Navigating Job Change
Recently, I made a big decision that affected me and my family. I changed employers.
I wasn’t looking for a different job or company. I was tapped for the move by a former colleague — one whom I trust and adore working with. He thought I’d be a good fit for an open role and encouraged me to make the jump.
My former company is a well-established global presence, very corporate, very large. Chances are you’ve heard of them. My new company, however, is a start-up, privately held, and you probably don’t know of them unless you’re in a very specific industry. There isn’t a stadium named after them, I’ll say that.
The decision for me was about more than money. While it was a slight bump in salary, the total compensation package was about equal. My former employer offered a stellar 401k match, which was based on my contributions as well as length of service. Since I’d been there several years, the company was contributing almost double what I was toward my retirement account. And for the last seven years I’ve enjoyed an annual bonus of up to 15% of my salary. But start-ups don’t often have 401k match or annual bonuses as part of the package, and my new employer is no exception, so that was a significant hit to my total financial picture. In essence, it was a lateral move financially, but there was one large differentiator in favor of making the change — 100% remote work.
Weighing the pros and cons of in-office vs. remote work — and other factors to consider when changing employers
Remote work isn’t for everyone, but for me in my stage of life — with three kids and a spouse who works on-site — it has been a game-changer in the best way. Removing a commute from my daily 9-5 work saves me time, gas money, and wear and tear on my vehicle. Additionally, I have the ability to be home when my kids get home from school in the afternoons. I can prep dinner, swap laundry, and let the dog outside on my lunch break. I now have the ability to walk my dog when the sun is up and still have time to shower before work starts… no more morning walks in the dark and 5am showers!
The downsides? I’m always at work, and as a recovering workaholic, I have to enforce some boundaries. With a new work routine, I have to enforce a strict log-off time for myself so that I don’t find myself still working at 6 or 7pm.
When considering a job change or employer change, we’ve got to weigh out all of the variables, measuring the pros and cons both financially and intrinsically. Not all value can be counted in dollars. Today we’ll talk through all of the changes that could impact both your wallet and your overall quality of life when it comes to changing employers.
What Changes When Your Job Does — The Dollars and Cents
Job transitions don’t just shift your title, salary, or where you log in each day. They ripple through nearly every corner of your financial life. Some examples are…
Pay amount: Make adjustments to the income portion of your budget to drive expense decisions. Do your best to calculate federal, state, and social security taxes to get an idea of your take home pay.
Pay frequency: Weekly, biweekly, or monthly paychecks affect how you manage cash flow. In my case, I went from twice-monthly pay to biweekly… it doesn’t sound like much of a change, but it meant instead of the same exact income each month, some months I get 2 paychecks and some months 3. It changes how I have to budget monthly.
Benefits costs: Health insurance, retirement plans, and childcare or commute assistance may look different — sometimes better, sometimes not. In my case, the health insurance premiums were within $20, but the impacts of the different insurer changed other lines of my budget. My family’s prescriptions, for example, are now more expensive to fill every month. The retirement plan, as mentioned, is significantly different and extremely impactful. In order to keep my retirement plans on track, I am contributing a higher percentage of my salary to my 401k now, which affects my take-home pay and therefore my budget.
PTO policy: Some companies offer a specific amount of PTO time, and you’ll receive pay for that accrued time if you leave or are terminated; and some offer unlimited PTO, which sounds great, but it actually means you do not get paid back for unused time. My former company offered 20 paid vacation days per year, and up to 5 days could roll from one year to the next. My new company offers unlimited PTO, meaning if/when I leave, I will not get a vacation time pay-out. So I’d better be intentional about using time off.
HSA contributions: Some employers offer a contribution to an employee Health Savings Account, if applicable. My former company did not, but my new employer does.
Pay structure: Salary versus hourly, base versus bonus, or variable pay can all reshape planning. My new job is base salary only, plus a small reimbursement allowance for cell phone and wifi. My former job, as mentioned, offered a substantial bonus opportunity, based on company performance. So this was a significant impact.
Other perks: Additional incentives like free lunches, product or service discounts, or free or reduced cost events can carry a lot of value and aren’t listed on your pay stub. My former company had a lot of discounts attached — from vehicle maintenance to free concerts to gift cards based on colleague praise. There were a lot of great perks that I considered part of my total compensation package.
Lag time: Sometimes there’s a gap between jobs or between your first day and your first paycheck, so plan accordingly. This one could have hurt because I didn’t receive my first paycheck from my new company until I’d worked three full weeks. Thankfully, my former company issued my PTO-paycheck from accrued vacation time, which helped bridge the gap. Had that not been the case, I would have had to adjust my monthly budget for a short time or moved some cash from our high-yield savings account to cash flow us through that first month.
Knowing these changes up front helps you not only weigh your options but also allows you to adjust your plans with less panic and more intention. So do not skip these comparisons! And be sure to check your assumptions closely by comparing those first couple pay stubs.
When I compared “old job” vs. “new job” from a purely financial view — there was more reason to stay than to leave. After all, moving companies is a lot like moving homes. There’s some pain to it. Leaving my work friends to go somewhere where I knew almost no one, changing my comfortable daily routine, learning a new culture and business — it’s all impactful and disruptive.
But there were other non-financial changes to compare. For me, these qualitative factors ultimately tipped the scales.
What Changes When Your Job Does — Beyond the Budget
Work arrangement: Is the job remote, hybrid, or on-site? This impacts what each day looks like and is difficult to measure in dollars (apart from fuel or transport costs). There are downsides of each, as mentioned, so be sure to evaluate for yourself.
Growth Opportunities: Tuition reimbursement for furthering your education, employer sponsored development and training may not impact your take-home pay immediately, but it can significantly impact your future earnings.
Role responsibilities/title: Is the new role a lateral move or promotion? Even if it’s similar pay, a promotion or move to a new challenge can build your resume to strengthen your power on paper.
Company security: How secure and well-known is your prospective employer versus current? My former employer was much larger, but layoffs were becoming more and more prevalent there of late, so I was feeling less secure in my position.
Company culture: This is one of those non-quantifiable factors that has such a significant impact. If your new role involves better work/life balance, collaborative co-workers with similar values to yours, or includes some unique perks — like you can bring your dog to work, for example — that might tip the scales for you.
I’ve already spoiled the decision a couple times here, so you won’t be surprised to learn that I ultimately chose to make the move after weighing the non-financial changes. The choice was quite personal, as everyone’s should be. So far, for me, it’s been a wonderful change, and the time I took to make budget planning changes has made the adjustment so much more pleasant.
Are you weighing a job or company change for yourself, or have you been there in the past? Please share your experiences, how you made the decision, and how it all turned out. I love hearing from you!
And if you need customized coaching for your own professional decision — hit me up! I’m here to help.