Latest / Voices for Voices® / Career Tips: Unpacking Job Offers for Fair Compensation | Episode 83
Transcript
- 0:00Justin Alan Hayes: Chapter 5, the Roof.
- 0:03Justin Alan Hayes: You have just received a telephone call from the HR representative that wants to make you an offer for the job you interviewed for.
- 0:12Justin Alan Hayes: How awesome is that?
- 0:14Justin Alan Hayes: I remember when I received my first job offer over the telephone.
- 0:19Justin Alan Hayes: I was happy and felt validated that all the time, energy and preparation I had undertaken over the years was finally yielding some fruit in the form of a job offer.
- 0:32Justin Alan Hayes: Some of us may want to be thanked and congratulated on our preparation in real time, but the fact is that preparation is almost always a thankless act.
- 0:43Justin Alan Hayes: When it happens, it is only after you have spent the time and energy preparing that you will be rewarded.
- 0:50Justin Alan Hayes: Think about it from a sports perspective.
- 0:53Justin Alan Hayes: A player may perform great in all his or her practices, which in the end, only give them the opportunity to play on game day.
- 1:02Justin Alan Hayes: If the player performs horribly on game day, they will not receive positive recognition from co-players, coaches and fans.
- 1:11Justin Alan Hayes: This is even after the player can point to multiple practices of stellar performances.
- 1:17Justin Alan Hayes: It has taken me years to become patient and to understand that preparation leads to successful events, although maybe not at the exact timetable you envision.
- 1:31Justin Alan Hayes: Patience is an important virtue, especially as it relates to the workforce.
- 1:36Justin Alan Hayes: Additionally, you may have completed the final interview three weeks or a month ago and accepted defeat in terms of getting the position you interviewed for.
- 1:46Justin Alan Hayes: Since you have not been contacted by the HR representative regarding the status.
- 1:52Justin Alan Hayes: I remember thinking that if I didn't hear from the HR representative in two weeks after the final in-person interview, that company must have already filled the position with another candidate.
- 2:04Justin Alan Hayes: So what changed my view on this?
- 2:08Justin Alan Hayes: In one instance, I completed a final interview in August and did not hear back from the HR representative until October with the job offer.
- 2:18Justin Alan Hayes: After that experience, I threw all my prior assumptions out the window.
- 2:23Justin Alan Hayes: Having had experience on the management side of the hiring process, I have seen many instances where a job offer has not extended due to factors outside the control of the candidate, such as budget constraints, upcoming company or department restructuring or something as simple as the HR representative is out of the office on vacation or a personal day.
- 2:50Justin Alan Hayes: Again, control what you can control and do not spend time and energy on areas that are outside of your control.
- 3:01Justin Alan Hayes: The job offer is what I would like to call the roof of the house of you.
- 3:05Justin Alan Hayes: The reason is simple you can spend countless hours of constructing your house, from the clearing of the brush to laying the foundation and building floors one and two.
- 3:17Justin Alan Hayes: But if you do not set a roof over the house, you will find yourself fighting with the elements of the weather.
- 3:24Justin Alan Hayes: You may be thinking okay, I am filing your line of thinking, but what is the definition of a job offer and what is included in a job offer?
- 3:35Justin Alan Hayes: The Oxford Dictionary states that a job offer is an offer of employment.
- 3:41Justin Alan Hayes: The job offer can come in a few different forms, including verbally, in person, verbally over the telephone or via email.
- 3:52Justin Alan Hayes: While I have known prior colleagues of mine that have received a job offer in person, I have not personally encountered that particular form and thus cannot elaborate.
- 4:04Justin Alan Hayes: The form of job offers I have most often encountered are a combination of receiving the job offer verbally, over the telephone and via email.
- 4:14Justin Alan Hayes: How this usually works is the HR representative, recruiter or hiring manager will call you without notice, asking if you have a couple of minutes to talk.
- 4:25Justin Alan Hayes: Next, the HR representative will say that there is exciting news.
- 4:30Justin Alan Hayes: The hiring manager wishes to extend you an offer for the position you apply to and interviewed for.
- 4:37Justin Alan Hayes: Next, the HR representative will describe the different elements of the job offer base salary and variable performance pay, 401k plan, retirement plan, health insurance and relocation assistance.
