advice for evaluating offers?
February 1, 2012 6:49 AM Subscribe
I am currently looking for a job and may (I hope) soon need to evaluate offers of employment. I know very little about healthcare, retirement, non-compete clauses, equity, intellectual property, and all the other fun topics that offer letters tend to mention. I can google "401(k) matching" as well as the next guy, but Google isn't going to tell me that this topic exists to be researched, or what the norms are for my industry/seniority/region. Where in Chicago can I find the potentially very specific advice (dare I call it hand-holding) I need to get through this without losing my pants? Appointment with university career services? Read a book/website? Retain a lawyer? Specific recommendations would be appreciated.
I'm going to be a programmer fresh out of college, working in a reasonably large city (Chicago, New York, maybe Bay Area?) in either algorithmic/high-frequency trading or internet no-longer-a-startup. I would prefer not to pay, but I could spend a few hundred if it would be worth that.
I'm going to be a programmer fresh out of college, working in a reasonably large city (Chicago, New York, maybe Bay Area?) in either algorithmic/high-frequency trading or internet no-longer-a-startup. I would prefer not to pay, but I could spend a few hundred if it would be worth that.
Relax. You're over-thinking this.
While you should have some idea of what you want in terms of compensation and benefits going in to an interview, a company benefits package will be offered on a take-it-or-leave-it basis. That means that you don't need to make a detailed inquiry until you are deciding between two offers that you are equally indifferent towards.
Non-competes are something that you should consider, however, and there is a lot of variance state-to-state on these. If they ask you to sign one, make sure you understand what it means and maybe even retain a lawyer to advise you on it. (In some cases, they will be badly drafted -- such as having an over-long duration of time -- and some states will call those unenforceable. Other states will substitute a reasonable amount of time. Your lawyer will tell you more.)
There's a lot of advice out there about equity. When you get an offer, the terms of the offer will tell you what you should look up and what you are dealing with. A lawyer can help you with this, too.
Always keep in mind that equity is not money in the bank: if you're living on credit until the IPO or the options vest or whatever, you're really just living on credit.
posted by gauche at 7:12 AM on February 1, 2012 [1 favorite]
While you should have some idea of what you want in terms of compensation and benefits going in to an interview, a company benefits package will be offered on a take-it-or-leave-it basis. That means that you don't need to make a detailed inquiry until you are deciding between two offers that you are equally indifferent towards.
Non-competes are something that you should consider, however, and there is a lot of variance state-to-state on these. If they ask you to sign one, make sure you understand what it means and maybe even retain a lawyer to advise you on it. (In some cases, they will be badly drafted -- such as having an over-long duration of time -- and some states will call those unenforceable. Other states will substitute a reasonable amount of time. Your lawyer will tell you more.)
There's a lot of advice out there about equity. When you get an offer, the terms of the offer will tell you what you should look up and what you are dealing with. A lawyer can help you with this, too.
Always keep in mind that equity is not money in the bank: if you're living on credit until the IPO or the options vest or whatever, you're really just living on credit.
posted by gauche at 7:12 AM on February 1, 2012 [1 favorite]
If it's an established company, most employment-at-will is fairly boilerplate. As gauche says, you're overthinking it.
The basics are going to be;
salary and bonus (i.e. 'total compensation'). The main question is if the bonus is gauranteed, objective-reaching driven (so you get x% based on certain milestones/objectives) or simply 'there may be a bonus, but it's subjective.'
equity - only in a small firm or start up, or if you're coming in at a fairly senior level. I don't think this situation will apply to you.
RSU's (restricted stock units) - these may be used as a component of the bonus structure. Basically, you get a certain grant, say 100 RSU's. Over 4 years (or whatever term they have), they'll 'vest. So after 1 year, you get 25 shares, free and clear, like you bought the stock (of course, tax issues around this usually mean the company will auto-sell half of that to pay for taxes for you)
401(k) - basically, make sure they have a 401(k) plan. And what their matching policy is. Many companies will match, say half of what you put in up to 3%. (so if you contribute 3% of your salary, they'll bump in 1.5%. any companies don't match, but some match full to 7% (you put in 7%, they put in 7%)
Healthcare - you want HMO or PPO options with vision and dental. Usually fairly standard options for established companies. As a single person, they typically don't kill you on what you need to contribute to the payments. And they'll have a booklet for you to choose your options.
IP - you're not going to be able to profit individually off anything you create there for them, or using their resources. If you have a brilliant idea for a start up or product, resign before you start working on it.
first coming into a company, salary is the one thing you can control to a degree. find out what similar people with your skills make, and industry averages. Negotiate (without crossing the line into being too difficult where they just say 'forget it'). It's their first offer. Take a knowledgeable percentage and counter-offer. You'll either get it or split the difference in most cases.
