How much did you leave on the table with your last company? When changing companies does the new salary increase outweigh the long-term investment? Recently I read a LinkedIn article, “Why employees leave their jobs”. The article noted, “What convinces employees to leave vs. what compel employees to leave”. Interesting on both lists was the obvious; better compensation and benefits. However, depending on the timing of your last job change you could have left more on the table than you gained!
For example: A sales person earning $100,000 a year receiving profit sharing, pension, stock options, 401k or a combination leaves their company after four (4) years. The company requires five (5) to be 100% vested. One could leave nearly six figures to go back into the company’s rainy day fund. According to a report on About.com/Financial Planning “Changing Jobs and your 401k” states someone earning $40,000 a year leaving one year to soon can lose as much as $15,600.
Ask yourself a few questions before making the decision to change employers:
- When do you retire? If within five years of being fully vested in a retirement plan. Why leave? Is there an opportunity within the company that provides the same challenge?
- How much money are you leaving on the table? Take time to understand your current and future investment plans. Communicate what you are leaving behind to your new employer and negotiate a signing bonus or additional salary to recoup loss within one year.
- What soft cost are you not considering?
- Longer commute
- Additional cost to commuting
- Longer work hours
- Additional Travel -Time away from family
- Dress code that may require a shopping spree!
Next time someone makes you an offer “you can’t refuse” take a closer look at your financial statement. Prior to making a decision understand the present and future financial impact. If you are leaving as a result of other reasons; work/life balance, better leadership or career advancement opportunities and received what you were looking for then you’ve nailed it!
