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Comparing Job Offers
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  1. Comparing Job Offers

  2. Congratulations! • Sara just graduated from college with a teaching degree and received two job offers. How does she decide which one to accept?

  3. Which is the better deal? • Job Offer 1 • $35,000.00 in Reno, NV • Job Offer 2 • $40,000.00 in Anchorage, AK How does she decide???

  4. Location and Environment • Affordable housing • Low crime rate • Good Schools • Desired climate • Entertainment • Commute time

  5. Base Salary • Dollar amount a person receives in his/her monthly paycheck before commissions or taxes.

  6. Fringe Benefits • Bonuses • Health and life insurance • Workman’s compensation • Retirement benefits • Paid sick time • Paid holidays and vacation

  7. Opportunity for AdvancementQuestions to ask: • How do you get a raise – performance, longevity. . .? • Is the company rapidly growing? • Do they hire from inside or outside the company?

  8. Other Work Incentives • Gym membership • Flexible hours • Work from home • Merchandise discounts • Child care

  9. Additional Perks • Company car • Relocation allowances • Repayment of education loans • Stock options

  10. Cost of Living The cost of normal living expenses: • Housing • Food • Transportation • Everyday expenses (gas, movies, haircut, etc) • Varies from state to state. • Usually lower in rural communities

  11. Cost of Living Index • American Chamber of Commerce creates a cost of living index. An average city has an index of 100 • A community with a lower index has a lower cost of living than a community with a higher index. • Index form: how cost of living data is expressed • Rapid City’s index is 96 • www.kiplinger.com/tools/bestcities_sort/

  12. Cost of Living Equation • In order to compare the cost of living in two cities always follow these three steps: • Step 1: Assign each cities numbers. One city will be assigned the number one and the other the number two. • Step 2: Provide the corresponding salaries and index amounts to the formula. • Step 3: Complete the math and indicate which city is a better offer and why.

  13. Sara’s Job Offers • Job Offer 1 – Reno, NV • $35,000.00 salary • 105.1 cost of living index • Job Offer 2 – Anchorage, AK • $40,000.00 salary • 123.1 cost of living index

  14. Index of City 2 Salary in city 1 x = Equivalent Salary in city 2 Index of City 1 Step 1: City 1 - Reno (105.1) ($35,000) City 2 - Anchorage (123.1) ($40,000) Step 2:$35,000.00 x 123.1 = 40,994.29 Step 3: Reno is the better offer 105.1

  15. Joe’s Offers • Job Offer 1- Denver, CO • $24,000.00 salary • 102.9 cost of living index • Job Offer 2 - Seattle, WA • $32,000.00 salary • 148.2 cost of living index

  16. Cost of Living Index of City 2 Salary in city 1 x = Equivalent Salary in city 2 Cost of Living Index of City 1 Step 1: City 1 – Denver (102.9) ($24,000) City 2 – Seattle (148.2) ($32,000) Step 2: $24,000 x 148.2 = $34,565.60 Step 3: Denver is the better offer 102.9

  17. Benefits Fringe benefits and employer provided services can make a difference: • For example, if a $35,000.00 job had 100% of medical insurance coverage valuing $400.00 per month, a person would not have to budget for $4,800.00 in medical insurance per year. This would increase the value of his or her salary to $39,800.00. • Benefits and services should be included within the salary before calculating the cost of living.

  18. Sara’s Job including benefit package • Job Offer 1 – Reno, NV • $35,000.00 salary + $4,800.00 benefits = $39,800.00 • 105.1 cost of living index • Job Offer 2 – Anchorage, AK • $40,000.00 salary + $5,200.00 benefits = $45,200.00 • 123.1 cost of living index

  19. Cost of Living Index of City 2 Salary in city 1 x = Equivalent Salary in city 2 Cost of Living Index of City 1 Step 1: City 1 – Reno ($35,000 + $4,800 = 39,800) City 2 – Anchorage ($40,000 + $5,200 = 45,200) Step 2: $39,800 x 123.1 = $46,616.36 Step 3: Reno is still the better offer 105.1

  20. Cost of Living Index of City 2 Salary in city 1 x = Equivalent Salary in city 2 Cost of Living Index of City 1 Step 1: City 1 – Denver (102.9) ($24000 + $4500 = 28,500) City 2 – Seattle (148.2) ($32000 + $6000 = 38,000) Step 2: $28,500 x 148.2 = $41,046.650 Step 3: Denver is the better offer 102.9

  21. Web sites • Web sites available to help calculate salaries and cost of living in various locations • www.bankrate.com/brm/movecalc.asp

  22. Questions?