Millennial Professionals are on the Move; Half are job-hunting or open to opportunity
April 8, 2016 — BOSTON–(BUSINESS WIRE)–It’s a predicament every working professional faces when receiving a job offer and considering a career move: should I stay or should I go? According to Fidelity Investments®’ Evaluate a Job Offer Study, many Millennials (born 1981-1991) are eager to make a move, with 41 percent expecting to start a new job in the next two years.
Even with 86 percent of Millennial professionals currently happy at work, nearly half (49 percent) are either actively looking, or open to a new opportunity.
While those considering a career change often focus on salary and bonus as key decision drivers when weighing a move, there are many others factors to consider – some financial and some far more difficult to quantify.
Interestingly, when asked how much of a pay cut they would be willing to take for an improved “quality of work life” (such as career development, purposeful work, work/life balance, company culture), Millennials report they are willing to take, on average, a $7,600 pay cut. Furthermore, when asked which is more important when evaluating an offer – financial benefits or improved quality of work life – 58 percent choose the latter.
A fair exchange?
“Clearly, many young professionals are thinking about more than money and are willing to sacrifice a portion of their salary in exchange for a career move that more closely aligns with their values or passions or improves their work/life balance,” said Kristen Robinson, senior vice president, Women & Young Investors, Fidelity Investments.
“However, achieving better quality of life and meaningful work doesn’t have to come at the expense of one’s bottom line. Getting educated about the total compensation and benefits package of an offer can enable job seekers to evaluate the potential trade-offs between two jobs and make an informed decision that could give them the best of both worlds.”
Expanding the Definition of ‘Total Financial Compensation’
While salary is top of mind when evaluating the total compensation of a job offer, there are other financial considerations that should be contemplated. When thinking about the total financial compensation of an offer, only 39 percent of Millennials include retirement benefits; just 28 percent contemplate health/medical insurance; 27 percent consider paid time off; and a mere 4 percent take into account stock options and profit sharing. The good news: once a job is secured, 81 percent with access to a retirement savings plan, such as a 401(k) or 403(b), enroll and take advantage of the retirement savings benefit.
“When evaluating the financial compensation of an offer, beyond salary, factors that should be considered include any employer contribution to a retirement savings plan, insurance options and premiums, and cost of living if the new job requires relocating,” added Robinson. “Fidelity’s job offer calculator helps you do the math – providing a comparison of the total financial picture between your current job and the one being offered. With this data to negotiate a stronger financial package on hand, we hope professionals can then focus on factors that can’t be quantified as easily, such as how their career and quality of life may change, and make a more informed decision.”
Few Ask Potential Employers to ‘Show Me the Money’
Once a job offer comes in, few professionals are actually taking a seat at the negotiation table. In fact, nearly six in 10 (59 percent) Millennials accepted their current position without negotiation, falling in line with older generations who are just as likely to say yes to the first offer.
Professionals across generations may have missed an opportunity to enhance their financial standing – of those Millennials who negotiated their last offer (41 percent), a resounding 87 percent were at least partially successful. Of course, a negotiation should be a result of a thoughtful proposal that demonstrates the candidate’s value.
For help learning about the art of negotiating of a salary, or weighing the financial ramifications of accepting a new job – visit Fidelity’s MyMoney, an interactive personal finance site developed with a younger generation in mind.
The “How to evaluate a job offer” article outlines important financial factors to consider, and Fidelity’s new Job Offer Calculator compares the total financial compensation of two jobs, illustrating how much more (or less) a professional could afford if they accepted the new position.
You’re Hired! Look Before You Leap
Professionals who have completed their evaluation and already accepted an offer have an important decision to make regarding existing retirement savings. Fidelity’s “Get the 411 on that old 401(k)” outlines the pros and cons of these four options: 1) keep the old 401(k) at previous job, 2) roll the old 401(k) into an IRA, 3) bring the old 401(k) money into the new employer plan, 4) cash out.
According to the study, 22 percent of Millennials have cashed out a workplace retirement savings plan at some point in their career and another four percent aren’t even sure what they may have done with those plans. While cashing out a retirement plan may seem appealing in the short-term, Fidelity’s analysis shows that a 30-year-old who cashes $16,000 from a retirement savings plan when changing a job could have seen that grow to $81,5001 at retirement if that money was invested in a tax-advantaged account. Read “Your 401(k) Are you crazy to cash out,” to better understand the long-term effect cashing out may have on retirement savings.