Have you ever been here? You are working to get a job, and then, after some time with no activity, all of a sudden you get a couple of interviews and more than one opportunity? Well this is exactly what happened to one of my close friends over the past couple of weeks. To keep some anonymity, we will call him Al.
Al was actively looking for a role in IT, and over the past couple of weeks was getting close to landing a position at Company A which was about 8 miles from his house. His previous role, which he voluntarily left, was 50 miles from his house, so the closeness of the commute was certainly attractive to him. About the time he got the offer from Company A, and was prepared to accept it, he received a call from another company (Company B) that wanted to interview with him. The recruiter from Company B felt Al would be a great fit but obviously, it was too early in the process to give an offer of any kind. Here is the kicker; Company B’s potential salary was about $40,000 more per year than Company A.
Summary:
Company A Company B
Offer in Hand High Interest on Both Sides
8 miles from home 40 miles from home
Comfortable Salary Potentially $40,000 > Company A
Struggling with making the decision to accept Company A’s offer when he had such a high interest in Company B, he called me looking for advice.
Before I tell you how it ended up for Al. Let’s discuss my thought process for this type of situation from where I sit as a recruiter every day.
- First look at commute time and figure out what your time is worth, as well as what you will spend on gas and wear and tear on your vehicle. This can certainly add up when considering “big city” commutes.
- Look at the total compensation package (base, bonus potential, benefits, retirement, time off, work-life balance)
- How much will the benefits cost? If the benefits cost $800 more a month at Company B, then the offer is really only $30,400 more a year. Still a lot of money, but not the same as $40,000.
- Company culture- will you like working there and is the position really what you want to do.
- Once you have these you can figure out how much your offer really is.
For the sake of keeping this argument as simple as possible, let’s say both companies benefits are the same, both company cultures are a fit and both positions will be equally fulfilling. Then the only thing we really need to dissect is the cost of time and money.
Let’s break down both potential offers
Company A’s offer = $100,000 a year with 3 Weeks of vacation a year and 10 paid holidays. 8 Mile commute (10 minutes each way so 20 minutes a day)
Company B’s offer = $140,000 a year with 2 Weeks of vacation a year and 9 paid holidays. 40 mile commute (75 minutes each way so 2.5 hours in the car a day)
Let’s first figure out what each company would be paying if you were to put an hourly wage to it.
Company A= 52 Weeks a year – (3 Weeks of Vacation +2 Weeks of Holidays) = 47 Weeks a year to work for $100,000 year, but if you want to get really crazy add in your commute and maybe the cost of gas. I will first add the commute of 20 minutes a day which equals 100 minutes a week, which we will just round up to 2 hours a week in the car for work. This means your average work week would be based on 42 hours. Now I know what you are saying, “Wow if you work only 40 hours you are lucky, as most people work more.” You are right but for the sake of trying to keep this as simple as possible let’s just say both companies have the same work-life balance and a 40 hour work week. Now we have all the information to evaluate your hourly wage.
Company “A” Hourly Wage:
$100,000 a year $2,127.66 per week in salary = $50.66 per hour 47 Weeks = 42 Hours a Week
Now let’s do the same thing with company “B”.
Company “B” Hourly Wage:
$140,000 a year $2,904.56 per week in salary = $55.33 per hour 48.2 Weeks = 52.5 Hours a Week
So now we can see that the difference in pay is really only $4.67 per hour multiply that by a 40 hour work week and it’s only about $9,714 difference a year. You can also then take it one step further and compute how much more in gas money you will spend each year in Company B. For this we will say 800 miles a week in stop and go traffic. Company A would only be 80 miles a week. This means 720 more miles a week will be driven for Company B. We will estimate that cost to be 2 extra tanks of gas each week so about $75.00 a week extra in gas multiplied by the 48.2 weeks you will need to work at company B, and we now see that it is an additional $3,615 a year in fuel costs to work for Company B.
Working a problem out like this will help you to determine if $40,000 a year is really $40,000 a year for you. In this case, $40,000 a year is actually only about $6,100 more a year or $2.93 per hour or $508.33 per month. Again certainly something to get excited about, but it is vastly different than the original $3,333.33 per month difference you get if you don’t go through this type of analytical exercise.
So what did Al do?
Al ended up taking my advice and talking directly to who would have been his future boss at Company A. He told this person about his dilemma and asked one simple question. What would you do? This simple question then shifted all the pressure from him (Al) to her (future boss). It allowed his future boss to feel like her opinion was regarded and appreciated, which is certainly something a boss wants to feel.
She informed him they had a second candidate who they liked but not as much as Al. She understood where he was coming from and also understood that he was not fishing for more money from Company A, but just laying out the facts of the situation. She let him know that she was hoping to have this position filled by the end of the year, which let Al know that he really needed to decide what to do within the next 48 hours if he was going to accept the offer or prepare for another interview.
Al took some time, ran the numbers and determined that the offer he had in his hand was what he wanted to pursue. Going through this exercise really helped him determine what the “real” difference was between both offers. More importantly, it helped him get re-excited about Company A.
At the end of the day, when you are choosing between two opportunities, be sure you realize this is a good thing, and do whatever you need to be sure you are going to be at peace with your decision. There is nothing worse than the constant feeling of “what if.”
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