One of the most critical aspects in evaluating your current professional financial worth is to fully understand your compensation package. This goes well beyond the often easily understood salary or hourly wage and the sometimes not-so-easily understood bonus program.
Without a complete handle on your compensation, it’s extremely difficult to assess the value you provide your current employer let alone could offer a new one.
It surprises me most of our (milewalk’s) job candidates don’t understand the complete details of their compensation packages. It dawned on me; this would be a great opportunity to share how we help them capture this information!
At the end of this post, you can download a handy checklist to quickly capture these eight key compensation areas so you know your current professional financial worth.
In addition to your annual salary or hourly wage, capture other quantitative and qualitative elements that might influence a job position change within or outside your current company. This information might include the date and amount of your last raise as well as the projected date and amount of your next raise. Why? Is your salary $100K, but you just received a $10K increase from your employer? Was your salary $100K when you filled out the job application at the beginning of a recruitment process with a new employer only to receive a $10K increase during the process? This insight matters.
Bonuses come in many forms and varying frequencies. You might receive an annual or quarterly bonus contingent upon company and individual performance. You might receive commissions if you’re a sales-oriented employee. Regardless of your particular position, there are a handful of key bonus-related elements you should capture including the target bonus, term (monthly, quarterly, annual), date and amount of last one received, and date and anticipated amount of the next one.
This is a rather broad category I’m using to lump designated stock shares, Restricted Stock Units (RSUs), Incentive Stock Options (ISOs), Phantom Stock (used in privately-held companies), Profit Interest Units (PIUs), Employee Stock Purchase Plans (ESPPs) and any other form of stock you can imagine. Know what you have, what it’s worth, when it vests, and what you’ll be leaving behind should you head for the door.
The 401(K) program is a wonderful pre-tax incentive for employees. Whatever you allocated to your account is yours to keep put or rollover when you leave the company. You should, however, understand your current company’s matching program (the percentage or amount) and the vesting schedule for the match it provides.
Some organizations distribute a form of profit sharing into retirement accounts on behalf of their employees. This program is similar to the Company Stock and 401(K) Match as appropriate for your situation.
Some companies provide special allowances for their employees. This is a catchall group to cover areas such as telephone, car, and training allowances to their employees. This is often very company-specific and role-specific, but you should give more than a passing glance though to all the “hidden” perks you might receive.
Many companies encourage their employees to do some form of continuing education. Some organizations reimburse for all or some portion of the tuition for employees to attain Associate, Bachelor, or Graduate Degrees. Understand the true financial contribution your company has or will provide. Equally important to understand is any retribution or reimbursement you will be responsible for in the event you leave your current employer.
This means anything related to Paid Time Off (PTO). Companies have a variety of ways of allocating and designating this—vacation days, sick days, personal days, floating holidays, and so on. Some companies let you carry it into the next year, while others pay it out or take it away.
While there are many other areas that you might consider compensation, these areas will typically allow you to create a comprehensive view.
If you’re interested in a handy checklist to capture this information, feel free to download Assess Your Current Professional Financial Worth here!