If you thinking changing will make you significantly happier or significantly more money or open more job opportunities, then it is almost always a good idea to make a change," he says. "But if prime reason is to make more money in the short term, it could backfire. —Joseph Terach, CEO of the career services firm Resume Deli
After working for Vanguard for 13 years, Laurie D. Battaglia quit in 2011 and started a new job at a large bank in downtown Phoenix. Three years later, she is still glad she made the switch, even though there were some tradeoffs.
About 2.4 million people quit their jobs in November 2013, according to the U.S. Bureau of Labor Statistics — the most since the recession officially ended. In December the number slipped a little to 2.37 million, but the trend seems to be increasing. More people are leaving their jobs, which some experts, such as new Federal Reserve head Janet Yellen, think indicates a strengthening economy.
Presumably the quitters had, or hoped to have, a new job lined up, but were they making the right choice? In any economy there are things people can do to make better decisions about the costs of changing jobs.
Battaglia, who also has a side business as a certified professional coach, doesn't change jobs willy-nilly: "I don't tend to hop fast from employer to employer," she says.
The reasons to stay at a job, she says, include whom she was working with. One role she had at Vanguard, an investment management company, lasted six years. "The reason I stayed was I had a great boss. There were great people around me and I like the role," she says. "People leave bosses more than they leave companies."
Joseph Terach, CEO of the career services firm Resume Deli, says there are good reasons to leave a job, but that people need to consider the strength of the economy both nationally and the place where a person may move for work.
"If you thinking changing will make you significantly happier or significantly more money or open more job opportunities, then it is almost always a good idea to make a change," he says. "But if prime reason is to make more money in the short term, it could backfire."
Battaglia says it is important to look at the total picture.
"People look at base pay," she says. "And they also look at vacation and health care. But there are a lot of nuances in the way workplaces pay their employees."
These variations can range from programs the company offers, such as 401K matching to the community and economy where the job is located.
One of the differences between working at Vanguard and a large bank is incentive pay, Battaglia said. Vanguard didn't offer much in this regard, but banks offer money for hitting various goals and have bonuses: "Incentive pay even shifts from job to job within a company," Battaglia says.
J. Todd Rhoad, managing director at Bt Consulting in Atlanta, said that pay raises are also important to consider.
"Would you stay in a job that provides no raises in five years?" he asks. "These are hard questions to investigate but can be accomplished by networking with existing employees."
Terach says people should compare the 401k program at his or her current job versus the new one. What matching do they do for contributions? Is there a vesting period for that matching? It could be years before the company's contributions are 100 percent yours, he says. It could be years before they make any contributions.
He also says to look at stock options as well.
"People get all excited about salary," he says. "They forget about the total compensation package."
Timing can be critical in other ways as well. When do companies give out yearly bonuses, for example. Is a raise coming up? Leaving right before these anticipated yearly events may skew the calculations on whether taking a new job is worth it.
"If you leave and don't make significantly more money," he says, "you may find, once you make that move, that you took a larger financial loss than you anticipated."
Understanding the health insurance options at a new company compared to a current company is also important, Battaglia says.
"Ask a lot of questions," she says. "Go in and do what you can to understand what the plans are."
Vacations can also be an important part of the new job package. When Battaglia shifted jobs she lost a lot of vacation time — something that is important to her because the rest of her family is on the East Coast. Her new employers weren't willing to negotiate vacation time, so it was a big tradeoff, particularly because it also limited her time to work on her side coaching job.
There are also outside costs associated with moving to a new job, whether the job is across town or across the country.
Battaglia's move from the suburbs of Scottsdale to the city of Phoenix impacted her transportation costs. Commuting, parking and public transportation can be expensive depending on where the job is located.
Roy Cohen, a career coach in New York City and the author of "The Wall Street Professional's Survival Guide," says that if a person relocates long distance, it is important to get reimbursement for costs related to the move if possible.
"Make sure that you are reimbursed should your job involve regular travel or travel prior to the official relocation back and forth, for example, if family is delayed due to school schedules or a spouse's commitments," he said.
He also says that if the job requires a lot of car travel to try to get a leased car from the company.
Hard and soft costs
Where a person works can also affect take-home pay, if there are extra taxes. Battaglia, for example, says some cities will charge wage taxes to people who work in city limits.
Simple things like having inexpensive restaurants near the job can also make a difference: "I don't like to pack lunch," Battaglia says, "so that can get pricy."
When Battaglia worked at Vanguard, the dress policy was strict. Her new employer doesn't require the dress-for-success level of clothing. Although the clothing required for her new job was less formal, and therefore less expensive, she still had to buy new clothes.
"People need to think what it will cost to take a different job," she says.
This can mean things like cellphones. Does the company offer any subsidy? Battaglia's old company offered about 18 percent. Her current company offers 27 percent.
Cohen encourages asking if a new company offers flex time, housing subsidies (if one is relocating) and general cost of living increases in the new location.
He also says to ask if they offer guaranteed severance pay. This is good insurance if people leave stable jobs only to have their new job eliminated: "The reality is that a severance package costs the company zero dollars if it is not exercised," he says.
Looking to quit
Terach with Resume Deli says people considering switching jobs should look for the new job before quitting.
"It is to your advantage to have a job while looking for a new one," he says. "If you quit and don't find a job right away, employers will think 'This guy can't get a job.'"
This also helps get a better salary with a new employer, he said.
In those negotiations, however, he says to not bring up all compensation questions right away.
"The strategy is to get an employer to be salivating over you before the conversation about salary and other elements of total compensation," he says. "It is just a negotiation tactic. Get them excited first."
"When you are desperate, you can't negotiate the same way," she says. "You are in the best situation to negotiate when you can walk away."