Evaluating the Job Offer – What is Missing?

When you get a job offer what is the first thing you look at?

The Money!

If all you are looking at is the money in the job offer, you may end up very disappointed a few months down the road.

I wrote about determining what you want in non-financial terms in a previous post. I wrote about the need to determine what you really care about before evaluating the job offer.

What is Missing or Hidden in the Job Offer?

There are two areas of compensation that are changing in the workplace—Paid Time Off (PTO) and health insurance.

When I went to work for IBM in 1978, I was given two weeks vacation that was allotted to me at the beginning of the year, and I had virtually an unlimited amount of sick leave. Pretty generous! At five years, I was allotted three weeks of vacation, and we could carry any unused vacation forward.

Most companies have moved to a Paid Time Off (PTO) model where you earn a certain number of hours of PTO with each paycheck. This way, companies do not have to track whether it is sick or vacation time.

What you should be looking for in the job offer as it relates to PTO:

  • Holidays – Some businesses have cut the number of paid holidays back to a minimum and expect the employee to use PTO for the rest.
  • Beginning PTO balance – Is the PTO balance zero when you start? If you have a planned vacation within the next six months, you will probably not have enough PTO time. You can negotiate for PTO time to be added at your hire date.
  • When does the accrual rate of PTO time increase? Do you have to wait one or three or five years to start accumulating PTO at a higher rate? You may be able to negotiate to start at a higher accrual rate.
  • Can you carry the PTO balance over from year to year?
  • Will the business pay out any remaining PTO balance when you leave? This was a huge issue for me when I left my last corporate gig. I had accrued over 5 weeks of PTO and I had to make sure I would get paid before I left.

Time off from work is valuable. You need to look at this carefully.

What you should be looking for in the job offer as it relates to health insurance:

  • Is you spouse covered? Are you planning to put your spouse on the health insurance plan? Check to see if that is allowed. Many businesses are dumping insurance coverage for your spouse.
  • Does the business contribute to coverage for your spouse and children? When I went to teach high school math for a couple of years, the school district allowed me to add my wife and child to the policy, but I had to foot the entire bill for the additional coverage. My out of pocket expense was double my COBRA payment from my last high-tech position. I stayed on COBRA until we could find alternative insurance for my wife and child.
  • If your spouse is covered, but the out of pocket expense is very high, consider going to the Healthcare Market Place. Due to the fact that your spouse is eligible for group healthcare coverage from the job offer, you will NOT be eligible for any tax credits. This can be a balancing act with thousands of dollars dependent on your decision.

Usually, the health insurance issue is not negotiable. What you do want is to be able to evaluate the offer with your eyes wide open.

PTO and health insurance benefits can be a large portion of your compensation. Look at these items in the job offer seriously!