The other day, I was contacted by a headhunter (everyone calls themselves an “executive recruiter” these days even though I’m nowhere near an executive level position) with a very attractive proposition. He had a position that was roughly aligned with my current role and prior experience with another large bio-pharma where the total compensation with some conservative assumptions would be about 90% more than my current total compensation. That includes salary, bonus, stock options/restricted stock and assumed that benefits were roughly equivalent. To most employees able and willing to change employers for the right offer, this sounds like one of those “once in a lifetime job offers that was just too go to pass up”. Without further analysis, I probably would have thought the same thing myself. However, my initial reply was thanks, but no thanks. Admittedly, I did think about it a little more and still feel the same way based on several factors. Why?
The reasons are varied and surely apply only to our current situation. For many people confronted with a similar opportunity, this would be a great move. And perhaps it would have been for me too – if my personal/professional situation were different. But I passed without asking any further questions or going down the road of interviews, negotiations, etc. only to end up in the same place. When I started considering everything involved with this transition and putting aside the benefit of a higher income, but weighing the negative aspects, here were some considerations that swayed me against pursuing:
- Location - A move would be required. Aside from the fact that we have friends and family in the area, and it’s only 1 state over, this move had some additional financial implications. We currently live a reasonable cost of living area, good school district, etc. To move within a decent commute of say, 30 minutes from the new role, the cost of living is astronomical. In my subsequent research, the same house and property we have now or a slight improvement would be about $250,000 more. To get the same or a slightly nicer house and property, we’d be going from a conventional mortgage at 4.625% 30 year fixed to a jumbo mortgage since we’d be way above the $417,000 mortgage limit for conventional loans. So, not only would we be incurring an additional $250,000 in debt, but it would be at jumbo rates, which are substantially higher than conventional rates given the credit situation in residential mortgages. (More info on Mortgage and Refinance)
- Personal work-Life Balance – There are some benefits to staying put that are tough to quantify. Over the years at my current employer, I’ve established a reputation, relationships with hundreds of people and I actually love my current role as a Project Manager. I live close enough to my current workplace that I can occasionally get over to my kid’s school event or pop home for lunch without even stepping out for a full hour. I’ve been able to coach for my son, tag my wife out when she needs me home for something at night, etc. While I still put in some decent hours and have some early/late night overseas calls occasionally, it’s nothing like earlier in my career when working long hours not only the norm, but expected, to the tune of 60-90 per week. You can never tell just from a cursory interview what kind of culture or expectations come with the new role, but in order to learn an entirely new culture, new systems, take on more responsibilities, travel quite a bit and possibly inherit a mess from your predecessor, life’s certainly going to change dramatically – and it may not be for the better. Most of the flexibility I enjoy now would be gone.
- Travel - On the topic of work-life balance, this role would certainly entail significant travel. While I do enjoy modest travel and would like to see more of the world, constant travel can take a toll on family life and result in burnout. I don’t travel much at all now and to switch to something like 25-30% travel including international, might take such a toll.
- Risk - The company under consideration was a mediocre company in my assessment. Not as large or prestigious as my current company. Now, I’ve had plenty of colleagues leave and go to smaller, lesser-known companies for the money. And, in most cases, they say they’re glad they did it and they’re making a heck of a lot more money than I am. In a couple other cases, they’ve actually been laid off or left on their own because it wasn’t what they thought. You never know what’s going to happen, but you’ve got to ask yourself whether it’s worth the risk of going to a company you don’t necessarily aspire to work for just for a pay increase.
- Your Current Salary is What??? – Here’s the kicker in salary negotiations. I’d been through this before when considering a move. A headhunter throws out a large number and a great-sounding title to get you in the door. After going through the process, the outcome might be something like this (pure salary example here):
Current Role is say, Manager, Salary + Bonus = 100K
Advertised Role is say, Director; Salary + Bonus = 190K
Here’s what happens when the recruiter or the company HR rep finds out what you’re currently making (never tell them up front so they don’t lowball you, but eventually you’ll need to give them an honest reply once accepting an offer since they’ll likely ask to see prior pay stubs, etc.):
“Oh, we couldn’t actually increase your compensation by that much. That’s just not doable – you’re talking about a 90% increase which obviously isn’t realistic. We could offer you 150K total which is still well above what you’re making now”
Here’s a better one:
“OK, they loved you. The company wants to make you an offer. However, they were looking for someone with just a bit more experience for the Director position. However, they’re willing to make you an offer for a Senior Manager position. The pay is still very high at 150K”
Well, in each of these cases, that wasn’t what you actually signed up for, right? The only reason you even considered it was because the 190K is one of those gamechangers. The 150K may not be. They got you in the door for the higher paying Director role and they’re trying to pick you up for a more modest increase. OK, so 50K isn’t modest at all. But in this example, it’s just not what you signed up for. And, considering you might have to move, incur higher cost of living expenses, etc., in the end, you’re barely achieving a raise on a normalized basis.
In reading some of my considerations above, you might say, “Well, you’ve already made up your mind and you wouldn’t leave under ANY conditions”. That’s not necessarily the case. Everyone’s got their price, right? Realistically, perhaps if I didn’t have to move or could work from home, if the travel weren’t so substantial, if the company were on par with mine…perhaps these factors would sway me to consider leaving for substantially less actually. However, in this case, when factoring in the mortgage difference alone, higher taxes and longer commute costs and other intangibles, that 90% increase turned into something on the order of 1/3 of that. Seriously; with the tax bite and headaches, is altering our lives that substantially worth an extra increase to that degree? I’m not leaving for a 30% increase.
I’m interested in where you’re at on these situations.
What’s your Price?
What other Factors Drive Your Decision?
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