- 4:54Justin Alan Hayes: If necessary.
- 4:55Justin Alan Hayes: The elements of the job offer are also reviewed in the case challenges at the end of this book.
- 5:02Justin Alan Hayes: Once the HR representative reviews all the job offer elements with you verbally over the phone, you will be asked how you feel about the job offer, regardless of whether you think that the base salary is too low or that the company is not covering relocation expenses.
- 5:21Justin Alan Hayes: When you are being asked to move over 1500 miles from your home.
- 5:26Justin Alan Hayes: This is not the time to air those concerns.
- 5:29Justin Alan Hayes: You will be able to discuss all of your questions and concerns after you have had time to review the total job offer package at your convenience with the important people in your life and summarize your feedback and follow up questions you aren't clarified by the HR representative.
- 5:51Justin Alan Hayes: I recommend asking the HR representative when they need an answer to whether you accept the job offer as is or have questions and or concerns you want to discuss with them.
- 6:01Justin Alan Hayes: From my experience on the hiring manager side of the equation, I know the hiring manager would like your answer and feedback as soon as possible but respects the job candidate, taking 24 to 48 hours for consideration, review before making a final decision.
- 6:20Justin Alan Hayes: After all, if the tables were turned, the hiring manager would in most instances not want to provide an answer on the spot over the phone, especially with the multiple parts of the job offer to consider.
- 6:34Justin Alan Hayes: If you receive the job offer on a Friday instead of responding over the weekend, when the HR representative may not be at the office to take your telephone call, I recommend telling the HR representative that you will contact them by close of business, which is 5pm the following Monday.
- 6:54Justin Alan Hayes: I have not encountered an HR representative or hiring manager who would not allow me a period of time to review the job offer, so you do not need to be worried that the company will resend the job offer.
- 7:08Justin Alan Hayes: If you ask for time to review After the HR representative verbally offers you the position over the telephone, they will email you a PDF document with all of the elements the job offer includes.
- 7:23Justin Alan Hayes: During my first offer over the telephone, I remember thinking I had to write down everything the HR representative was covering for later review before I was told a copy of the job offer would be emailed to me shortly.
- 7:37Justin Alan Hayes: I exhaled a big sigh of relief at this point, with all the emotions running through my body.
- 7:44Justin Alan Hayes: I was sure that I had written an element down incorrectly and thus influenced my decision to accept or start negotiating prematurely.
- 7:53Justin Alan Hayes: There is no need to feel like you need to write everything down during the initial job offer telephone conversation with your HR rep.
- 8:03Justin Alan Hayes: Let us now advance to reviewing the different elements of a job offer in greater detail.
- 8:09Justin Alan Hayes: The first element of the job offer that you will consider is base salary and variable performance pay.
- 8:15Justin Alan Hayes: The base salary is the amount of cash you'll receive via paper check or direct deposit to your checking account every two weeks.
- 8:25Justin Alan Hayes: In most cases, depending on the role and company you receive an offer from, you may be paid monthly or twice a month.
- 8:33Justin Alan Hayes: The timing of your pay is determined by your employer and not up for negotiation, so be prepared to be flexible.
- 8:41Justin Alan Hayes: Let us assume that the company you receive the job offer from pays their employees bi-weekly and the base salary offered is $40,000 per year.
- 8:53Justin Alan Hayes: This means that each pay, the gross amount you would receive before taxes and other line items, such as the 401K retirement plan, health insurance and life insurance, to name a few for your base salary is $1,538.46.
- 9:15Justin Alan Hayes: You have two things to look at here.
- 9:17Justin Alan Hayes: One is the base salary you're being offered competitively in the market for the job, function and geographic location of the position.
- 9:27Justin Alan Hayes: A website like glassdoorcom that was referred to earlier will give you an idea of some of this information.
- 9:34Justin Alan Hayes: One word of caution if you're not satisfied with the base salary in the job offer and intend to discuss with the HR rep after further review, make sure you are stating facts as to why they should offer you a higher base salary.
- 9:50Justin Alan Hayes: It would not be wise to contact the HR rep stating you would be happy with $50,000 per year salary without giving facts to back up your negotiating.
