You’ve received two job offers from equally intriguing companies. One pays $40,000 more than the other. Which should you accept?
It may seem like a no-brainer to say yes to the higher-paying one, but not so fast. In the post-recession economy, most corporate professionals need to think more like entrepreneurs, not employees, when it comes to evaluating a job offer. Just as business owners look at potential projects and engagements in terms of the return on his investment on their time—their most precious commodity—so should you. If a job eats up all of your available waking hours and requires heavy personal overhead to maintain, the ROI may not be as great as you think, and you could end up feeling resentful. You might be better off taking the lower paying job and, if you need extra income, starting a side business.
Here are some key questions to ask yourself when evaluating a job offer.
1. How many hours will you really be working? Obviously, professional careers require a big time commitment, but it’s important to figure out what that means for a particular job before saying yes. Will you be working one 40-to-50-hour a week job or, essentially, two 40-hour jobs for the salary you’ll be paid? Making $150,000 for an 80-hour a week job means you’ll really be working at a $75,000 pay rate. Is that what your time is worth? If the answer is no, figure out if the other benefits of the job, such as prestige or the opportunity to do meaningful work, outweigh the downsides of earning less than you would normally get paid for your time.
Interviewers aren’t going to volunteer that you’re expected to be on call 24/7, unless you’re going after a gig like IT director or emergency room physician. To get the real scoop, you’ll need to do your own homework into the culture of companies where you’re applying, by talking with past and present employees you know. Also listen carefully during interviews to clues on what a typical day will really be like. If a company promises free dinners or a car service home, that’s often a tipoff that you’re expected to work until 8 or 9 pm fairly often. And pay attention to the times you get emails from contacts at the company. Are they confined to normal working hours, or do you find that hiring managers are responding to you at 8 pm with apologies that they were swamped and couldn’t get back to you earlier?
Bear in mind that team-building activities like happy hours, bowling nights or weekend retreats, which may seem optional on paper, really are mandatory at many firms if you want to get promoted. Find out how often they take place and factor them into your work hours, too.
2. Will you be able to use the promised benefits? Viewing paid vacation as part of your compensation package only makes sense if you can realistically expect to take the time off. Expedia’s 2013 Vacation Deprivation study, found that average U.S. workers use only 10 days of their allotted two weeks of vacation days each year. That’s down from 12 days last year. Why are they passing up vacation days? Work obligations forced 35% of U.S. respondents to cancel or postpone vacation time. Don’t count on interviewers to tell you that the only person who takes more than 5 days of vacation a year at their firm is the CEO. You’ll need to do your own undercover digging to figure out if you’re looking at a culture that’s work hard/play hard—or just work hard/work hard, 24/7.
3. How much will it cost you and your family to maintain the job? A very visible, high-level position may end up being less personally profitable than you think once you subtract the added overhead it brings. If, realistically, the demands will be so great that your spouse will have to drop out of the work force to keep the home front running smoothly and help you meet the social obligations of your job—or you will need to hire a support system of babysitters, after-care providers, dog walkers, house cleaners and other help, it’s important to subtract those costs from your salary offer to figure out what the real household profit of a job would be. Smart entrepreneurs always look at the overhead involved in taking on a new contract or gig. You should do the same when evaluating a new job. Doing the math will tell you right away if you need to negotiate a better deal.