Compensation is about more than salary and bonus. When considering a new role, think about what you hope to gain from the experience, and what the role will require. Some firms pay well above their competitors because they will expect more of your time. You may face long hours or need to work over weekends. Others may offer lower compensation but provide opportunities to build new skills with potential for growth and promotions. To decide if a compensation package is right for you, it’s important to know more than the market rate for your work—you need to define goals for your new job.
Speaking with trusted friends and recruiters is a critical first step in evaluating an offer. What is the typical salary for this position? What about bonus, carry, equity, or other financial incentives? On what timeline do these usually pay out at other firms?
It is important to understand the compensation philosophy of any firm you are considering. Does the organization emphasize sharing wealth? Does it believe that senior people take the risk and distribute major windfalls accordingly? How will they increase compensation over time? Do they offer lower cash compensation coming in the door but increase it to reflect how you adapt and contribute? An offer that seems low may reflect a compensation philosophy that will allow you to earn more money over time. An offer that features a high salary may signal that the organization shares strong returns with a limited group of more senior people.
It is also critical to consider the opportunities for growth offered by a new role. At some firms, you will be on your own to figure out how everything works and create your own success. Other roles can offer the opportunity to take courses, sit in in meetings and learn by osmosis, and have increasing client access. When weighing the numbers in an offer, consider how the role can help achieve your long term growth and earnings goals.
Unique growth opportunities only matter if the financial compensation is within the range of what is normal. If an offer is especially low, it is important to stop and consider why that might be the case. Is this a startup? If so, salaries can be lower than with a more established firm (but there should be some monetary, equity or similar longer term reward for the risk and lower compensation). If not, why is there a lower offer? Firms that are worth your time will offer fair compensation alongside whatever other opportunities to gain experience they might present to you.
Collaborating with a recruiter can be enormously helpful in evaluating the quality of an offer, understanding the compensation philosophy of an organization, and considering the long term opportunities that a role will open for you. If you are going through a process independently, be sure to weigh more than just the numbers as you consider whether a compensation package is right for you.