- 10:01Justin Alan Hayes: I remember one of my previous jobs had offered me a base salary that, inside myself, I felt was very low, but I did not have any specific facts to back up my claim at the time, just a gut feeling.
- 10:17Justin Alan Hayes: What I did was exactly what I am recommending you to do.
- 10:20Justin Alan Hayes: I did my research to build my case for countering the job offer.
- 10:25Justin Alan Hayes: When I next communicated with the HR rep, I stated the base salary I felt was fair, along with the facts to back up my claim.
- 10:35Justin Alan Hayes: Another angle to look at is your comfort level with the base salary.
- 10:39Justin Alan Hayes: All things being equal, are you able to cover your expenses such as house payment, rent utilities, gas, car insurance, food, to name a few, and save a portion of each paycheck.
- 10:56Justin Alan Hayes: This area is something only you can answer, and you will have to crunch the numbers to help guide your decision.
- 11:03Justin Alan Hayes: Since we are reviewing the term salary, it makes sense to explore a little further.
- 11:09Justin Alan Hayes: Salary, also called an hourly wage, is just a different way to say that the amount of money you would be paid is $19.23 per hour.
- 11:20Justin Alan Hayes: I am a numbers person, so I like to explore topics by every number angle that I can.
- 11:26Justin Alan Hayes: You may be a numbers person, just like I am, but even if you are not, it is still constructive to have the ability to look at things that way if you want to, which is why I broke down the pay into two different ways.
- 11:40Justin Alan Hayes: Although the salary is based off of an hourly wage, you will not be paid additional money for the number of hours you work over 40 hours a work week, monday through Friday.
- 11:52Justin Alan Hayes: Typically, this can be referred to as an exempt position.
- 11:57Justin Alan Hayes: For instance, if your hourly wage is $19.23 an hour, based off of a 40 hour work week, but you work 50 hours one week, you will not be paid extra for those extra 10 hours.
- 12:13Justin Alan Hayes: On the other hand, if the offer is presented in a way that calls out the hourly rate, then the position is most likely an hourly non-exempt position, meaning non-exempt from overtime.
- 12:27Justin Alan Hayes: In this case, you would be compensated for the extra hours worked over 40 hours each work week, depending on the industry or field.
- 12:36Justin Alan Hayes: As a recent college graduate, you could fall into either one of these categories.
- 12:42Justin Alan Hayes: This is something to keep in mind because I was not fully aware of this when I began my first job out of college.
- 12:50Justin Alan Hayes: In some job positions there may be a variable or performance bonus portion of your pay as well as the base or fixed salary we just reviewed.
- 13:00Justin Alan Hayes: The key term here is variable.
- 13:03Justin Alan Hayes: Variable, according to the Oxford Dictionary, is not consistent or having a fixed pattern liable to change.
- 13:12Justin Alan Hayes: While the base salary is consistent and recurring, any form of variable pay is not.
- 13:18Justin Alan Hayes: The non-consistent nature of anything.
- 13:21Justin Alan Hayes: Variable is precisely why I recommend that any mathematical calculations you do with estimating your expenses and savings revolve around the base salary and not the variable portion of pay.
- 13:36Justin Alan Hayes: Unfortunately, I have known people who had planned their expenses and savings around both the base salary and the variable portion of their pay, which led them into financial trouble at times where the variable portion of their pay had not come as expected.
- 13:55Justin Alan Hayes: My goal here is to do my best to have you not be one of those individuals.
- 13:59Justin Alan Hayes: In a job offer, you may be offered a base salary of $40,000 per year with a potential of another 5% in pay, otherwise known as a performance bonus, a form of variable pay.
- 14:15Justin Alan Hayes: The performance bonus can solely be based off of the financial performance of the employer or a combination of your individual performance and the financial performance of the employer.
- 14:28Justin Alan Hayes: You can control your performance, but you most likely will not be able to control the overall financial performance of the employer.
- 14:39Justin Alan Hayes: Additionally, not all job positions have a variable portion of pay attached to their fixed base salary.
- 14:47Justin Alan Hayes: If the position you are offered does not have a variable portion of pay, but it is something that you have an interest in and the research you have completed supplements your position, then it is quite fair to broach the topic.