But - also, if your school offers free career counseling.. use it.
posted by rich at 7:24 AM on February 1, 2012 [1 favorite]
The basics are going to be;
salary and bonus (i.e. 'total compensation'). The main question is if the bonus is gauranteed, objective-reaching driven (so you get x% based on certain milestones/objectives) or simply 'there may be a bonus, but it's subjective.'
equity - only in a small firm or start up, or if you're coming in at a fairly senior level. I don't think this situation will apply to you.
RSU's (restricted stock units) - these may be used as a component of the bonus structure. Basically, you get a certain grant, say 100 RSU's. Over 4 years (or whatever term they have), they'll 'vest. So after 1 year, you get 25 shares, free and clear, like you bought the stock (of course, tax issues around this usually mean the company will auto-sell half of that to pay for taxes for you)
401(k) - basically, make sure they have a 401(k) plan. And what their matching policy is. Many companies will match, say half of what you put in up to 3%. (so if you contribute 3% of your salary, they'll bump in 1.5%. any companies don't match, but some match full to 7% (you put in 7%, they put in 7%)
Healthcare - you want HMO or PPO options with vision and dental. Usually fairly standard options for established companies. As a single person, they typically don't kill you on what you need to contribute to the payments. And they'll have a booklet for you to choose your options.
IP - you're not going to be able to profit individually off anything you create there for them, or using their resources. If you have a brilliant idea for a start up or product, resign before you start working on it.
first coming into a company, salary is the one thing you can control to a degree. find out what similar people with your skills make, and industry averages. Negotiate (without crossing the line into being too difficult where they just say 'forget it'). It's their first offer. Take a knowledgeable percentage and counter-offer. You'll either get it or split the difference in most cases.
But - also, if your school offers free career counseling.. use it.
posted by rich at 7:24 AM on February 1, 2012 [1 favorite]
Ask your career office, and then ask your alumni office if you can connect with alumni in your field and region who are willing to advise a newbie.
But broadly speaking, the only place you are (infinitessimally) likely to lose your pants are in a: non-competes and intellectual property, b: stock offerings that go differently than you expected. And non-competes are rarely enforced if you're below VP / superstar level and working for a non-insane company. If you have to ask about them, consider yourself a non-superstar.
There are sites that can give you salary ranges for your field and seniority, but I don't have the links. I suspect someone else in this thread will come through. Your career office may help. And your alumni contacts should be able to also.
posted by zippy at 7:29 AM on February 1, 2012
But broadly speaking, the only place you are (infinitessimally) likely to lose your pants are in a: non-competes and intellectual property, b: stock offerings that go differently than you expected. And non-competes are rarely enforced if you're below VP / superstar level and working for a non-insane company. If you have to ask about them, consider yourself a non-superstar.
There are sites that can give you salary ranges for your field and seniority, but I don't have the links. I suspect someone else in this thread will come through. Your career office may help. And your alumni contacts should be able to also.
posted by zippy at 7:29 AM on February 1, 2012
One thing to keep in mind is that things like health plans, retirement plans, equity compensation, can generally be changed by your employer without you being able to do anything about it. For example, at the large corporation I work for, in the last five years or so they have changed health care providers multiple times, phased out pensions and got rid of a employee stock purchase program, changed the structure of their RSU grants, temporarily stopped matching 401k contributions (they have since re-instated the matching), and temporarily froze salaries, among other benefits changes. So while it makes sense to take benefits into account when evaluating job offers, don't count on those being there for the long term.
posted by burnmp3s at 8:12 AM on February 1, 2012
posted by burnmp3s at 8:12 AM on February 1, 2012
Paid Time Off
Some companies will give you sick days for unplanned out-of-office time and vacation days for planned out-of-office time. Some companies will just give you PTO days that you can use for any purpose.
Some companies only allow you to carry a certain amount of earned PTO into a new year. So if you've earned X PTO hours in Year 1, and you can only carry Y PTO hours into a new year, and X>Y, your PTO balance in Year 2 will be Y. For some companies, Y=0. These companies are thieves. Be careful of this.
Some companies will pay out unused PTO as cash when your resign. Other's don't. I believe that state law is a big driver in this.
Some companies treat near-holidays like day-after-Thanksgiving and New Year's Eve as holidays, which is a nice perk.
Annual Review
Does the company do annual reviews? If so, how?
Some companies use an annual review process that forces managers to grade their people on a curve. I wasn't interested in participating in this, I don't want to work in a place that penalizes me for cooperating. You may feel differently, though.
