Radhika has just got an exciting job offer from a leading MNC in India. She has been looking for a change for quite some time now and this opportunity appears to be very good in terms of her job profile, remuneration, work hours, commute, etc. However, her father asks her to proceed with caution and make an informed decision rather than jump onto an opportunity that seems the right one on the surface. Here are a few points he has asked her to consider before she makes her decision.
Consideration of Salary and CTC
The most common reason that people change jobs is for a higher salary. However, it is also important that you like your new job. Therefore, Radhika should consider non-monetary factors like her current job profile vis-a-vis the new one. Her job profile should ideally provide an opportunity for self-development as well as positive contribution to the organisation. This factor becomes important when the company is downsizing and the job market is bad. If the quality of work you do is good then your chances of a layoff is slimmer and the scope for a new job is also brighter in case you want to make a shift.
Factors like scope to grow within the organisation, work environment, appraisal process, reputation of the company and its financial condition, job stability, opportunity to work abroad etc should also be taken in consideration.
Computation of CTC or cost-to-company is not standardised. Different companies have different methods of calculating CTC. The term essentially means the cost a company has to incur for the employee. It includes salary as well as perks paid to the employee.
However, some companies stretch also include costs like the cost of square feet area of the cube where the employee sits and the cost of furniture and fixtures provided to him to work at the office. Therefore, Radhika should take a detailed look at the CTC compensation package. She should compare her ‘in-hand’ salary rather than CTC.
While comparing her salary, Radhika should consider the bonus amounts paid by the previous employer. Further, her annual appraisal is also just around the corner. Hence she should use the ‘expected increased salary’ figure for comparison with the new offer.
Further, she is not interested in some of the benefits the new company offers like home loan, car loan, etc. So she should negotiate these perks for a higher cash amount.
Radhika’s father advises her to compare the insurance coverage for both companies. A good extensive insurance coverage cannot be compromised.
Analyse the market situation
Radhika should understand her market worth. There are several job sites that will give her the current compensation packages offered in the industry for her skill sets and work experience. She could also get this information from recruiters. So she should compare the new job offer with the industry average.
Even a very high salary as compared to the market rate should ring warning bells. In the long run, it may pose a hiccup. Salary should be commensurate with experience and education. If Radhika’s salary is very high as compared to market trend, it will stagnate her in one job and stump her growth. She may not find another company to pay her that high salary for a lower experience than market requirements.
Form 16 and PF transfer
Her father reminded her to make a clean exit from her past employer. Parting on a good note after completing all pending responsibilities and settling all dues is necessary. One may need a reference from the previous employer at any time in the future.
Getting a ‘No Dues Certificate’, experience letter, salary slips and relieving letter are important. She should also transfer her PF balance to new employer. At the end of the financial year, she must also collect her Form 16.
Radhika also has ESOPs with her previous company. She will have to find out how many rights have vested and then cash them.
(The writer is CEO of bankbazaar.com)