- 15:03Justin Alan Hayes: With the HR app you are working with, I have learned that the answer will always be no if you do not ask the question, so why not give it a shot and ask?
- 15:14Justin Alan Hayes: Another popular element that is often included in a job offer pertains to a 401k retirement plan.
- 15:21Justin Alan Hayes: According to Investopedia.
- 15:23Justin Alan Hayes: A 401k plan is a qualified, employer-established plan to which eligible employees may make salary deferral, which is a salary reduction contributions on a post-tax and or a pre-tax basis.
- 15:41Justin Alan Hayes: Employers offering a 401k plan may make matching or non-elective contributions to the plan on behalf of eligible employees.
- 15:51Justin Alan Hayes: It may also add a profit sharing feature to the plan.
- 15:55Justin Alan Hayes: It ends in a 401k retirement plan accrue on a tax-deferred basis.
- 16:01Justin Alan Hayes: In 2019, the maximum you are able to contribute to your 401k retirement plan is $19,000 for the calendar year of January through December.
- 16:14Justin Alan Hayes: If the base salary of your job offer is $40,000 per year and you want to contribute the maximum of $19,000 to your 401k retirement plan, the percentage you would want to have deposited each pay is 47.5% or $730.77.
- 16:38Justin Alan Hayes: The HR department at your company will be the best resource to help you navigate the specifics of their 401k retirement program.
- 16:48Justin Alan Hayes: I have experience with employers that have not only offered a 401k retirement plan for employees, but also match a portion of the amount you contribute each pay.
- 16:59Justin Alan Hayes: This can be referred to as a safe harbor contribution.
- 17:04Justin Alan Hayes: A company match is usually a static number that does not change throughout the course of the year where they will deposit pre-tax dollars to your account.
- 17:15Justin Alan Hayes: For example, the employer that has made you an offer of employment may match the first 5% of what you put into your 401k retirement plan at 100%.
- 17:27Justin Alan Hayes: So if you have 15% of your salary assigned to your 401k retirement plan each pay, that the employer will match the first 5% of the 15% at 100%, meaning that if the first 5% was $5, then the employer would also deposit $5 each pay to your 401k account.
- 17:50Justin Alan Hayes: This is not a financial book, but it is safe to say that it would be wise to contribute at least up to the amount the employer matches into your 401k retirement plan each pay, because it is as close to free money that you will find.
- 18:09Justin Alan Hayes: It is important also to weigh all the elements of a 401k retirement plan, base salary and variable pay when determining whether to accept the job offer as is or choosing to negotiate.
- 18:23Justin Alan Hayes: While I do have experience negotiating base salary and variable pay, I do not have experience in negotiating the amount an employer matches their 401k plan, because that decision is made by top management annually and then it is cascaded throughout the company.
- 18:42Justin Alan Hayes: Base salary and variable pay attributes, on the other hand, are managed at the department level in the form of a budget and, in turn can be negotiated.
- 18:53Justin Alan Hayes: For example, if a department has a base salary budget of $41,000 per year for the open position you are receiving an offer for, that means in theory that if you counter the offer at $45,000 per year, then it is more likely the HR representative will only be able to return with an offer of $41,000 per year, no matter how much you counter offer.
- 19:20Justin Alan Hayes: Having said that, there are times where departments will exceed their budget for the allotted position if they are impressed with the job candidate and do not want to lose them to another organization.
- 19:33Justin Alan Hayes: Once again, this is an area that you cannot control and will not have access to the behind the scenes semantics that may be occurring throughout the job offer process by the company.
- 19:46Justin Alan Hayes: What I wanted to do, however, was to share with you some of the inner workings I have experienced as a hiring manager.
- 19:54Justin Alan Hayes: Each company, department and hiring manager has a different philosophy on the topic, so I would focus your time on the things you can control that I have laid out in this book.
- 20:06Justin Alan Hayes: Determining if health insurance is offered is an element of the job offer.
- 20:11Justin Alan Hayes: Understanding the different options and associated premiums, which are the costs you pay for health insurance for each pay, is yet another key element that should be well thought out in your decision making process when a job offer has been made and is under consideration.
