When it comes to changing jobs, millennials outpace their elders. More than 21 percent of millennials have changed jobs in the past year, according to a 2016 Gallup report. In addition, up to 60 percent of millennials surveyed are open to considering a new job in the next year.
Millennials consider these potential job moves for a wide range of reasons — from gaining new skills and experience to greater income potential and work-life balance.
Regardless of the motivating factors, money remains one common consideration in any job move. It’s not only how much (or little) people are earning, but what it may cost to make the change. For example, are people taking time off to think through the next move? If so, do they have the money saved up in advance? If the new job is actually part of a bigger career change, do they need to consider a potential pay cut to enter a new industry and learn new skills? Or if they’re moving from one market to another, is the increased salary and benefits enough to cover a potentially dramatic jump in living expenses?
These questions and many more come up throughout the transition to a new job. So it’s helpful to think through not only the timing of a future job change, but also the compensation and experience from a personal and professional perspective.
[See: How to Live on $13,000 a Year.]
Consider timing and savings. When considering a career change, it’s important for people to pinpoint the timing that makes the most sense. When workers are hoping to move on from a role that isn’t the right fit, do they know where they are going to move next? If not, it might make financial sense to consider staying on longer and working through short-term strategies to improve their situations. That way, they can take advantage of a big milestone, such as completing a critical project or staying on for an annual bonus, which will help with future career endeavors.
If leaving now emerges as the best next step, but the next role has not yet been identified, then it’s important to figure out how much money is needed to bridge the gap before finding a new job. Knowing that money is not going to be a concern or something that could force the wrong career choice is incredibly powerful. So being mindful of savings and the best ways to set up a future job search for success is a key factor in finding the right job. There’s no magic number that someone should have saved when leaving a job, but setting up an emergency fund is important, usually somewhere between three to six months’ worth of living expenses.
[See: 8 Big Budgeting Blunders — and How to Fix Them.]
Understand total compensation. Income is the primary consideration for many as they consider new jobs. But increasingly, employee compensation is so much more than the daily wage, and all the additional benefits can really add up to a significant financial benefit. In addition to salary and health care, compensation often includes bonuses, stock options, retirement savings plans, child care assistance and workplace benefits such as fitness memberships, dry cleaning and food options.
As people consider the full offer from a prospective employer, they should consider the complete package. The salary at Company A may be more attractive, but the 401(k) match and health care benefits of Company B may offer a greater overall value, particularly over time.
Additionally, it’s valuable to consider the market for the job, particularly if there’s a dramatic change in living expenses, as well as the timing of the job offer. If someone is leaving a few months before bonuses are paid, it may make sense to ask the new employer to include a signing bonus to cover the likely bonus earned to date as an incentive to make the move now. Otherwise, the employee may be leaving money on the table, which is never a good idea.
[See: 12 Habits of Phenomenally Frugal Families.]
Consider the experience. Increasingly, millennials are prioritizing experiences. Many would suggest that this makes them one of the least engaged members of the workforce today. But arguably it makes them the opposite, as they are striving to infuse their work lives with greater meaning, combining their passions with the way they make money. So, the ultimate consideration in any career move may not be financial or professional, but rather how it aligns with overall life goals. Does the job provide opportunities for travel, flexibility to spend time with family or the opportunity to dress more casually?
These considerations are becoming increasingly important and financially impactful. After all, employees who are working in roles that constantly take them away from what is otherwise important may find themselves doubling down on expenses in other areas, including expensive daily lattes or time with a career coach.
As with all important life decisions, the ideal-world scenario is rarely an option. Considering future career moves is no different. But being mindful of the reasons it makes financial sense to transition to a new role will ultimately lead to better, more prosperous outcomes.
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Consider These Financial Factors Before Making a Job Change originally appeared on usnews.com
