, long-term incentives or share awards you might be entitled to. Bear in mind that these schemes do not generally come with a guarantee, so it is worth asking how often they pay out before you decide how much to factor into your calculations.
Finally, include the fixed financial benefits like pension, share save schemes or tax breaks (such as those offered in the UK for childcare or bicycle purchase). What employer contributions are made to a pension is important – it’s basically free money. It might feel a long way off, but a decent pension can add a significant financial value to a salary offer.
Assess the Non-Financial Implications
You should now have a figure which collates all of the financial benefits you can expect from the roles you are considering. Don’t forget to record any of the assumptions you have made to come to this number. For example, if you have assumed that the bonus scheme will pay out at 50% or that you will be employed for long enough to accrue long-term incentives or long service benefits, recording this now means you can apply the same criteria as you go along.
Now, catalogue the non-financial benefits you can expect – take into account discount cards (not forgetting to critically assess whether or not they are really useful to you!), holidays and public holiday allowances, and type of working week.
You can add a financial value to these elements if you want a pure comparison. An extra day holiday, for example, could be viewed as an additional day paid. In contrast, an unusually long working week might mean that your hourly rate is in fact lower in one role to another.
It is also worth considering overtime status – whether or not overtime is paid and available might influence your decision.
Finally, review the offers based on their sick, maternity, paternity, and parental/dependent leave policies. You may decide some of these factors are not important to you personally, but if you plan on a family, for example, a good maternity policy is a very valuable benefit.
Check Your Outgoings
The next aspect to consider is whether or not either role will materially impact your outgoings. How do the travel and commuting costs compare? If one role allows you to work from home, this might significantly reduce your regular expenditure.
Does the dress code matter? If you are required to buy a uniform or a whole new wardrobe, include a set amount for this in your calculations.
Finally, estimate your daily spend if the roles are in different environments. Whether or not there are subsidised facilities for staff lunch, for example, might be a factor that is important to you.
To compare salary offers now, remove the anticipated costs from the anticipated income to come up with a financial number for comparison.
Read the Small Print
The point of some financial and non-financial rewards is to tie you into a role or business. Don’t count on benefits you might not stay around to enjoy.
A quick check of the small print is all it takes. For example, if long-term incentives are offered only after a significant tenure, and you anticipate the role being only short-term, they might not be a genuine benefit to you. If you plan on starting a family soon but the maternity benefits only come available after a period of service, then they again may not be the selling point you imagined.
Don't Forget it's Not all About the Money
Having carried out a thorough and objective analysis of your salary offers, don’t forget it’s not actually all about the money. What are the long-term career prospects in the different roles? How do you feel about the team and boss in each position? What about work content and scope?
Use your analysis to guide you, but do not ignore your gut feeling. If your analysis is pointing you to a role that you do not feel comfortable about, then take heed. At the very least, you need to find out more.
Comparing salary offers is not actually a simple question of setting two numbers on a page and deciding on which is higher. Salary offers come with so much to think about, including financial and non-financial benefits and the simple impact on your life of the change involved in taking on a new role. By working systematically through different offers, you have the opportunity to listen to both your head and heart in your decision-making and select the best role available to you.