You’re feeling overworked. Got a headache. The boss is screaming. Here comes that back-stabbing colleague. If this is your Monday morning, it’s no wonder you’re looking to move on to a new job. But before you make the leap, think about a few things.
- Opportunity Cost. Yes, the U.S. unemployment rate has fallen over the last 5-6 months, but most economists say this is because a large volume of long-term unemployed individuals have thrown in the towel (and so are no longer counted among those without work). One major cost of jumping ship to a new job is opportunity cost…the proverbial “bird in the hand”. If your current place of work is stable—they didn’t suffer major layoffs during the recent recession; they’ve continued to hire, albeit at a slow pace; you received a raise last year, albeit a small one; your health benefits were unchanged—then you should think before moving on to a company that may not provide the same. (Note: If you can’t move up or expand your skill set at your current job, there’s also high opportunity costs if you decide to stay put.)
- Will your new salary be enough? Career changers, in particular, will often accept a lower salary in order to get their foot in the door in their new career. But a market correction could engender higher inflation, rendering that new salary even lower (in real dollars) than anticipated. Make sure you can pay your mortgage before making the leap.
- 401kVesting. Are you fully vested in your current company’s 401k (or other retirement savings plan)? When you start at a new company, you may need to wait two, three or more years before your employer’s 401k matching funds become 100% yours for the taking. In fact, you may need to wait several months or a year before the company will start contributing to your plan at all. This can mean a hit to your long-term retirement savings.
I’m not saying you shouldn’t change jobs. (If I did, that would hurt my own business pretty badly!) What I am saying is that you should think it through to make sure the new job you take is the right one for you.
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