It finally happened. You just received a call from the recruiter at your dream company, the place where you’ve invested dozens of hours researching and preparing, and likely taken a few “sick days” interviewing. All of your hard work has paid off and they’ve offered you a job! But before you sign on the dotted line, ask yourself: how well do you really understand the total package of your offer?
The reality is that every company thinks about “total rewards” - HR speak for all of the elements of a job offer (which we’ll cover below) - differently. And while in today’s world the average tenure at a company is only a few years, consider your job offer as if it were a long term decision. What are the elements you might expect, and how should you prioritize them against each other?
This is the most common and straightforward part of compensation. Your base salary is the fixed amount of money you receive from your employer for the work you perform. The great thing about base salary is that it’s predictable - you know exactly how much (minus taxes) you are going to get in your bank account each pay period. When evaluating base salary presented to you, don’t be shy about asking these questions:
- Is it an annual base salary or an hourly rate?
- Are you eligible for overtime pay in your role if you work beyond a set number of hours?
- How frequent is the pay period? (Some companies pay monthly, twice a month, or every other week.)
- How often is your base salary reviewed, and at what point would you be eligible for growth in your base? (Either through an annual compensation review or through performance reviews.)
Some roles - though not all - are eligible for a bonus on top of their base salary. There are a few different ways you might see a bonus pop up in your offer:
- Performance bonus: This is typically awarded annually and can be determined by company goals (i.e., achieving revenue targets) or individual goals (as measured by a performance review). This could be offered as a flat dollar amount or a percentage of your base salary. A good question to ask your recruiter is whether the bonus is a target or a ceiling - if the former, then you’d have the opportunity to receive a larger bonus if you or the company outperforms goals.
- Sign-on bonus: This is a one-time bonus that is typically paid at the time you sign the offer or within your first few months at the company. Often, a sign-on might be used to help round out any compensation that you’re walking away from at your current company, or simply as an extra incentive to make your offer more compelling. With sign-on bonuses, pay attention to the fine print - most likely, your offer letter will contain a “claw back”, which essentially states that you’re required to repay your sign-on bonus if you leave the company on your own volition within a certain period of time (usually within the first year).
- Relocation bonus: If you’re moving cities in order to take this job, you might ask if the company offers relocation assistance, either in the form of a one-time bonus or a reimbursement of your expenses. Not all companies offer this and it may be dependent on the role or level, but it’s certainly worth checking.
One thing to consider is that bonuses are often taxed at a higher rate than base salary, so factor that in when you’re calculating your take-home pay as related to your offer.
This is often the most complex part of any offer, and the element that recruiters here at HubSpot spend the most time explaining to candidates. Traditionally in the market, equity is reserved for senior hires; however, more and more companies are opening up their equity pool. (In fact, at HubSpot, we make equity an element of every full-time offer, so all of our employees are shareholders.) Some things to consider if equity is a part of your offer include:
- Is the equity in the form of options or restricted stock?
- What is the vesting schedule (in other words, when does equity convert to cash)?
- Is an equity grant a one-time thing that happens at the time of your offer, or is there potential for additional equity grants over time?
This is usually an afterthought for most of our candidates, but the reality is that not all benefits plans are created equal and there is a wide range of coverage options. Most commonly medical, dental, and vision are included, but also things like long-term disability, life insurance, and flexible spending accounts can be added. The biggest question is: how much does this cost you? I once worked at a company where medical, dental, and vision care were completely free to the employee, while other companies may offer plans with higher premiums (monthly payments) and lower coverage (only a certain percentage of a doctor’s visit or a procedure is covered by insurance and you’re responsible for paying for the rest out of pocket).
Other benefits outside of the health sphere can include, among other things, vacation time (do you accrue Paid Time Off or does the company, like HubSpot, offer unlimited vacation?), backup care options (for a child, family member, or even pet), a retirement program, or tuition reimbursement? Pay attention to all of these things carefully, because the incentive to you - or the cost - can add up quickly.
You may be thinking that with all these elements of compensation we’ve already discussed, what else could there be? Ultimately, if you’re going to make a smart decision, you should be paying attention to the other aspects of an offer as much as the financial elements. For example, you might be willing to take a lower salary if it meant that you could work remotely and not have to deal with commuting into an office. On the flip side, if you know you’re going into a job where long hours are the norm, you might try to negotiate for a higher salary. You also might be in a scenario where there is no room to negotiate an offer. That’s why it’s important to consider what’s at stake, including:
- What level of flexibility does the company offer? Will you be able to work from home as needed or jet out for a doctor’s appointment with minimal issue?
- What stage is the company in and how does that affect your ability to have an impact?
- What career growth opportunities are available? Does the company have a track record of promoting internally? Will you have the opportunity to move outside of your department if you want?
- Do you like the people you’re going to be working with - your boss, your peers, or the people you’ll be managing? Are they people who will challenge you, teach you, and generally be with you enjoyable to work with?
Ultimately you want to be in a role and part of a company where you feel like you’re having an impact, learning and growing, working with great people on a product or service you’re excited about, and can be your best professional - and personal - self.
The last piece of advice I’ll give you is not to rush - while you may be pressured to make a decision on the spot when you get that call from your recruiter, resist temptation and give yourself some time to consider all of the elements and always ask to see it in writing. And never, ever, resign from your current role before you’ve signed the offer letter for your new role. Ultimately, the decision to change jobs is anything but trivial, and the offer is a big piece of how you’ll make that decision, so take the time you need to evaluate all the elements, consult with your family, friends, or mentors, and get to a point where you feel great about your decision before you formally share it.