Author Topic: HCOL VS MCOL Job  (Read 6195 times)

tvan

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HCOL VS MCOL Job
« on: October 08, 2015, 01:50:41 PM »
I currently live in Orange County. Started talking to this Midwest (Iowa) company and they insist I send them my salary requirements. I know you are not supposed to throw out the first number but in having trouble adjusting for cost of living.

Current Situation:in HCOL area:

Salary - 88k
Bonus 10% of annual (I have always gotten closer to 12-15% for 6 years that I have been here)
401k match - 8%
HSA company contribution $500/yr
4 weeks vacation (I have 240 hours built up)
2 weeks sick time
If I leave here I will have to payback a 10k moving bonus that was given to me.

New Situation:

No clue.  But I'm trying to figure my break even point. I figure on average most costs are about 10% lower in the MCOL area except for housing.

Rent in OC - 2k/month for a 700 sq ft apartment
Rent in MCOL area - I could actually buy a 200k house for about 1600 a month. With Windows and a yard lol.

My salary plus 401k match plus bonus (10%) equals $105,375 per year.

Assuming the MCOL area is 10% less (likely more) on average plus it saves $4800 per year on housing an equivalent salary would be:

(105375 * .9) - 4800 = $90038.

Am I missing anything? 

One more interesting note is that I was paid to love to Orange County from the same MCOL place and given a 30% raise to do it.

terran

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Re: HCOL VS MCOL Job
« Reply #1 on: October 08, 2015, 01:58:10 PM »
http://money.cnn.com/calculator/pf/cost-of-living/ says Orange County vs Des Moines => 105k = 65.5k

http://www.numbeo.com/cost-of-living/comparison.jsp might be helpful too.

I'm a red panda

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Re: HCOL VS MCOL Job
« Reply #2 on: October 08, 2015, 02:14:39 PM »
Where in Iowa? That makes a VERY big difference.

AZDude

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Re: HCOL VS MCOL Job
« Reply #3 on: October 08, 2015, 02:16:58 PM »
Do you want to move(back?) to Iowa?

Assuming you dont care, and are just looking for the best deal, financially, then ask for your current compensation. They will probably freak out, but if they like you then they will try to negotiate down.

seattlecyclone

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Re: HCOL VS MCOL Job
« Reply #4 on: October 08, 2015, 02:32:35 PM »
Do you want to move(back?) to Iowa?

Assuming you dont care, and are just looking for the best deal, financially, then ask for your current compensation. They will probably freak out, but if they like you then they will try to negotiate down.

This seems like a good starting point. If you mention what your current compensation is, they may just be willing to pay it! If not, by making a relatively high opening bid you're probably giving yourself the best chance of getting the best offer they're willing to put forth.

tvan

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Re: HCOL VS MCOL Job
« Reply #5 on: October 08, 2015, 05:07:52 PM »

Do you want to move(back?) to Iowa?

Assuming you dont care, and are just looking for the best deal, financially, then ask for your current compensation. They will probably freak out, but if they like you then they will try to negotiate down.

This seems like a good starting point. If you mention what your current compensation is, they may just be willing to pay it! If not, by making a relatively high opening bid you're probably giving yourself the best chance of getting the best offer they're willing to put forth.

This was actually my plan (ask for what I  get now).

I like where I live a lot. But my fiancÚ would rather move back home (closer to family). So balancing everything I'm sort of indifferent. So financials could tip the scale for one or the other.

I already insinuated I'd  want them to cover that moving bonus is have to pay back.

I have also been telling them throughout the process that I really love my current job. Their opportunity is not something I even need.

tvan

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Re: HCOL VS MCOL Job
« Reply #6 on: October 08, 2015, 05:12:40 PM »

Where in Iowa? That makes a VERY big difference.

Des Moines

tvan

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Re: HCOL VS MCOL Job
« Reply #7 on: October 08, 2015, 05:16:48 PM »

http://money.cnn.com/calculator/pf/cost-of-living/ says Orange County vs Des Moines => 105k = 65.5k

http://www.numbeo.com/cost-of-living/comparison.jsp might be helpful too.

I hate these calculators but that numbeo one is pretty cool. Thanks

I'm a red panda

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Re: HCOL VS MCOL Job
« Reply #8 on: October 08, 2015, 05:56:46 PM »
Desmoinesmetro.com has an excellent COl calculator also.

It suggests you'd need 60% of your salary to live at the same standard. I think the strategy to ask for 100% and let them take it from there might be reasonable or go with 90% to how you see the difference in COL.

Des Moines is a lot less expensive than Iowa City though (it is the lowest cost of living of major cities in Iowa) so depending on what you do and how badly they want you, I'm not sure how highly compensated you could really expect to be. You could easily get a nice house for very little though.
« Last Edit: October 08, 2015, 06:05:36 PM by iowajes »

tvan

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Re: HCOL VS MCOL Job
« Reply #9 on: October 08, 2015, 08:36:04 PM »
Is it appropriate to ask for their benefit and 401k plan information before I am even offered the job? 

I haven't tested the job market in 8 years so in rusty as to the order of these things.

Cathy

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Re: HCOL VS MCOL Job
« Reply #10 on: October 08, 2015, 08:45:05 PM »
This thread again illustrates nicely how "cost of living" (more accurately, "cost of housing") is partially a matter of perception. There are places in the United States where $2000 per month for a 700 square foot apartment is very cheap. That would be more like $3500 per month in certain areas. Rather than worrying about popularly attributed "cost of living", look at how much housing actually costs in the specific area where you plan to move to and compare that to the specific costs you pay now. It seems like you are already doing that, so you are on the right track in terms of comparing the numbers.

