Springing Forward: Things to Consider Before Leaving Your Job for Another in Corporate America
It’s hard to believe, but it is February. We are 1/12 of the way through the year, but hey- Punxsutawney Phil didn’t see his shadow, and spring is just around the corner after the Polar Vortex. Companies are reporting year-end results. Many managers are finishing employee performance reviews and conducting feedback sessions. Most companies that offer bonuses use a formula that uses one or a combination of variables like overall company, division, and individual performance. Bonuses, stock options, and profit sharing plans are a few instruments companies use referred to as “incentive compensation” because the goal is to incentivize employees to meet objectives. It’s commons for these types of incentive compensation to be paid out about a quarter after the company’s fiscal year is complete.
Many employees who elect to leave their job do so after bonuses are paid out. After all, why walk away from money for time you’ve already spent towards results? If you’re preparing to leave your current role, here are a few things to keep in mind:
Don’t leave until you have another job secured. I have heard horror stories about people who actually resign before they received and signed an official offer from their next employer and completed all required pre-employment activities like drug screenings and background checks. Unless you’re planning to leave the work force and start your own gig, do not do this! It puts emotional, mental, and potentially financial stress on you. Not to mention, some benefits such as healthcare are not extended past the last day of your employment with your current employer, and you can see significant increases in both cost and coverage.
Think about money you may be leaving on the table. Money isn’t everything, and I’m not saying you should stay at a job you’re absolutely miserable in because of money. What I am saying is you should account for the financial implications of leaving a job before your bonus pays out or before you are vested in your 401-k. Let’s say your company offers a 5% 401-k match, vested over 3 years, and you make $50,000. To maximize your employer’s contribution, you’ll need to contribute at least 5% of your salary into your 401-k each month. Let’s say you put in 5%, $2,500 each year. This means your employer will also put in that amount each year, and it will earn interest. If you leave before three years, you’re leaving $7,500 of an employer contribution match on the table, and that’s without accounting for any interest growth on the funds.
Think through what you really want and what is pushing you to leave your current company. Many people leave their current job because they hate the role they are doing with the company. They go to another company, only to find themselves in a worse off position of hating the company, hating the role, hating the location, hating the people they work with, hating their career prospects, or hating some combination of the above. If you aren’t happy in your work today, ask yourself why. Is it the company itself? It is the location? Is it the role you’re in? Today, many companies are more flexible than they used to be when it comes to giving employees new opportunities via different roles, locations, functions, and experience in different parts of a business. Let your manager know what you want. Be open and honest, and don’t feel like you have to wait until your performance review timeframe to have a one-on-one discussion. You can have that type of discussion at any time.
Do not burn any bridges. Relationships and networking are a critical part of business, and it really is a small world. Don’t assume that when you leave your company that everyone you worked with will drop off the face of the earth. Chances are, your path will cross with someone at your company again. Stay professional and do not bad mouth people before or after you leave. You never know when you will need a reference, a contact, or help in the future.
In the last six years, I have worked for three companies. The two experiences I had with resigning were on different ends of the spectrum. Talking about leaving a company and resigning can be professional taboo. When I was considering leaving ExxonMobil, I did not reach out to any of my local professional friends or MBA classmates for many reasons, but the biggest one was fear of judgment. ExxonMobil was, and still is, one of the most highly respected oil and gas companies in the world. They have a very tough recruiting process and rarely bring in experienced hire. I feared what people would think if I told them I was considering leaving my job with a Fortune 2 company. (ExxonMobil was number two behind Wal-Mart in 2016.) I know many people have fears and concerns about making a big life-changing decision like switching companies, so I thought I would
share my experience. Stay tuned for the next post!