Last Updated on February 7, 2022 by Rat Race Running
There is a perception that a higher salary will automatically lessen your financial stress. Though this may help, however, as long as you don’t know how to properly handle your finances, chances are those stress will continue to linger.
For both fresh grads and seasoned employees, having a higher salary is one of the “goals.”
But what is your definition of a “higher salary?”
Does a higher salary mean double or triple your current salary? Or a six-figure monthly income?
This is one misconception of employees when they enter the workforce – attributing a higher salary to a better lifestyle without considering some aspects.
Let’s say you’re already earning P50,000, but your monthly expense is P60,000. That means that you’re in debt.
Sadly, you will continue to be trapped in the debt cycle until you make a conscious decision to follow a stricter budget and live below your means.
Another scenario is, let’s say that from a P30,000 salary, you were offered with P50,000 salary by another company, which you immediately accepted.
However, the work-induced stress, the constant overtime, and the lesser free time made you feel worse than before. Is the P20K increase worth it?
The last scenario is, let’s say your current salary in the province is P18,000, but your current monthly expenses are P12,000.
You decided to explore a “greener pasture,” so you moved to Metro Manila for a new job. You now earn P30,000, but your cost-of-living expenses are almost P25,000.
Comparing your salary at face value, you can say that it increased, but it decreased if you consider the take-home pay.
So before accepting a position in a new company, these are five considerations that you’ll need to look at:
The first thing you should know about a company before accepting their job offer is their office location.
The location is very crucial because it can determine how you’ll budget your salary.
Say you currently earn P20,000 while living closer to your work. You can easily reach it by walking or cycling, so you don’t need to include a transportation allowance in your monthly budget.
You can also cook your own food since you don’t spend too much time on the commute.
So the take-home pay that you’re earning will be mostly allocated to your needs and wants. Plus, you are not too stressed because of the commute.
Then you decided that the P20K you’re currently earning is no longer enough to sustain your growing expenses, so you looked for a new job.
A new company then offered you P30,000 per month, a 50% increase from your current salary. However, that new company is located three cities away so you’ll have to commute and leave earlier so you’ll not get stuck in traffic.
You also needed to buy your food since you don’t have enough time to cook, else you’ll be late.
Though you can always have the option of moving closer to your work, that will also be another adjustment to your budget.
So, looking at the face value of your new salary, you’ll see that it is higher. However, if you’ll sum up all the added expenses such as transportation cost, food cost, stress due to commuting, and less time, the 50% increase seemed almost nothing.
2. Job Description
During the initial application process, you can see the job description for the position you’re applying to.
You will also see the duties and responsibilities, who you’re going to report to, and even the employment status, whether you’ll be regular, temporary, or contractual.
There are times when an employee will accept a new position since the salary is higher; unfortunately, they failed to check the job description accompanying that increase.
That may include frequent overtime, broader work scopes, and additional functions beyond the salary increase they offered.
One neglected part when accepting a job offer is the benefits included. Sometimes, companies won’t offer higher salaries because they’ll match it with a lot of benefits.
For instance, some companies will offer a higher salary but will only provide a contractual position, meaning your tenure is not secured.
As a contractual employee, depending on your contract, it may mean that you’ll not receive many (if not all) company benefits. They may exclude paid time-offs (leaves), performance bonuses, stock options, de minimis, and healthcare packages.
Looking at the employment impact that the pandemic caused. Contractual employees were the first to be let go by their companies since they don’t have tenure.
4. Company Policies
If you currently have a side business, you should check if the new company you’re applying for allows part-time jobs (even on your off-hours).
You may also check the policy regarding clothing. When I was starting out in the corporate world, my company has a business attire policy from Monday to Thursday and smart casual every Friday.
That specific clothing policy meant that you will need to spend for at least four long sleeves, pairs of pants, and formal shoes.
Another critical policy to check is if your new company offers flexible time options, overtime, and shifting schedules. Or do they put you in a bond agreement that prohibits you from resigning within a certain period?
Though it will probably be discussed during the employee orientation, it will be better to ask as early as possible.
Because these changes can cause a cultural shift on your part, which I believe is more important than just the added salary.
5. Company Culture
Every company has its own set of company culture, which can be a deal-breaker for employees, especially if they came from a previous company with excellent company culture.
For example, in your previous company, you are enjoying Friday Hangouts, Free Pizza in the Pantry, or just being “fun.” Then at your next company, you found out that they are more stiff and serious, too focused on work, or generally not as “fun.”
So, even though you are earning a higher salary, it won’t be long before you get bored or miss your previous employer.
The company culture should also reflect your values. So if you value integrity and honesty, you will think twice before accepting any job offers from organizations with compromised reputations.
Before accepting the job offer, it is important to consult other people first. Check also the company website and the Internet forums for reviews. You can again ask questions to HR regarding your concerns.
I can confidently say that a higher salary is not all there is when considering a new job offer. As I previously mentioned in my other posts, when I decided to leave my old corporate job to shift to the academe, my salary was almost cut in half.
However, I already considered the lower cost of living in the province, so I just had to recalibrate my budget to fit it to the changes in my expenses.
Finally, though the salary is an important consideration when applying for a job, it is not all there is. The five that I mentioned are some of the things that I considered first before making the jump.
Weigh your pros and cons. What are the things that are on the top of your priority checklist when applying for a job? What are your deal-makers and deal-breakers?
Only after carefully thinking them through should you consider passing that resignation letter.
If you want to get the latest posts from Rat Race Running straight to your inbox, please enter your email address to subscribe! Thank you and have a great day!