Salary Evaluation
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Transcript of Salary Evaluation
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Salary Evaluation
David McMahon ‘69Associate Director
Career Center, Texas A&M University
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Types of Employees Regular
Full-time Part-time
Contingent Temporaries Contract Workers Consultants Co-ops/Interns
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Compensation Package
Pay Benefits Intangibles
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Types of Pay
Starting Salary Salary Hourly Commission Fee Signing Bonus
Career Salary COLA Increase Merit Increase
vs. Merit Bonus Profit Sharing Stock Options
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Benefits
Insurance – Health, Life, Disability Retirement and/or Savings Plans Vacation and Holidays Education Tuition Assistance Expense Account, Company Vehicle Professional Organization Memberships
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Intangibles
Location Industry Outlook Promotion Opportunities Responsibilities/Challenge Travel Life-Work Balance
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Savings & Retirement
Pension Plan 401K (or T.S.A.) Stock Options
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Questions to ask employers about their 401(K)
Do you have one? Do you have a pension plan? Do you contribute (match)? How much? How long you have to work here in order to
participate? What are the “vesting rights” ? Do you have choices of investments? (Beware
company stock only)?
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Power of Compounding (I)
Age Invest Value 23 $5,000 $5,000 30 $0 $10,039 37 $0 $20,158 44 $0 $40,477 51 $0 $81,274 58 $0 $163,193 65 $0 $327,679
A 10% return on investment will double initial investment approximately every 7 years. Compound interest is added to the principle 12 times annually.
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Power of Compounding (II)
Age Invest Value 23 $5,000 $5,000 30 $0 $8,150 37 $0 $13,284 44 $0 $21,654 51 $0 $35,295 58 $0 $57,531 65 $0 $93,775
Values are calculated every 7 years at a 7% return rate. Compound interest is added to the principle 12 times annually.
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Invest Early
$35,000 $160,000
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Lifestyle Matters
A 45-year-old making $100,000 today plans to retire at age 65. Depending on his lifestyle in retirement, here’s how much he’ll need.
% ofPre-retirement Nest eggIncome desired necessary atIn retirement retirement
60% $1.96 million80% $2.61 million100% $3.27 million
Assumptions: Life expectancy is 90 years, no pension or Social Security; annual salary increases and inflation average 3%.
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Evaluate Two Entry-level Offers
Company A Company BBase Salary $30,000 Base Salary $35,000Medical 0 Medical (840)Parking 0 Parking (912)401(K) Match 1,500 401(K) Match 0 (10% contribution, match first 5%) (10% contribution, no match)Perks 2,000 Perks 0 (car, tuition, etc.)Taxes (7,290) Taxes (8,505) (27% of taxable income) (27% of taxable income)
Actual Compensation $26,210 Actual Compensation $24,743
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The Six Secrets of Salary Negotiation
Never discuss salary until the end of the interviewing process, when they have definitely said they want you.
The purpose of salary negotiation is to uncover the most that an employer is willing to pay to get you.
During the salary discussion, try never to be the first one to mention a salary figure.
Before you go to the interview, do some careful research on typical salaries for your field and/or that organization.
Define a range that the employer has in mind, and then define an inter-related range for yourself.
Know how to bring the salary negotiation to a close. Don’t leave it “just hanging”.
Source: 2008 What Color is Your Parachute? Chapter 7 (p.115) by Richard N. Bolles
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Points of Negotiation
Competing Offers Salary Surveys/Information Strong Relevant Experience (e.g. Co-op) Extra-ordinary Skills (e.g. bilingual, technical, etc.) Unusually high GPR Cost of Living Adjustments Consider a Signing Bonus Supply/Demand
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Bachelor’s Degree CandidatesBy Curriculum And Employer
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YOU
employer
$45K$42K$40K$35K
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Points of Negotiation
Competing Offers Salary Surveys/Information Strong Relevant Experience (e.g. Co-op) Extra-ordinary Skills (e.g. bilingual, technical, etc.) Unusually high GPR Cost of Living Adjustments Consider a Signing Bonus Supply/Demand
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Salary Information
TAMU Salary Survey NACE Salary Survey Professional Associations Cost of Living Index Talk to People!
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Questions???