Signing Bonus / Move Benefits
These are tasty, especially if you're just out of school. But be wary of them. Likely you'll need to pay back some or all of it if you don't serve a long enough stretch with the company. Also, if you accept a lower salary in exchange for a signing bonus in Year 1, in Year 2 you'll start paying for that.
Companies use signing bonuses to combat short-term attrition and to get people in the door at lower salaries. If a company wants to give you a bunch of money up front, definitely find out what strings are attached!
Working Conditions
For me, the most important thing about a job offer isn't found anywhere on the offer sheet.
You mention "no-longer-a-startup" type companies. I've worked for a couple successful post-startups and would be wary of any more. In my experience grown-up startups generally retain the frenetic pace of work that made the startup successful but don't offer the chances at wealth that could justify that level of effort.
In interviews, I ask directly about working hours. What time do people start and what time do people finish? What was the last time my interviewer took more than a couple consecutive vacation days?
I ask all my interviewers how much they like their work, and if they could change anything about their job, what would they change? I ask my boss-to-be what they like about their boss -- bad relationships here will trickle down. I ask the interviewer why they joined the company, and why they continue to stay there.
I always ask about seniority and turnover on the hiring team. If a team has suffered a lot of recent attrition, or if the most senior employee only has a tenure of a few months, then that's a huge red flag that the team is not well-run. Good software people have substantial job mobility in a big town and mass migration is definitely a symptom.
Good luck! There are pitfalls, but I think software can be a great place to work.
posted by Sauce Trough at 10:50 AM on February 1, 2012
Some companies will give you sick days for unplanned out-of-office time and vacation days for planned out-of-office time. Some companies will just give you PTO days that you can use for any purpose.
Some companies only allow you to carry a certain amount of earned PTO into a new year. So if you've earned X PTO hours in Year 1, and you can only carry Y PTO hours into a new year, and X>Y, your PTO balance in Year 2 will be Y. For some companies, Y=0. These companies are thieves. Be careful of this.
Some companies will pay out unused PTO as cash when your resign. Other's don't. I believe that state law is a big driver in this.
Some companies treat near-holidays like day-after-Thanksgiving and New Year's Eve as holidays, which is a nice perk.
Annual Review
Does the company do annual reviews? If so, how?
Some companies use an annual review process that forces managers to grade their people on a curve. I wasn't interested in participating in this, I don't want to work in a place that penalizes me for cooperating. You may feel differently, though.
Signing Bonus / Move Benefits
These are tasty, especially if you're just out of school. But be wary of them. Likely you'll need to pay back some or all of it if you don't serve a long enough stretch with the company. Also, if you accept a lower salary in exchange for a signing bonus in Year 1, in Year 2 you'll start paying for that.
Companies use signing bonuses to combat short-term attrition and to get people in the door at lower salaries. If a company wants to give you a bunch of money up front, definitely find out what strings are attached!
Working Conditions
For me, the most important thing about a job offer isn't found anywhere on the offer sheet.
You mention "no-longer-a-startup" type companies. I've worked for a couple successful post-startups and would be wary of any more. In my experience grown-up startups generally retain the frenetic pace of work that made the startup successful but don't offer the chances at wealth that could justify that level of effort.
In interviews, I ask directly about working hours. What time do people start and what time do people finish? What was the last time my interviewer took more than a couple consecutive vacation days?
I ask all my interviewers how much they like their work, and if they could change anything about their job, what would they change? I ask my boss-to-be what they like about their boss -- bad relationships here will trickle down. I ask the interviewer why they joined the company, and why they continue to stay there.
I always ask about seniority and turnover on the hiring team. If a team has suffered a lot of recent attrition, or if the most senior employee only has a tenure of a few months, then that's a huge red flag that the team is not well-run. Good software people have substantial job mobility in a big town and mass migration is definitely a symptom.
Good luck! There are pitfalls, but I think software can be a great place to work.
posted by Sauce Trough at 10:50 AM on February 1, 2012
This thread is closed to new comments.
Non compete clauses are not enforcable in all states. So whether you consider it seriously or not will depend on the state where the job is.
Equity: there is a huge difference tax-wise between non qualified stock options, incentive stock options, and restricted stock grants. Any company that grants these will likely have a big document to explain to you about what they are. If you have a specific type of equity grant that you think you're getting, you should be able to post about it here and we could tell you more. (For instance, I know many friends who were bitten by ISOs when they exercised options, tried to hold for a year, and had the underlying stock price drop in the intervening year.)
posted by lyra4 at 7:04 AM on February 1, 2012