FREE TEMPLATE: Make an Offer Comparison worksheet in Google Sheets.
Congratulations! You’ve been pounding the pavement to find that perfect job, and your hard work has been rewarded with multiple job offers. How exciting! After you’ve toasted to your future over champagne with your squad, it’s time to think very seriously about your next steps.
Which offer do you choose? If the position and the work are relatively similar, you will have to base your decision on the compensation and benefits offered, as well as what you know about the culture of each company. That can be complicated. Let’s break it down.
Gather the information
First and foremost, gather as much information about the company and your offer as you can. So, express your excitement and appreciation for the job offer, and ask for more information. It’s ok to tell the employer you have multiple offers, and you need the information to make an informed decision.
Ask for clarification on anything you are uncertain of, including equity versus salaries, benefits, advancement opportunities, working conditions or location, work-life balance initiatives, and DEI policies.
If there are any elements that you want to negotiate, do that before you turn down any other offers. Don’t assume every element of your job offer is subject to change.
Create a Scorecard
Assemble all of your information into a personal scorecard. We’ve created a template (linked here) to map out compensation, perks, culture, and out of pocket expenses. Make a copy and tailor this to your offers and preferences.
Salary would probably be important to most of us. You can break this category down into specific elements such as base salary, commission, bonuses, and projected salary increases. A job offer is wonderful and exciting. However, your family needs to eat. Can you pay your bills for at least a year on this salary? How certain are the bonuses? Have you negotiated the best they will do?
You may have been offered equity at your new position. Having equity in a company means that you have a stake in the business. The more you help the company grow, the more value your equity will have. This is a very simplistic view of equity. Equity packages can entail all kinds of different elements. We’ll talk in more detail about equity later in this article. For now, leave a placeholder on your scorecard for this perk.
Benefits may include paid time off, sick days, health insurance, life insurance, a 401k, pension plans, and disability insurance. How you rate these elements probably depend on what stage of life you are in. If you are more interested in a comprehensive health care plan that covers your kids than your actual salary, determine if the plan offered covers what your family needs. If you need to build your retirement savings, a strong 401k with a match from the employer should be noted as a plus. Take these priorities into consideration as you score each element in your benefits package.
What is your growth potential at each company? Are there opportunities for you to advance in your career both horizontally and vertically? Can you see yourself growing with this organization? Does the company seem stable from a financial position? Evaluate the long-term possibilities for each offer.
What perks are available to employees? Childcare is a huge incentive for many women. Tuition reimbursement, company cars, mileage reimbursement, corporate accounts for meetings and travel, and memberships to industry associations are all possible perks that offer you the ability to save money and make your life easier.
On the other hand, record any hidden costs a new job may entail. Is the commute longer than your current one and will cost you more in gas and time? Will you have to pay for parking? Will you need a new wardrobe? Will you need to relocate? If any of these hidden costs are significant, record and rate them on your scorecard.
Rate the environment at each position. Did you get a good overview of the work environment for each job? Did you feel more comfortable in one over the other? Did any of the positions offer the opportunity to work from home? Is that a positive or a negative for you? Did you get a sense of what your day-to-day schedule would be? Did you feel at home and comfortable in the workplace?
Culture is hard to define and score for a new job offer, but it can be important. Does the company feel inclusive, open, and interested in work-life balance? Is there a clear mission and set of values? Are there avenues to offer feedback and ask questions to leadership? Think of what is most important to you in your day to day work life.
Last but not least, ask yourself what your gut is telling you. Can you see yourself working in these positions? Are you excited to get started? Did anything about the job make you feel uneasy? Our intuition is usually correct in these situations, and it’s best not to ignore it.
If you’ve been offered equity as part of your compensation package, it’s most likely instead of being offered a larger salary. Startups use this compensation strategy to bring talented employees into the organization and incentivize them to stay while they help the company grow. It can be very lucrative to own a portion of a startup, but please know it is a long-term commitment.
There is a lot to consider when evaluating an equity offer, but your recruiter should be able to help you navigate assigning value to the equity in your offer.
Your equity offer will come in the form of stock options or stock grants. Stock options offer you the ability to buy stocks at a predetermined price. This price must be a fair market value of the company stock at the time the option is granted to you. The options will have a vesting schedule that is based on the time you work for the company. A very common vesting schedule is four-year vesting with a one-year cliff. A one-year cliff indicates that you can’t vest during the first year of employment. That means if you leave the company before you’ve been there a year, you will lose all of your stock options. After a full year, a quarter of your total equity grant will become yours. After this point, the balance of your equity vests to you on either a monthly or quarterly basis. That doesn’t mean you need to purchase the stock, just that it is available to you at the price you were quoted at hiring.
A stock grant is also commonly referred to as restricted stock. A grant means you receive shares outright, usually on a vesting schedule. This is more common for very early-stage startups when the shares are not worth much and therefore less costly to the business to give up. This may sound like a great source of future income, but there are tax implications to consider.
Regardless of the form the stock offer takes, there are specific questions to ask yourself as you review it. First, you need to know how many total shares are outstanding. If you are offering 10,000 shares, how much of the company is that? 10%, 25%, 50%? That’s a critical question and can only be answered by knowing the total number of shares. For example, if 1 million shares make up the company, your 10K would be 10%.
Also, what is the current stock price, and how has it changed over the last year? How does this price compare to the price your stock options will be? How quickly is the company growing? What is the plan for future funding? How many new shares will be offered to acquire that funding?
Finally, ask yourself, how much income can you defer and still pay your bills? Equity offers are not guaranteed or steady income. Don’t get caught up in the excitement of a new concept that may not pay off for years when your mortgage is due at the end of the month. Can you afford to risk it?
This site has a terrific case study that takes you through a decision model for two stock offers. It will help you create one for yourself. Check it out.
Back to the Scorecard
By now, you’ve filled out, prioritized, and rated each item in your job offer package on your scorecard. As you’ve completed this exercise, the answer may have become clear to you. If you are still wavering, add up your scores for each offer, weigh the scores based on your priorities, and see where that leaves you. If you are still uncertain, set it aside and sleep on it. Sometimes you need to live with the question for a while.
You’ve Made Your Decision!
Congratulations! You’ve made the best decision for you. Don’t forget to contact the losing company and decline their offer with honesty, grace, and thankfulness. Then, contact your new employer and embark on your brand new life.