BOSTON--(BUSINESS WIRE)--It’s a predicament every working professional faces when receiving a job offer and considering a career move: should I stay or should I go? According to Fidelity Investments®’ Evaluate a Job Offer Study, many Millennials (born 1981-1991) are eager to make a move, with 41 percent expecting to start a new job in the next two years. Even with 86 percent of Millennial professionals currently happy at work, nearly half (49 percent) are either actively looking, or open to a new opportunity.
While those considering a career change often focus on salary and bonus as key decision drivers when weighing a move, there are many others factors to consider – some financial and some far more difficult to quantify. Interestingly, when asked how much of a pay cut they would be willing to take for an improved “quality of work life” (such as career development, purposeful work, work/life balance, company culture), Millennials report they are willing to take, on average, a $7,600 pay cut. Furthermore, when asked which is more important when evaluating an offer – financial benefits or improved quality of work life – 58 percent choose the latter.
“Clearly, many young professionals are thinking about more than money and are willing to sacrifice a portion of their salary in exchange for a career move that more closely aligns with their values or passions or improves their work/life balance,” said Kristen Robinson, senior vice president, Women & Young Investors, Fidelity Investments. “However, achieving better quality of life and meaningful work doesn’t have to come at the expense of one’s bottom line. Getting educated about the total compensation and benefits package of an offer can enable job seekers to evaluate the potential trade-offs between two jobs and make an informed decision that could give them the best of both worlds.”
Expanding the Definition of ‘Total Financial Compensation’
While
salary is top of mind when evaluating the total compensation of a job
offer, there are other financial considerations that should be
contemplated. When thinking about the total financial compensation of an
offer, only 39 percent of Millennials include retirement benefits; just
28 percent contemplate health/medical insurance; 27 percent consider
paid time off; and a mere 4 percent take into account stock options and
profit sharing. The good news: once a job is secured, 81 percent with
access to a retirement savings plan, such as a 401(k) or 403(b), enroll
and take advantage of the retirement savings benefit.
“When evaluating the financial compensation of an offer, beyond salary, factors that should be considered include any employer contribution to a retirement savings plan, insurance options and premiums, and cost of living if the new job requires relocating,” added Robinson. “Fidelity’s job offer calculator helps you do the math – providing a comparison of the total financial picture between your current job and the one being offered. With this data to negotiate a stronger financial package on hand, we hope professionals can then focus on factors that can’t be quantified as easily, such as how their career and quality of life may change, and make a more informed decision.”
Few Ask Potential Employers to ‘Show Me the Money’
Once a
job offer comes in, few professionals are actually taking a seat at the
negotiation table. In fact, nearly six in 10 (59 percent) Millennials
accepted their current position without negotiation, falling in line
with older generations who are just as likely to say yes to the first
offer. Professionals across generations may have missed an opportunity
to enhance their financial standing – of those Millennials who
negotiated their last offer (41 percent), a resounding 87 percent were
at least partially successful. Of course, a negotiation should be a
result of a thoughtful proposal that demonstrates the candidate’s value.
For help learning about the art of negotiating of a salary, or weighing the financial ramifications of accepting a new job – visit Fidelity’s MyMoney, an interactive personal finance site developed with a younger generation in mind. The “How to evaluate a job offer” article outlines important financial factors to consider, and Fidelity’s new Job Offer Calculator compares the total financial compensation of two jobs, illustrating how much more (or less) a professional could afford if they accepted the new position.
You’re Hired! Look Before You Leap
Professionals who have
completed their evaluation and already accepted an offer have an
important decision to make regarding existing retirement savings.
Fidelity’s “Get
the 411 on that old 401(k)” outlines the pros and cons of these four
options: 1) keep the old 401(k) at previous job, 2) roll the old 401(k)
into an IRA, 3) bring the old 401(k) money into the new employer plan,
4) cash out.
According to the study, 22 percent of Millennials have cashed out a workplace retirement savings plan at some point in their career and another four percent aren’t even sure what they may have done with those plans. While cashing out a retirement plan may seem appealing in the short-term, Fidelity’s analysis shows that a 30-year-old who cashes $16,000 from a retirement savings plan when changing a job could have seen that grow to $81,5001 at retirement if that money was invested in a tax-advantaged account. Read “Your 401(k) Are you crazy to cash out,” to better understand the long-term effect cashing out may have on retirement savings.
About the 2016 Fidelity Investments® Evaluate
a Job Offer Study
The 2016 Fidelity Investments Evaluate
a Job Offer Study was an online survey conducted among a sample of
1,500 respondents from an online panel, ages 25-70 who work full-time,
and whose employer offers a defined contribution workplace retirement
savings plan. Invitations to participate in the study were sent
beginning on Thursday, February 18th and data collection continued
through Friday, February 26th by ORC International, an independent
research firm.
About Fidelity Investments
Fidelity’s goal is to make
financial expertise broadly accessible and effective in helping people
live the lives they want. With assets under administration of $5.0
trillion, including managed assets of $2.0 trillion as of January 31,
2016, we focus on meeting the unique needs of a diverse set of
customers: helping more than 25 million people invest their own life
savings, nearly 20,000 businesses manage employee benefit programs, as
well as providing nearly 10,000 advisory firms with investment and
technology solutions to invest their own clients’ money. Privately held
for nearly 70 years, Fidelity employs 45,000 associates who are focused
on the long-term success of our customers. For more information about
Fidelity Investments, visit https://www.fidelity.com/about.
Guidance provided by Fidelity is educational in nature, is not individualized, and is not intended to serve as the primary basis for your investment or tax-planning decisions.
Fidelity Investments and Fidelity are registered service marks of FMR LLC.
Fidelity Brokerage Services LLC, Member NYSE, SIPC
900
Salem Street, Smithfield, RI 02917
756791.1.0
© 2016 FMR LLC. All rights reserved.
1 This hypothetical example assumes a real return of 4.5% annually starting at age 30 through age 93 and systematic withdrawal payments from retirement age 67 through death at age 93. All values are expressed in today’s dollars (i.e., inflation is not included). Balance at retirement age 67 would have been $81,500. The ending values do not reflect taxes or fees; if they did, amounts would be lower. Earnings are subject to taxes when withdrawn. This example is for illustrative purposes only and does not represent the performance of any security. Individuals may earn more or less than this example. Investing on a regular basis does not ensure a profit or guarantee against a loss in a declining market.
