You have a new job and are ready to pack up your desk.
But before you walk into your boss's office and give your two weeks' notice, have you thought about your benefits and other hidden costs that come with changing jobs?
The timing of a job change can affect your health coverage, retirement plans, vacation time and even possible stock options.
Other questions to ask yourself before you jump jobs: Will your new salary compensate for a longer commute or more day care expenses?
If not, do you have it in you to negotiate for more pay or for additional benefits such as time off?
With nearly one-quarter of all employees changing jobs since mid-2004, recruiting and retaining qualified workers has emerged as top concerns for employers, a recent MetLife study of employee benefit trends found.
"Competition for talent is heating up,'' said Ben Colvin, vice president of institutional marketing for MetLife. "That puts employees in a great position to negotiate their benefits.''
But very few people actually take the time to really examine and maximize their employee benefits.
"Before they change jobs they should spend more time thinking about their benefits than they usually do,'' Colvin said.
When changing jobs, timing can be important.
To earn company benefits such as stock options and 401(k) matches, many companies require their employees to be vested -- meaning you have to work a certain number of years to be entitled to take the money with you when you leave.
Leaving early could mean you forfeit some or your entire match. If you do leave, you have options: You can cash out your 401(k), leave it or roll it over.
Out of 200,000 workers with retirement savings plans, nearly half said they cashed out their 401(k) money after they left their jobs, according to an annual survey by human resource company Hewitt Associates.
Of the remainder, 32 percent kept their money in their employer's 401(k) plan, and 23 percent rolled it over into an IRA or other retirement plan, according to Hewitt.
Young workers were most likely to cash out -- nearly two-thirds between the ages of 22 and 29 did so, according to the survey.
Remember, by cashing out, you are taxed on the withdrawal. And most people under the age of 59 1/2 will also have to pay a 10 percent penalty tax.
So, if there's a waiting period for participation in your new job's retirement plan, leave your funds in our old employer's plan until you're eligible for the new plan.
Another benefit to look closely at is your health coverage.
Changing jobs can affect the health benefits of you and your family, since you are usually no longer eligible to participate in your former employer's health plan.
Normally, health insurance runs through the end of the month for which premiums have been paid. So, if you're thinking about leaving your job, it would be advantageous to give your notice the day after your premium was paid -- typically at the beginning of a month.
If you have to wait for a new health plan to kick in, you may want to consider COBRA continuation coverage at group rates under your former employer's health plan.
"Yes, there's a lot to keep track of,'' says Dallas Salisbury, chief executive of the Employee Benefit Research Institute in Washington. "But you surely don't want to go without health insurance.''
Other items to consider include commuting costs and time, dress codes and even personal days.
For some, vacation days or family leave time can be an essential benefit.
If the employer cannot pay you as much as you'd like, but you are willing to accept a lower salary to work there, you may have some wiggle room in negotiating additional benefits.
``I wouldn't recommend talking about salary and benefits until you have an understanding of the position,'' says David Stroud, senior vice president at Lee Hecht Harrison, a career management and consulting firm in Addison, Texas. ``Most people believe that salary is the only thing to be negotiated. However, anything is negotiable.''
Benefits like vacation days, professional memberships and even bonuses can easily be discussed with a future employer before a job offer is accepted or declined, Stroud says.
It's also important to leave your current job gracefully.
Just because you're changing jobs doesn't mean you should slack off in the position you're leaving.
Maintaining the same level of professionalism you have in the past will only help you get strong job references in the future, Stroud says.
And while it's still standard to give two weeks' notice, as much as four or six weeks notice is typically given for upper management.
Email This Page!