It is a simplistic belief that all you need to consider prior to resigning, is how to tell your Manager. This is an important communication that can create stress when thinking about it. However, there are also a lot more items that a person should contemplate once they have decided to leave their current employer.
In particular, there are a number of financial considerations that an individual must take under consideration when planning their resignation. Unfortunately, these are often items that are overlooked in the excitement of receiving a job offer. Let’s take a look at some of the financial considerations that should be on your mind.
• Would You Consider a Counter-Offer? – You should plan ahead as to whether you would consider a Counter-Offer from your current employer. I rarely recommend this as a course of action, since rarely does someone leave for purely financial reasons. Usually there are other issues with the company such as your Manager, the culture, or career opportunities that are also driving your decision. However, if your pending departure is strictly due to compensation and your current employer meets or exceeds your number, then perhaps it is an option. Please keep in mind that it took you “threatening” to leave to receive this market value offer from your current employer!
• Fully Evaluate Your New Offer – Most job seekers look only at the headline of the salary or hourly rate when making the evaluation. There are other variables to consider, such as the cost of benefits (in particular, medical) and your new length of commute (especially with the current price of fuel). If you are someone that needs medical, then compare when your new policy will start and your current one will end. Any gap will either result in you not having coverage or having to pay for it yourself via COBRA. Know the COBRA cost and make sure you have money put aside in order to pay for it.
• Benefits Review – Please do a full review of your potential new benefit package compared to what you have now. As mentioned above, the cost of medical can vary greatly amongst employers and can be a real differentiator. Also, look at what is being offered for a 401k match. A substantial reduction in this area can really change a person’s retirement outlook. Regarding the 401k match, if you are with a company that does their match less often than with each paycheck, then you may want to coordinate your departure with the quarterly (or even annual) deposit of these funds. Finally, look at programs that may be missing and what would be the cost for you to replace it on your own. An example would be supplemental disability insurance, as many employers do not offer it. If you are currently in a plan with your current employer, then it not only may be expensive to replace, but if you have a current medical condition, you may not even be able to get into a program with your pre-existing condition.
• Paid Time Off – There are two areas to consider regarding this topic. First, what is being offered compared to what you have. Are you receiving as much (or more) paid time off as you currently enjoy. Another area to consider is the pay-out policy for the time you currently have in your balance. Some employers require a certain level of notice (probably a number you would professionally do anyways), while others may have “use it or lose it” or other policies which may impact the timing of when you wish to depart. If you have a significant balance, this area can be financially substantial. One last point is that you may want to take some time off prior to your departure. If this is the case, then look up your company’s policy on taking time off after resigning to see if there are any limitations.
• Any Bonus or Incentive Program – If you are in one of these programs, then you should be familiar with any rules requiring you to be an active employee in order to receive the payout. Of course, you may want to do your best to research all of this on your own, rather than asking your Manager or Human Resources for all of these policies. Someone who is asking a lot of questions tied to policy towards the departing, will surely sound an alarm in the company that you may be thinking of leaving.
Receiving a job offer should be an exciting time for someone in their career. Although emotions are running high during this situation, it is important to also make sure you are aware and comfortable with any financial consideration that is tied to your departure.
As always, the best of luck in your job search.
The following has been prepared for the general information of WNYJobs readers. It is not meant to provide advice with respect to any specific legal or policy matter and should not be acted upon without verification by the reader.
Joe Stein WNY Human Resources Professional
Feel free to contact Joe Stein regarding questions or comments at: Joe Stein