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Salary Evaluation David McMahon ’69 Associate Director Career Center, Texas A&M University
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Types of Employees Regular Full-time Part-time Contingent Temporaries Contract Workers Consultants Co-ops/Interns
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Compensation Package Get the Offer in Writing Then Evaluate Pay Benefits Intangibles
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Types of Pay Starting Salary Salary Hourly Commission Fee Signing Bonus Payout Schedule Stock Career Salary COLA Increase Merit Increase vs. Merit Bonus Profit Sharing Stock Options
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Benefits Relocation Assistance Insurance – Health, Life, Disability Vacation and Holidays Education Tuition Assistance Expense Account, Company Vehicle Professional Organization Memberships
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Benefits Savings & Retirement Pension Plan 401K Stock Options
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Questions to ask employers about their 401(K) Do you have one? Do you have a pension plan also? Do you contribute (match)? How much? How long you have to work before you can participate? What are the “vesting rights” ? Do you have choices of investments? (Beware company stock only)?
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Rule of 72 – Compounding @ 10% Age Invest Value 23 $5,000 $5,000 30$0 $10,039 37$0 $20,158 44$0 $40,477 51$0 $81,274 58$0 $163,193 65$0 $327,679 A 10% return on investment will double initial investment approximately every 7 years. Compound interest is added to the principle 12 times annually.
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Rule of 72 – Compounding @ 7% Age Invest Value 23 $5,000 $5,000 30$0 $8,150 37$0 $13,284 44$0 $21,654 51$0 $35,295 58$0 $57,531 65$0 $93,775 A 7% return on investment will double initial investment approximately every 10 years. Compound interest is added to the principle 12 times annually.
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Invest Early – Pay Yourself First $35,000 $160,000
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Lifestyle Matters A 45-year-old making $100,000 today plans to retire at age 65. Depending on his lifestyle in retirement, here’s how much he’ll need. % of Pre-retirement Nest egg Income desired necessary at In retirement retirement 60% $1.96 million 80% $2.61 million 100% $3.27 million Assumptions: Life expectancy is 90 years, no pension or Social Security; annual salary increases and inflation average 3%.
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Intangibles Location Industry Outlook Promotion Opportunities Responsibilities/Challenge Travel Life-Work Balance
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Evaluate Two Entry-level Offers Company ACompany B Base Salary $30,000 Base Salary $35,000 Medical 0 Medical (840) Parking 0 Parking (912) 401(K) Match 1,500 401(K) Match 0 (10% contribution, match first 5%) (10% contribution, no match) Perks 2,000 Perks 0 (car, tuition, etc.) Federal Taxes (7,290) Federal Taxes (8,505) (27% of taxable income) (27% of taxable income) State Taxes (2,002) (6% of taxable income) Actual Compensation $26,210 Actual Compensation $22,741
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YOU employer $45K $42K $40K$35K Who’s Salary Range Are We Talking About?
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The Six Secrets of Salary Negotiation Never discuss salary until the end of the interviewing process, when they have definitely said they want you. The purpose of salary negotiation is to uncover the most that an employer is willing to pay to get you. During the salary discussion, try never to be the first one to mention a salary figure. Before you go to the interview, do some careful research on typical salaries for your field and/or that organization. Define a range that the employer has in mind, and then define an inter-related range for yourself. Know how to bring the salary negotiation to a close. Don’t leave it “just hanging”. Source: 2008 What Color is Your Parachute? Chapter 7 (p.115) by Richard N. Bolles
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Points of Negotiation Competing Offers Salary Surveys/Information Strong Relevant Experience (e.g. Co-op) Extra-ordinary Skills (e.g. bilingual, technical, etc.) Unusually high GPR Cost of Living Adjustments Consider a Signing Bonus Supply/Demand
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Salary Information TAMU Salary Survey NACE Salary Survey Professional Associations Cost of Living Index Talk to People!
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Key Link
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Key Links
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Multiple Interviews and Offers Ask 1 st company for decision extension if you need one Reasonable time frame vs. your availability Was Company cooperative/understanding? Inform 2 nd company that you have a decision deadline
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Decision Time!!! Nice problem to have… Sometimes you just have to follow your gut feel…….. Neither one is a bad decision
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Aggie Code of Honor When you sign an employment contract with a firm it is exactly that, a contract. Don’t accept an offer for employment unless you are serious about it and plan to work for them. You should not be looking for other employment once you have signed that contract. It’s OK to ask for a reasonable time extension to consider other jobs. Reneging hurts not only you, but the reputation of all Aggies interviewing now and in the future.
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Questions???
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