As we all know, there is never a ‘perfect time’ to make a career move, and if there is, the chances of there being the `perfect role’ simultaneously is highly unlikely. Whether in relation to market conditions or your own personal situation, there are always barriers that discourage us from exploring new opportunities. With bonus season approaching, timing your move is particularly tricky for several reasons as we discuss here.
- Competition
Post bonus season is typically the most competitive time of the year when searching for a new role, this mainly since your peer group/competition are also waiting until their reward for the past 12 months has been received.
- Bonus potential foregone with the prospective employer
Job seekers often overlook the impact of delaying a pending bonus on their potential future bonus prospects with a new employer. Some potential employers will offer pro-rated bonuses for a partially completed first year. Alternatively, certain potential employers may have a precise cut-off month. This means that if you commence after this period, the delay in starting the job search might make you ineligible for the entire bonus cycle of the following year.
- The present value of your bonus vs probability-weighted value of your bonus
Amid rising interest rates and a high cost of living, the potential opportunity to save on monthly income, assuming a salary increase, is forfeited by waiting for the future bonus to arrive. Equally, we also need to consider the eroding purchasing power of the future bonus amount, due these factors. The distinction between cash available today and a future date is becoming increasingly relevant. In terms of assessing your present bonus, you may access online resources for ‘present value’ and ‘annuity formula’ calculations to assist in your decision-making process. Upon determining the present value of your bonus, and potential salary, as a future cash flow, it is important to consider the bonus in relation to the probability of its actual reception.
To summarise, the timing of your search is becoming ever more important. When it comes to bonus time of year, ensure you consider the wider factors that often go unconsidered by many. Ultimately, pending bonuses should not entirely impede your willingness to consider other opportunities that may arise. If bonus due is the only thing holding you back from accepting a new offer of employment, be sure to consider not only the current cash cost, but also the opportunity cost.
If you are concerned about how the current market may affect your position, or to discuss how we can support your hiring processes in the current market, please get in touch with Consultant, Shane Cassidy, at shane.cassidy@coopman.uk or Director, William McCoppin, at william.mccoppin@coopman.uk
