You’ve done it: you’ve received a job offer from the role you’ve been looking at for ages; after a long and demanding interview process, you’ve received a call and are looking at an offer. And although you might think that it’s an easy road from here and you’ll be starting your new role in just a few days, that’s not quite a reality.
The scope of your offer will depend on quite a few factors: your experience, your exact role, your location, and the company itself, to name a few. But regardless of these factors, you can expect to receive critical information about your total compensation and benefits in your offer letter, which is usually divided up into different categories.
If you’re just starting out in the field, you may not know that evaluating your salary, benefits, equity, bonuses, and any other forms of compensation is an absolute crucial part of accepting or denying a job offer; if you’re experienced in tech, you might not know exactly what to expect or even to look for in a job offer to see if it’s a good fit.
In this article, we’ll break down the different aspects of your compensation, in addition to our tips and tricks for separating a great job offer from just an okay one.
What are the Different Kinds of Compensation?
First things first: when we say compensation, we’re not just talking about your salary, although that does make up a solid chunk of what the company offers. And having money to pay rent, buy food, and enrich your life is clearly a necessity; before you ignore the other aspects of your offer, such as benefits or bonuses, make sure you read clearly through them and see the value that they’d bring–even if it’s not a monetary one.
While there are lots of different ways a company can compensate you for your hard work and skills, the main five are your salary, signing bonus, benefits, performance bonus, and equity. To make sure you have a good understanding of each and the value they bring to the table, let’s dive into each.
Salary
It’s easy to focus too much on your salary–after all, that’s the number that you’ll be seeing on a regular basis deposited into your account. And while we understand that many tech workers set their eyes on that number and that number alone, it’s important to remember that your salary isn’t the only form of compensation you’ll be receiving. If it’s not exactly where you’d like it to be, make sure you check out what else you’re being offered to see if you have additional compensation in another area.
Not all offers include information about yearly raises, but if you can get an idea of the average salary increase for your role year-to-year, it can help you get a better idea of how your salary will grow over timel.
Signing bonus
Different from a performance-based bonus, a signing bonus is a one-off payment designed to incentivize you to take the job and join the company. Because this is a unique payment, the value can vary significantly and you can expect to see a large offer in your bonus, especially if you’re in a highly competitive field.
Depending on when in the year you switch jobs, you may lose out on your bonus at your current job or not have a full range of vacation days to take. These signing bonuses can also cover anything you’re losing from your current job, such as a retirement plan match or end of year bonus.
Signing bonuses are usually just positive, but make sure you check the fine print: some signing bonuses are paid out over time instead of at once, or require you to be at the company for a certain amount of time before it’s awarded. And for those that are awarded at once when you take the job, you might have to pay some of it back if you leave the company before a certain period of time has passed.
This isn’t to say signing bonuses aren’t worth it–they definitely are, but you’ll need to make sure you read all the conditions before accepting the offer.
Benefits
Here comes an important part of your offer: your benefits. Although this may seem like an inconsequential part of the offer when compared to dollar signs, it does have a large impact on your work/life balance and your overall satisfaction when it comes to working there. Some employers will sugarcoat the benefits with fun details like monthly happy hours or game rooms in the office, but you’ll need to look below the surface and figure out if these benefits actually matter to you. There are many different benefits, but here are some of the most common (and valuable) ones:
Childcare: large companies may offer childcare in-office at heavily discounted rates, which is incredibly beneficial for employees and something that could save you lots of money in the long run, in addition to the convenience of having your child nearby during the day.
Vacation days: if you’re in a country where vacation days are government-mandated, there may not be a whole lot of surprise here. But for some, knowing the amount of vacation days awarded yearly and any rules that may be attached to them is key before you get started. For example, some companies don’t allow more than two weeks vacation at a time, require a month or so of notice before your desired date, or ask that you work three months before you take a single day. These seem minor right now, but it’s important to know the details before you sign on the dotted line.
Sick days/leave: you don’t want to wake up sick and realize you aren’t aware if you have unlimited sick days, if you have only a few, have to provide proof you’re sick, or are simply trusted to be honest. And what’s the company’s policy on leaves of absences if you or a family member falls ill? Reviewing these policies is key before signing an offer letter.
Remote/in-person work: lots of companies boast hybrid policies, but are strict with the days workers are allowed to work remotely or require permission well in advance. If you’re looking for a mainly remote job, make sure the company doesn’t have any requirements that would hinder your ability to regularly work from home.
Health insurance: this depends on your location as countries with well-functioning public healthcare systems may not offer this, but many companies do offer private healthcare to their employees and their immediate families; review the program they offer and see if it would be a good fit for you.
Retirement plans: planning for your future is key and some companies offer matching plans where they match a certain amount of money to a retirement account each year; see if this is listed as a bonus and reflect on if it would be an important addition for you.
We could list lots more, but as you can see, there are varied benefits that employers can offer and looking carefully through them all, seeing which would actually provide value to your life, is a key aspect of evaluating a job offer.
Performance bonus
Unlike the signing bonus, your performance bonus is something that will be paid out yearly, usually in January or February and is based on role-specific goals. Most job offers will include the KPIs and other performance indicators, along with the bonus you can expect to receive if you meet expectations. This is simply a guess, however, and it’s important to realize that your bonus will depend on lots of factors, such as the company’s performance that year.
Your bonus may very well be a large part of your overall compensation, so it’s important to read carefully through this section and make sure you’re aware of what you’ll have to do to earn it.
Equity
Just like your benefits, your equity offering will depend quite heavily on what country you’re in. But to cover the basics, equity is a share of the company that’s awarded to you; as the company performs better, your stock will increase and naturally, employees will be more motivated to reach peak performance.
In tech specifically, you’ll find that equity makes up a large portion of your compensation. If you’re not familiar with it, feel free to ask HR for more information–there’s nothing wrong with asking for a bit more clarity on such an important topic!
Although evaluating your tech job offer may seem impossible, it’s a reality of entering the tech job market and something you’ll have to master throughout your career. And that’s why Career Services is such an integral part of the bootcamp experience at Ironhack–for up to one year after graduation, we provide you with 1-1 assistance with your job search and are always there to answer any burning questions you may have.
If you’re ready to prepare yourself to enter the tech job market, fully understanding your compensation structure is a requirement. So study up and get ready for your bootcamp: it will help you land the job of your dreams.