- 20:32Justin Alan Hayes: In 100% of my experience in companies, whether large multinational billion dollar organizations or smaller million dollar organizations, health insurance has been offered.
- 20:46Justin Alan Hayes: What is the primary difference between the health insurance offered in a large or a small company?
- 20:53Justin Alan Hayes: Premium cost the premium cost deducted from your paycheck in a smaller company will be more than that of a larger organization.
- 21:03Justin Alan Hayes: Why is that?
- 21:04Justin Alan Hayes: Generally speaking, larger organizations have more employees than smaller organizations, so, just as you would expect to receive a lower price point at a bulk warehouse stores such as BJ's, sam's Club or Costco, then from your local grocery store there is also a discount purchasing health insurance for 5,000 employees versus 30 employees.
- 21:33Justin Alan Hayes: Relocation assistance concludes the key areas most often included in a job offer.
- 21:38Justin Alan Hayes: As it is included less often than the other job offer elements we have already reviewed earlier in this chapter.
- 21:46Justin Alan Hayes: Relocation assistance, when considered in context of a job offer, contains certain incentives for individuals to move from the geographic location where they currently reside to the one where the duties of the job are to be performed.
- 22:03Justin Alan Hayes: For example, an individual may live in Austin, texas, but the job the applicant has received an offer for is located in Charlotte, north Carolina, so relocation assistance may be included as an element of the job offer.
- 22:19Justin Alan Hayes: The most common elements in a relocation assistance package are cash to cover moving expenses.
- 22:27Justin Alan Hayes: Rent cancellation expenses for those individuals renting.
- 22:31Justin Alan Hayes: A realtor to assist those who have a house, a realtor to assist in purchasing a house or renting an apartment in or around the geographic area the job duties are to be performed in, and airfare for apartment or house hunting trips if the distance between the old and new geographic area meets distance mileage requirements pre-selected by the company.
- 22:58Justin Alan Hayes: Sometimes the new job starts before those individuals who wish to purchase a house in their new location are able to move into their new house.
- 23:08Justin Alan Hayes: In this case, the relocation assistance package may also include temporary housing in an apartment or company-owned house to bridge that gap between job start day and move-in day.
- 23:23Justin Alan Hayes: There may be more relocation assistance attributes than what you see above, but I wanted to cover the most popular and those that I have direct experience with.
- 23:33Justin Alan Hayes: Since I have experienced in receiving job offers that have included relocation assistance, I am a great resource to be describing this area to you.
- 23:42Justin Alan Hayes: The cash to cover moving expenses can come in a couple different varieties.
- 23:48Justin Alan Hayes: The job offer may give the option to move yourself or to enlist assistance from a company that specializes in corporate relocation.
- 23:58Justin Alan Hayes: If you choose the option to move yourself, then the company would give you a lump sum of cash, generally in your first paycheck, to cover your moving expenses, but it would be up to you and your friends or family to execute the move itself, meaning you are in charge of the entire moving process, including gathering, packing, loading, driving to your new destination and unloading your belongings.
- 24:26Justin Alan Hayes: The second option is what I have selected in the past, which is to utilize a company that specializes in corporate relocation.
- 24:34Justin Alan Hayes: The primary reason I chose this method is because there is already a lot of stress and emotion in moving to a new geographic location and starting a new job, so I did not want the added stress and responsibility of doing it all by myself.
- 24:52Justin Alan Hayes: With that being said, that was my choice, but everyone is entitled to their own preference and decision.
- 24:59Justin Alan Hayes: When I chose to contract a company that specializes in corporate relocation, my new employer assigned me a corporate relocation advisor that guided me through all of the required paperwork, set up the packing day, pick up time, driving distance and deliver my belongings to my new home.
- 25:20Justin Alan Hayes: The corporate relocation advisor was also the intermediary between me and the realtor and was instrumental in helping to managing my relocation expenses, such as the house hunting, airfare, hotel and food that were to be reimbursed to me once completed, for example, service completed with associated receipt Expenses related to the packing, pick up, drive time and delivery.
- 25:48Justin Alan Hayes: My belongings were handled directly by the corporate relocation advisor, which allowed me to follow the schedule instead of creating and following the schedule myself.
- 25:59Justin Alan Hayes: The house hunting, airfare, hotel and food associated with the house hunting trips were handled in expense form.
