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Help with running the numbers when deciding on job offer
Posted on 9/17/15 at 9:48 am
Posted on 9/17/15 at 9:48 am
I have a current offer to be promoted that will raise my salary by 8%.
There's another position that has a good chance of opening in the next 6 months that would raise my current salary by 22%. Let's say the chance of this second position opening and me getting the job is 70%.
What's the better move math wise? Take the current offer or decline the current offer in hopes the 2nd position comes open soon? Both jobs are with the same company that I am currently with.
There's another position that has a good chance of opening in the next 6 months that would raise my current salary by 22%. Let's say the chance of this second position opening and me getting the job is 70%.
What's the better move math wise? Take the current offer or decline the current offer in hopes the 2nd position comes open soon? Both jobs are with the same company that I am currently with.
7
Posted on 9/17/15 at 9:52 am to Jon Ham
I tried to run the numbers myself and this is how it went -
If my current salary is $100.
8% of $100 = $8
22% of $100 = $22
If I decline the current job offer, I'm risking $8 on a gamble to win $22.
8/22 = 36%
As long as there is a better than 36% chance to get the 2nd job, waiting for the 2nd job is a better move.
Am I doing this right?
If my current salary is $100.
8% of $100 = $8
22% of $100 = $22
If I decline the current job offer, I'm risking $8 on a gamble to win $22.
8/22 = 36%
As long as there is a better than 36% chance to get the 2nd job, waiting for the 2nd job is a better move.
Am I doing this right?
Posted on 9/17/15 at 9:58 am to Jon Ham
you can't take the current promotion and get the new job later?
Posted on 9/17/15 at 9:59 am to Jon Ham
I have a rule to never change jobs for less than 20% raise. That doesn't include peace of mind (boss is an a-hole).
Posted on 9/17/15 at 10:00 am to Hermit Crab
quote:
you can't take the current promotion and get the new job later?
Probably not within a year of taking the first job, although it's not completely out of the question. When promoting from within, they always ask "Have you been at your current position for at least 1 year?" I would prefer to avoid the situation of taking a new job, working for a month, then applying for another job.
Posted on 9/17/15 at 10:29 am to AUCE05
quote:
I have a rule to never change jobs for less than 20% raise. That doesn't include peace of mind (boss is an a-hole).
Dumb rule. Sometime its not about the next job, but the one after that. Career path should be your focus, not money.
Posted on 9/17/15 at 10:30 am to Jon Ham
Expected value of Job A is 8%. 8% x 100%
Expected value of Job B is 15.4%. 22% x 70%
From a pure salary maximization standpoint, you should wait for Job B. Of course, this doesn't take into account many factors about the jobs, as well as your personal risk tolerance. This is also assuming that your estimate of 70% is correct or close to it.
Expected value of Job B is 15.4%. 22% x 70%
From a pure salary maximization standpoint, you should wait for Job B. Of course, this doesn't take into account many factors about the jobs, as well as your personal risk tolerance. This is also assuming that your estimate of 70% is correct or close to it.
Posted on 9/17/15 at 10:55 am to Jon Ham
Are you saying 70% chance you get the job if it's available?
Or 70% chance it becomes available and you get it?
IMO, the job just becoming available is the riskiest variable.
Or 70% chance it becomes available and you get it?
IMO, the job just becoming available is the riskiest variable.
Posted on 9/17/15 at 10:59 am to Jon Ham
70% chance of 22 is 15.4
15.4 > 8
Not sure what the 8/22 is, thats just a ratio without taking into the chances of getting 22
15.4 > 8
Not sure what the 8/22 is, thats just a ratio without taking into the chances of getting 22
Posted on 9/17/15 at 11:03 am to Toula
quote:
Are you saying 70% chance you get the job if it's available?
Or 70% chance it becomes available and you get it?
70% chance it becomes available and I get it.
quote:
IMO, the job just becoming available is the riskiest variable.
You're right. While I was told there's a "good chance," of it happening soon, who really knows.
Posted on 9/17/15 at 11:05 am to Danny Woodhead
quote:
Not sure what the 8/22 is, thats just a ratio without taking into the chances of getting 22
I was using my poker "pot odds" method. When determining whether to make a call in poker, you divide the amount of the call by how much would be in the pot if you win. If the % chance of winning is equal to or higher than the ratio of the call to the total that will be in the pot, it's a profitable call.
For this situation I'm risking 8% raise to gain a 22% raise, so as long as my chances of gaining the 22% raise are better than 8/22, I should wait.
This post was edited on 9/17/15 at 11:13 am
Posted on 9/17/15 at 11:11 am to AUCE05
quote:
I have a rule to never change jobs for less than 20% raise. That doesn't include peace of mind (boss is an a-hole).
Good rule, you have to make up that equity you lose with salary.
It takes about 20% anyway for you to really even notice a difference.
Posted on 9/17/15 at 11:23 am to STLhog
quote:
Good rule, you have to make up that equity you lose with salary.
It takes about 20% anyway for you to really even notice a difference.
I have a similar perspective. Rebuilding your brand in a new company takes a lot of time and effort.
Posted on 9/17/15 at 11:28 am to lynxcat
Both jobs are promotions within the company I am currently working for.
Posted on 9/17/15 at 12:05 pm to Jon Ham
quote:
Both jobs are promotions within the company I am currently working for.
8% is very low for a promotion.
Is their any risk of blowback if you turn down the promotion to job A while you wait for job B?
Posted on 9/17/15 at 12:28 pm to lynxcat
quote:
Is their any risk of blowback if you turn down the promotion to job A while you wait for job B?
There's a chance that particular unit may not want to offer me a job again if they know I'm holding out for more than they were willing to offer.
Posted on 9/17/15 at 12:29 pm to Jon Ham
You should account for how many years you would be at the next job. If it's 2 years then 44-16=28% difference without taken into account your probabliities
If it were me I'd gamble for the higher bump. 8% isn't that much
If it were me I'd gamble for the higher bump. 8% isn't that much
This post was edited on 9/17/15 at 12:32 pm
Posted on 9/17/15 at 12:35 pm to POCKET
quote:
You should account for how many years you would be at the next job. If it's 2 years then 44-16=28% difference without taken into account your probabliities
Good point.
quote:
If it were me I'd gamble for the higher bump. 8% isn't that much
I'm thinking I will counter for a 13% raise. I think a 13% raise now is worth giving up on a chance at a 22% raise in the near future. If they aren't willing to do 13% then I will probably say no thanks.
Posted on 9/17/15 at 1:26 pm to Jon Ham
I would push offer 1 for more money, but you'll need a better reason than "I predict another job opening within the next few months" because there is too many unknowns and ifs with the other potential offer. Plus, you'd make 8% higher pay until you theoretically could even start the next job, making you closer to the next raise for that position. This makes the 8 vs 22% not as much of a difference.
Posted on 9/17/15 at 3:22 pm to Jon Ham
quote:
I have a current offer to be promoted that will raise my salary by 8%.
Take it, if you are the right candidate for the other position take it to, why waste 8%, hoping for a chance 6mos from now on a promotion that may not even happen.
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