How to Evaluate a Job Offer

After a long and strenuous job search, you’ve finally received an offer. While your first impulse may be to accept the job immediately, you must decide if this job is really the perfect fit for you. 

Although you know the basics of the job you applied for and interviewed for, evaluating the job details is more important at this step than ever. How should you assess the salary and other perks? Which available information should you rely on? Should you try to get a better deal? And what’s the best way to decline an offer if it’s not the right job for you?

For example, after re-reading the offer letter, you may notice that, although the salary is satisfactory, the company's pension contributions are lower than you first thought. Or, you may note that you have to travel six months out of the year. 

“The number one misstep I see clients take is the failure to step back, take a breath, and meaningfully assess a job offer,” Karen Elizaga, executive coach and author of Find Your Sweet Spot to Glassdoor, said in a June 2021 blog post. “They are almost inclined to jump immediately at an offer.”

Research Your Prospective Employer

Before your interview, you may have taken a peek at the employer you could be working for soon. But once you receive the offer in real-time, dive deeper into this research and uncover if this company suits you and your needs.

Social media is an excellent source of information if you want to assess public opinion of the organization. Read comments about the company on social networking sites or check out any recent news stories about it. 

You could also talk to someone who already works at the company and gather as much information as possible about the organization's people, reputation, values, working environment, culture, and overall management style. 

Look at the company's most recent annual report or its quarterly SEC filing. This filing can tell you a vast amount of information about the company’s activities – from current projects and profiles of its directors to corporate values and financial accounts. 

And pay particular attention to revenue and profitability to gauge whether the company is under any financial pressure or if layoffs may be approaching.

Assess the Salary

Even if the job’s annual salary offer is enough to live on, you must figure out if it’s worth your knowledge and skills and if it’s in line with the local market. 

Databases and job search websites like Glassdoor, Indeed, Ladders, and Salary.com are good starting points. But you can also talk to recruiters, headhunters, and others in the industry.

Overall, you must assess the total package's contribution to your personal and financial needs. Sometimes, a job that looks like it’s paying less at first glance can provide more financial security than a job with a higher salary.

But, if you see fit to talk about increasing the salary before accepting the job, talk to the hiring manager. 

When an employer extends a job offer to you, he has essentially “fallen in love with you,” John Lees, UK-based career strategist and author of The Success Code, told Harvard Business Review. “He has psychologically committed to you; it is a critical moment,” Lees said. “You have more leverage to shape your job description and improve your salary and benefits package right after making an offer than you do in your first two years of employment.”

Look at the Benefits and Perks

It’s easy to fixate on a job’s offered salary because you need money to live. But you must also carefully evaluate the benefits offered, as they have a monetary value worth thousands of dollars that can make a lower-than-expected salary worth accepting.

First, look for 401(k)s with matching contributions. Your employer might offer a 401(k) retirement savings plan and even offer to match your contributions. Generally, this percentage is 50% or sometimes even 100%, typically capped at about 4.3% of your pay. 

Next, ensure that your employer will cover your healthcare costs. Unfortunately, your employer isn’t obligated to provide adequate healthcare insurance. Plans and options can get complicated, but one thing you can focus on is the difference in the percentage of what you pay compared to what your employer pays.

Employees generally cover about 81% of the cost of healthcare coverage, with the average deductible for large employers’ most popular plans being around $1,500 for in-network care. 

Additionally, see if the health plan offers a health savings account (HSA) or a flexible spending account (FSA), as they can save you up to a couple of thousand dollars on taxes when paying for healthcare expenses.

Lastly, understand how bonuses work. Bonuses come in two forms: discretionary and guaranteed. As the name implies, discretionary bonuses are contingent on some record of achievement (commission, quotas) or are non-recurring (like a hiring bonus). If an employer bases a bonus on achievement, ensure that the parameters are clear and achievable.

Other benefits worth looking into before accepting a job offer are vacation and sickness allowance, stock options, tuition reimbursement, incentives, pension, profit sharing, and benefits like gym memberships, daycare, travel costs, etc. 

Travel Time

When evaluating a job offer, your commute is one of the most significant expenses to consider. Will your travel costs increase or decrease? And does it make sense to adopt a longer commute to work?

If the position isn't flexible, your new job might require you to move to a different area or state. If this is the case, you'll need to take into account relocation costs, changes to your property and taxes, and changes to your insurance rates. 

When faced with a decision to accept a job offer with a lengthy commute, the first thing to consider is the method of transportation. Planes, trains, and automobiles will get you from point A to point B, but some are less stressful and expensive than others. 

Sometimes, a 90-minute car ride in stop-and-go traffic isn’t as enticing as a comfy train seat for an equal amount of time. The number of connections, the amount of walking, and safe and comfortable public transportation options could tip the scales in favor of a long commute to the office.

And if the company, career, or position is just what you’re looking for and impossible to land in a closer locale, compromising on a longer commute could benefit your long-term career prospects.  

Ultimately, the attractiveness of the job is weighed against the value of your time and other resources that go into a lengthy commute, which will help you decide whether to accept the offer.