- 26:06Justin Alan Hayes: Expense form is the method where I made a purchase with my own credit card specifically for my job relocation, and once each house hunting trip was completed, I had to submit copies of all of the receipts for expenses that I had incurred on the house hunting trip, as well as fill out an expense report.
- 26:28Justin Alan Hayes: I then aggregated or totaled up and sent them via email attachments and mailed hard copies of each of the receipts associated with my relocation to my assigned corporate relocation advisor for reimbursement.
- 26:45Justin Alan Hayes: The key information that you will be asked to provide on an expense report are the reason for me house hunting trip, the what For me, airfare, food, hotel, et cetera.
- 27:00Justin Alan Hayes: When For me, the date and the amount spent for each Expense reports are different at each company, but the criteria and I just described have been on almost every expense report that I have ever filled out, whether for job relocation or company-related travel.
- 27:22Justin Alan Hayes: If you find yourself in this situation, purchase or reuse an old folder where you can store all of your expense receipts and related documents in one place, so when the time comes to fill out the expense report and send via scan an email or mail receipts to your corporate relocation advisor, in your receipts you know exactly where everything is located.
- 27:50Justin Alan Hayes: Some of you may be thinking, just as I did at first, that you will choose to move yourself and pocket the extra cash.
- 27:57Justin Alan Hayes: I did the math and in my case I would have only cleared a couple hundred dollars after expenses, and so I decided it was not worth conducting the move myself.
- 28:08Justin Alan Hayes: This could have been because I was moving over 1000 miles or because the employer knew the average cost of moving and was not in the business of padding the checkbook of a new hire, and in any event, an extra couple hundred dollars would not change my financial situation dramatically.
- 28:28Justin Alan Hayes: Maybe you will have a different outcome in terms of the dollars and cents offered in a job relocation package.
- 28:35Justin Alan Hayes: In any scenario you are presented with, you are free to make the best decision for you at the time the relocation package is offered.
- 28:45Justin Alan Hayes: I was lucky in that I was offered relocation assistance at different points in my professional career Because the cost to move on my own without relocation assistance could have negated any potential increase in the base salary for me accepting the job offer.
- 29:02Justin Alan Hayes: I will now reiterate that not all jobs offer relocation assistance and if they do, it could be in a similar fashion to my experience or significantly different, since company policies can govern the relocation assistance process how they deem fit.
- 29:20Justin Alan Hayes: Additionally, in my experience with the method of relocation assistance that I chose to receive, there were strings attached to the relocation assistance package itself.
- 29:32Justin Alan Hayes: Upon my acceptance of the job offer and method of relocation assistance, I had to sign a legal agreement that stated if I left the employer voluntarily before a period of two years had passed from my start date, I had to pay back the full amount of the relocation assistance out of pocket or paycheck deduction.
- 29:55Justin Alan Hayes: In my situation, the amount it would have owed the company if I breached the legal relocation agreement would have been in the thousands of dollars, which would have been a tough financial hurdle to clear.
- 30:08Justin Alan Hayes: An agreement like this is protection for the employer against a new hire that may be looking for a free ride to get to a new geographic area without regard for their new job and or employer.
- 30:23Justin Alan Hayes: To close out this chapter, I will review additional screenings that a prospective employer may utilize.
- 30:29Justin Alan Hayes: A job offer is almost always contingent on passing some form of a drug screen, urine sample or hair follicle.
- 30:39Justin Alan Hayes: All of my job offer experiences have come conditional on passing a form of a drug screen, regardless of the size of company.
- 30:48Justin Alan Hayes: This book is not intended to suggest how you should spend your personal time, but instead is intended to provide you with as much information as possible for your workforce success.
- 31:00Justin Alan Hayes: You are an adult and have the ability to control yourself as it relates to how your actions may impact a perspective of employer drug screen.
- 31:10Justin Alan Hayes: My goal here is simply to help ensure that all of your hard work up until now does not go down the drain because of an uninformed personal decision.
- 31:20Justin Alan Hayes: In addition to a drug screen, many companies require a background check as well.
- 31:26Justin Alan Hayes: This usually includes a federal and local criminal check, as well as education and employment verification.