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Salary Evaluation

Salary Evaluation. David McMahon ‘69 Associate Director Career Center, Texas A&M University. Types of Employees. Regular Full-time Part-time Contingent Temporaries Contract Workers Consultants Co-ops/Interns. Manpower. INC. Contigent. Regular. Compensation Package. Pay Benefits

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Salary Evaluation

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  1. Salary Evaluation David McMahon ‘69 Associate Director Career Center, Texas A&M University

  2. Types of Employees • Regular • Full-time • Part-time • Contingent • Temporaries • Contract Workers • Consultants • Co-ops/Interns

  3. Manpower INC Contigent Regular

  4. Compensation Package • Pay • Benefits • Intangibles

  5. Starting Salary Salary Hourly Commission Fee Signing Bonus Career Salary COLA Increase Merit Increase vs. Merit Bonus Profit Sharing Stock Options Types of Pay

  6. Benefits • Insurance – Health, Life, Disability • Retirement and/or Savings Plans • Vacation and Holidays • Education Tuition Assistance • Expense Account, Company Vehicle • Professional Organization Memberships

  7. Intangibles • Location • Industry Outlook • Promotion Opportunities • Responsibilities/Challenge • Travel • Life-Work Balance

  8. Savings & Retirement • Pension Plan • 401K (or T.S.A.) • Stock Options

  9. 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)?

  10. 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.

  11. 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.

  12. Invest Early $35,000 $160,000

  13. 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. % of Pre-retirement Nest egg Income desired necessary at In retirement retirement 60% $1.96 million 80% $2.61 million 100% $3.27 million • Assumptions: Life expectancy is 90 years, no pension or Social Security; annual salary increases and inflation average 3%.

  14. Evaluate Two Entry-level Offers Company A Company B Base Salary $30,000 Base Salary $35,000 Medical 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 $26,210Actual Compensation $24,743

  15. 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

  16. 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

  17. Bachelor’s Degree Candidates By Curriculum And Employer

  18. $45K $42K $35K $40K employer YOU

  19. 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

  20. Salary Information • TAMU Salary Survey • NACE Salary Survey • Professional Associations • Cost of Living Index • Talk to People!

  21. Questions???

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