how to judge compensation
When you’re a recent graduate looking for a new job, you’re going to be chasing the highest salary. Admit it or not, most grads can’t think much past getting the most money possible. After all, there’s student loan debt, the need for a new wardrobe, a car that runs without sounding like a machine gun and the biggest factor of all – feeling like it was all worth it somehow.
Money matters. Pundits find it easy to discount the importance of money, but if you’ve just spent four years skimping and saving the difference between $40,000 a year and $60,000 (or $20,000) is no minor thing. A few thousand dollars more can mean a lot – furniture, or an apartment in a better neighborhood, or even just having enough left over to pay down your student loans a little faster. Money can make a big difference early in life.
But if you’ve been working for a while, your salary has probably increased since your rookie year. Maybe that $40,000 job you took ten years ago pays you $60,000. Maybe it pays you $100,000. The money is probably (but not definitely) better. Sure, there are other considerations – now you need a nicer car, a bigger house, the kids are on the way and let’s face it – a dollar isn’t worth what it used to be.
In 2009 you need to start thinking about how you measure compensation. Your job, whether you’re an employee or an entrepreneur or even a stay-at-home parent, has many forms of compensation. Judging the compensation solely based on a score is a bad idea. How bad? OK, I have two books to sell you. One costs $23. The other is $4.99. Which one is worth more to you?
Any endeavor you undertake needs to compensate you by:
- Helping you learn new skills.
- Letting you strike the balance between work and life.
- Making you a happier person.
- Creating a work environment you enjoy.
- Allowing you to contribute to the world in some way.
Far too often we think that these things don’t matter – if the money is good enough, we can forget other shortcomings. Everything matters. I know that for years I liked to think that I was not my job – that I was somehow better, or separate. My job was just a salary to support my “real” life. Your job (again, that could be anything from an entrepreneurial effort to an hourly wage) cannot be viewed as just compensation. It does not support your “real” life – it is your life. Unless you are born into the idle rich class, your work will be one of the defining factors in your life, if not the defining factor. Don’t sell yourself short by thinking that the only way your worth can be determined is by attaching a dollar sign to it.
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I'm going to say that #2 is the most important from that list. Especially for people that will chase the highest compensation no matter what. Without that balance, work will inevitable absorb your whole life and enjoying it will be nearly impossible.
I had dinner with a friend the other night, and we got down to discussing our jobs. She commutes over an hour by train to a high-paying, high-stress, but extremely satisfying job. I walk 15 minutes to my low-paying, laid-back, kinda satisfying job. We're both happy with our lot. I probably make $80k less than she does (just guessing). Is it worth it? Well, I don't think I could handle that much extra stress, even if it came with a price tag. I sure could use that extra money to save up and pay down debt, but I'd rather stick to my four-day week, casual dress, and laid-back work place. It keeps me going in a way a high-stress position never could.
Highest compensation could also be looked at as the biggest value. As a recent grad, I am lucky that I had college paid for me, and very appreciative of it. Now that I am working and financially independent I start to look at the value I get from my purchases, both big and small.
I agree.
The work you do in the short time we're here, is us. It is our identity. We're known as the artist, the carpenter, the accountant and so on. That is how people truly remember us the easiest.
It is important than to seek a high-paying job in a field that disallows you to separate your identity from it. When that happens, you most likely have found the profession that resonates the deepest chord in you.
That is something to be congratulated on. Most go after the $$ signs thinking the right life will follow. What they fail to see is that the right life needs to happen first, and then $$ signs will often follow them anyway.
Good post as always Steve.
PS. It turns out, network marketing is my resonating chord. Ohhh now if I was not so lazy… lol
When evaluating a job's compensation, you should also consider the benefits (insurance, vacation, onsite exercise facilities, retirement matching programs, etc.)… a slightly lower paying position may actually yield greater overall compensation when you take into consideration all those things.
But of course, the most important thing is to find work that you find fulfillment with and coworkers and bosses that you enjoy being around. As you #4 says, environment is so important!
Everything matters. I know that for years I liked to think that I was not my job ———————– this is so true
Good post. Have bookmarked your blog and will surely come back.