|Credit: Salvatore Vuono|
Hidden Cost #1: Parking – Don’t make the mistake of assuming your current parking situation will be the same as your next parking situation if you are planning on leaving your current employer for a $1,000 raise. This is particularly true if you are going from a suburb to a city or a small city to a big city. Parking can be a serious expense, and not all employers are going to pay or reimburse you for it.
Hidden Cost #2: Clothing – There are lots of different wardrobes required for lots of different careers, but if your new job is going to require a substantially different “Monday through Friday collection,” I’d suggest you factor this into your decision. I personally felt this when I went from a business casual environment to somewhere between a business professional and black tie environment. Okay, I haven’t had to wear a tuxedo just yet, but suits, ties, dress shoes, and cuff links don’t grow on trees!
Hidden Cost #3: Vesting – This could be buried in those documents you signed when you first started working for your current employer (saying that you’d read them when you probably didn’t), but it’s worth understanding if any of your benefits are on vesting schedules. Quite frequently, things such as employer 401(k) contributions, pensions, and stock options have vesting schedules. Put simply, a vesting schedule means you only get to keep a certain amount of what you’ve been “given” if you leave before a certain point in time. If you’re miserable or have a great opportunity, then change jobs. On the other hand, if you are hastily plotting the delivery of your resignation letter on a rainy Tuesday, look to see if any of your benefits are on vesting schedules and make sure you don’t leave three days before the 60% of your employer’s 401(k) contributions you get to keep becomes 80%.
Hidden Cost #4: Pension Implications – I really think pensions are headed in the direction of the dinosaurs and dodo birds, so if you are working towards one, just know a lot of other people are jealous. A pension is an unbelievable and usually steady benefit for a retiree, and because they’ve been such a huge benefit, they have cost companies a lot of money over the years. It is not a mystery why they are being phased out. All that just to say that walking away from a pension benefit could be a decision with long-term consequences, so consider your next actions carefully.
Hidden Cost #5: Health Insurance – Health, dental, and vision benefits vary an awful lot from company to company, and you should certainly keep that in mind. A small pay raise can easily become a net loss if the health coverage significantly varies between Job A and Job B. This hidden cost difference can even be exacerbated if your spouse is on your insurance or if your family is growing.
Hidden Cost #6: Cost of Living – Let’s face it, Little Rock, Arkansas, and Los Angeles, California, are not the same place. Humorously enough, the people of Arkansas and California are also probably okay with that! Either way, things don’t cost the same in different places. If you are going to need to get on an airplane to go to your new “office,” you are going to want to really consider the change in cost of living versus the change in your compensation or benefits. The cost of groceries, the cost of gasoline, the state income tax rate, and property taxes can all be big surprises unless you’ve done your homework.
In case my employer is reading today’s post, I should probably go ahead and articulate that I’m not looking to change jobs. Besides, if I was, I’d be thinking about getting out my old trombone, trying to restart my musical theatre career, or becoming a high school U.S. history teacher. Don’t worry, I’d keep 2MuchCents up and running as a hobby!