So you got a promotion. Congratulations! But are you feeling unsure about how great that raise, title change, or additional benefit actually is? Maybe you're even wondering if it's worth accepting at all since you might be able to find a better compensation package elsewhere. If so, you're not alone. Being offered a career boost from your company can be incredibly rewarding, but only if it's in line with your career priorities and your own personal bottom line. Here, experts break down how to evaluate that shiny new package with a level head.
Does it align with your goals?
When you're offered a promotion, the first step you take should be to measure it against where you want to go in your career in the future. Of course, compensation is crucial, but the new job duties you're being offered matter, too. "Ideally, a person receiving a promotion can articulate their long-term career goals, and thus can view the promotion, and its attached gifts, in light of their goals," explains Carlota Zimmerman, a career coach based in New York City. It's likely that your promotion will provide you with more money, a higher title, or other possible benefits, but more isn't always more if the position doesn't line up with your career interests.
"It's a natural instinct for humans, when presented with gifts, to want to snatch them," says Zimmerman. It's flattering to be offered something new. "But this is actually a time when you should step back and be reflective. Consider, for example, the people at the top of your industry you admire: What career choices did they make? There is something to be said for, after a time, moving to a new company, and meeting new people, weathering new opportunities, mastering new crises, and gaining new skills." Before you even think about the money, consider whether you really want to stay at the same company surrounded by the same people, or if you'd prefer to branch out, try something new, and develop fresh competencies elsewhere.
Dollars and cents
There are 2 extremely important considerations to make when assessing whether the raise you're receiving with your promotion is adequate. First, using a tool like "Know Your Worth" to see how your new salary matches up to others in similar positions can help you evaluate whether you're being offered fair compensation compared to the rest of the market. If you find that you're not, you may want to go back to the drawing board and attempt to renegotiate the terms of your promotion.
Secondly, determining how your raise translates into each paycheck is also worthwhile. A $10,000 raise might sound exciting, but what does that really mean for your weekly budget? Bianca Jackson, career happiness expert, explains how to get started on figuring it out. "At most companies, there are 26 biweekly payments in a year. A $10,000 raise divided by 26 equals approximately $385 before taxes. But wait, don't make imaginary plans just yet," she says. That's because you also have to account for taxes, especially if your raise bumps you into a new, higher tax bracket. "For example, at a tax rate of 25%, you could see $288 in each paycheck. Your $10,000 raise has now become a $7,488 raise instead." Tricky, right?
Here's some good news, though: If you work for a larger company with a full HR department, chances are, they'll be able to show you exactly how much more money you'll receive in each paycheck moving forward if you ask. "For a company to offer you a raise is a serious thing, and their accountants have to crunch the numbers before they can comfortably offer it to you," explains Zimmerman.
How important is the title?
The answer to this question isn't completely obvious because it ultimately depends on your goals. If you're thinking about declining a promotion based on the title, consider these 2 things first. "Title matters if you have a desire to climb the corporate ladder," says Jackson. "The usual path of someone progressing to the C-Level is manager to director to vice president to chief. Without that title progression, it may signal either you're not ready to be promoted or you don't have the potential in the eyes of hiring managers who believe and value linear progression of responsibility," she explains. On the other hand, "if you're gaining knowledge and experience to start your own business, it doesn't matter what title you accept."
Zimmerman mostly agrees, noting that, "Your title both does and doesn't matter. If your title empowers you, it matters. If you're already empowered, it probably won't matter much—even as you keep acquiring better titles." In other words, your performance, skill set, and dedication to the job can end up being more significant when determining your job duties and opportunities than whether you're "manager" or "senior manager." Of course, this is all assuming that you're happy with your new compensation.
Job title vs. salary
Not all raises come with title changes, and not all title changes come with raises. Often people wonder if they should ever accept one without the other. "A company asking someone to take on additional responsibilities must also offer corresponding additional benefits," notes Gina Marotta, a career and business coach. So if you do find yourself in the situation where a title or salary boost is being offered alone, it's most important to understand why you're being offered less than you should be receiving and figure out whether the company's offer is in balance with your new role's expectations, she says.
"No title change because the company is restructuring is understandable. No pay increase, because the company is having financial problems, is understandable. But then, as an employee, you do want to make sure you are being recognized and honored in some way," she explains. This could come in the form of company stock, a shorter work week, or having less desirable duties taken off your plate. In this situation, "fairness and a sense of balance are key," she adds.
Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.
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