For many students, offer season has begun and will continue through the summer depending on the industry you are entering. Regardless of your industry or the position you are being offered, there are details in your offer letter you will want to review and understand to ensure you are getting the best offer you can!
- Total Compensation (Salary, Bonus & Benefits)
- Start Date
- Relocation Assistance
- TOTAL COMPENSATION.
Salary is usually the first thing a student reviews. While very important, it is not the only important piece to the financial considerations in the offer letter. Salary should be looked at combined with bonus and benefits. This combination is often referred to as TOTAL COMPENSATION.
Let’s start with reviewing the salary component.
Most companies have a narrow salary band for entry level positions. Typically, the only variations are based on location and sometimes based on GPA or “Tier” of the university the student attended. If you have a very high GPA, this can influence the conversation some. However, odds are, many, if not all of the other new grads they are hiring are of a similar profile as yourself (i.e. high GPA from a Tier 1 university) and there is little variation in the experience each candidate has as they are all entry level positions. However, first rule of the professional world when it comes to salary – you will never get anything you don’t ask for – so it never hurts to ask!
First step, you will want to do your homework to understand what a competitive offer looks like. There are a couple ways to gather this information. There are several online resources that consolidate information on common job titles. Two reliable options are:
Also, some cities & states have begun requiring employers to post their salary ranges when posting a job. So if your position is also offered in New York City or Colorado, you can get a range to reference from the job description posted in these locations. You will then have to adjust the range based on the location where you will be working. This is referred to a Cost of Living Adjustment (or COLA). There is a government/national version of this that each company makes adjustments to when developing their own policies. You can use https://www.salary.com/research/cost-of-living as a reference.
- EXAMPLE: You are offered a job for $55K in Boston as a Tufts Grad with a 3.7 GPA. You see the same/similar job posted in New York City for $65K & learn the COLA from New York to Boston is approx. 6.7%. You now have data to understand the position should probably be earning approx. $60,600 in Boston (based on 2022 data). You can use this information to negotiate for an increase in salary. This information can also help you understand how competitive this employer fits in the overall marketplace.
Most positions in Financial Services come with a bonus opportunity. It is typically stated as a target percentage. First, it is critical to understand a bonus is just that – a bonus. It is NOT guaranteed and often based on factors out of your control. Industry/market conditions, company performance, team performance and of course your personal performance are typically what impact your bonus. If your offer letter states a bonus target of 10% of your salary, you will only receive 10% if the company meets all of their financial goals and you are a TOP performer on your team. Typically, at larger companies, less than 20% of the company receives its full bonus target. So while in some industries, this can be a large piece of your compensation package, please keep in mind that it is never guaranteed.
Depending on the size of the company you are working for, the benefits package could vary greatly. At a minimum, you should be offered health insurance, access to a 401K (or equivalent) retirement solution, and a vacation allotment.
- Ask if it is a High Deductible Health Plan (HDHP) or an HMO or PPO. The type of plan can be the difference between costing you nothing to thousands of dollars per year to see a Doctor.
- Ask what the employee contribution is on a monthly basis. This is the amount of money that will come out of your paycheck to pay for your health insurance. This can vary greatly from $0 to hundreds of dollars each month.
- Some larger companies offer employees an allowance to offset Deductibles or Copays – if offered, it will state so in the benefits package.
Retirement Plan: A company typically matches $0.50 for every $1 you contribute to your 401K up to 3% of your salary. Some pay a whole lot more, some less. You can’t change this, it is set up for the whole company, but it is an important piece to understand.
Vacation: This will vary greatly from industry to industry and company to company. You can’t negotiate this number long term, but there can be exceptions in the first year. If you are joining a company in July and already have a vacation booked for August, you can sometimes negotiate the week off without pay or in advance of earning it. Talk to your recruiter or Tufts Career Services for guidance.
Other benefits to look for & consider as part of your Total Compensation:
- Short Term Disability
- Long Term Disability
- Flexible Spending Accounts
- Dental Insurance
- Pension/Cash balance plan (usually only available at larger financial services companies)
- Stock Options/Equity (less common for entry level positions unless a company policy that everyone gets this benefit)
- START DATE.
Depending on the size of the company & whether there is a training class you will be enrolled in when you join the company are just two of the factors in how flexible a company may be on when you start. If you have a post-graduation trip planned, want to go home for the summer, or just need some down time before starting to work, ask for a later start date. Most companies have some flexibility in this category.
Be sure you have this conversation with your future manager before signing an offer letter. Does the company have a WFH policy? Ask for a copy. (many were created as companies returned to offices over the past months). If there isn’t a company-wide policy (i.e. WFH 2 days per week), but you have discussed this with your manager you would have this arrangement GET IT IN WRITING. Did you discuss that the position is fully remote but the company will fly you to headquarters once a quarter? Again, GET IT IN WRITING. A conversation you had during an interview will not hold if that manager moves to a different role or there is a reorg and you work for someone else.
- RELOCATION ASSISTANCE.
Is your new position in a city other than Boston? Many companies will offer a relocation assistance budget if you ask for it. There is no formula for this at most companies, but you should be able to gather information on what it will cost for you to secure an apartment (broker fees or security deposits can be significant in cities such as NY or San Francisco, so do some research in this category) and rent a UHAUL or similar to get to your new location.
EXPENSES: Most companies will likely just have a one size fits all budget for this (i.e. everyone gets $X), but you should still understand your expenses when evaluating the offer.
TAXABLE: It is also important to understand whether the relocation assistance is taxable (it likely is!) i.e. if you are given a relo grant of $5,000, you will only get $5,000 less taxes in your first paycheck.
TIMING: The last question to ask is WHEN you will receive the assistance. Some will give the money to you before moving to help with expenses, but likely you will not receive the money until your first paycheck or 30 days after starting. Thus, budget accordingly, you will likely still need to front the money for security deposits, etc.