However, assuming you are indeed going to comply with their salary request gimmick (which you should not do), I can think of no good reason to derive a number by adjusting your current salary by the target housing cost. Rather, you should determine what you are worth on the free market in the target region, and then ask for something a lot higher than that.
« Last Edit: October 08, 2015, 08:47:54 PM by Cathy »

tvan

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Re: HCOL VS MCOL Job
« Reply #11 on: October 08, 2015, 08:50:50 PM »

This thread again illustrates nicely how "cost of living" (more accurately, "cost of housing") is partially a matter of perception. There are places in the United States where $2000 per month for a 700 square foot apartment is very cheap. That would be more like $3500 per month in certain areas. Rather than worrying about popularly attributed "cost of living", look at how much housing actually costs in the specific area where you plan to move to and compare that to the specific costs you pay now. It seems like you are already doing that, so you are on the right track in terms of comparing the numbers.

However, assuming you are indeed going to comply with their salary request gimmick (which you should not do), I can think of no good reason to derive a number by adjusting your current salary by the target housing cost. Rather, you should determine what you are worth on the free market in the target region (and then ask for something a lot higher than that).

Housing is the biggest difference. So I agree. A 700 sq foot apartment there is  well under 1k a month.  But you also have to consider that we would want a better place in the Midwest because the weather is terrible. In Orange County you can be outside year round so a small apartment isn't as big of deal.

Having said that I know I'm worth at least $83,160 because that's what I was getting paid there (including bonus and 401k) before moving to Orange County.

So I don't think asking for 105k (including 401k/bonus) is too unreasonable.


I'm a red panda

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Re: HCOL VS MCOL Job
« Reply #12 on: October 09, 2015, 06:50:45 AM »
Is it appropriate to ask for their benefit and 401k plan information before I am even offered the job? 

I haven't tested the job market in 8 years so in rusty as to the order of these things.

At least in my industry, this information is standard to anyone interviewing. I have always been given this by HR when I come in for an initial interview.  I would NEVER make a job decision without knowing this, and waiting until the offer seems late.

tvan

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Re: HCOL VS MCOL Job
« Reply #13 on: October 09, 2015, 09:48:58 AM »

Is it appropriate to ask for their benefit and 401k plan information before I am even offered the job? 

I haven't tested the job market in 8 years so in rusty as to the order of these things.

At least in my industry, this information is standard to anyone interviewing. I have always been given this by HR when I come in for an initial interview.  I would NEVER make a job decision without knowing this, and waiting until the offer seems late.

I thought so too. I'm going to ask.

tvan

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Re: HCOL VS MCOL Job
« Reply #14 on: October 11, 2015, 05:55:55 PM »
All I got back is a "we will get back to you". Lol guess it is the weekend.

Exflyboy

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Re: HCOL VS MCOL Job
« Reply #15 on: October 11, 2015, 06:35:36 PM »
yes as an opener I would definitely add up everything you make bonuses, HSA contributions etc.. and offer them that.

You don't HAVE to move after all so why go in cheap?..:)

rmendpara

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Re: HCOL VS MCOL Job
« Reply #16 on: October 11, 2015, 07:07:13 PM »
Yes, as mentioned above, unless you want to move for personal reasons in the near future, it would be best for your career (and wallet) to take your time and go back when the right opportunity comes along.

It would appear that you would "break even" at around 10% below what you make today. If possible, I'd try to negotiate a small raise which would be double the benefit (more money and lower COL). Presumably they need your skills otherwise they would just hire someone locally and not pay for relocation or coming from your higher salary range. Don't be greedy, but also don't let them take advantage.

If you are familiar with the job and would legitimately consider moving for it, you could state what you would be willing to accept rather than your current salary. It's honest, and lets them know that they need to be in the right range or just not waste both of your time. "I would be interested to consider a total comp package of 110k+, but would like to understand the breakdown of base, bonus, and benefits if we feel there is mutual interest in moving forward." This at least gives them an idea of the ballpark that you are playing in, but doesn't give away a ton of info either. They actually have no idea what you currently make, though a reasonable guess is probably a bit less.

For what it's worth, I work in finance and have no issue at all telling recruiters what I make. "I'm currently at a base of 90 with bonus and benefits totaling 105. I understand there may be differences in COL by location, but I'd be looking for 100-115 in total comp for XYZ position in that location depending on the details. If it makes sense for us to continue, I'd love to be considered."

To be clear, I've had some people not call back, though it could have been for other reasons like finding another candidate that was a better fit, but I also find it wastes less of my time. Early in my career, I went on a few too many interviews only to find that their ability/willingness to pay was significantly less than what I expected, and declined offers twice since they couldn't get up to what I needed to make a move. It wasted everyone's time. In this case, giving a moderate but reasonable range of what you want is just a good way to keep people informed. If they come back and don't offer enough, then ask for more. If they refuse, then politely decline. No harm done.

tvan

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Re: HCOL VS MCOL Job
« Reply #17 on: October 14, 2015, 09:19:11 AM »
Got the job offer.

Here's the details:

Current Situation:
in HCOL area:

Salary - 88k
Bonus 10% of annual (I have always gotten closer to 12-15% for 6 years that I have been here)
401k match - 8%
HSA company contribution $500/yr
4 weeks vacation (I have 240 hours built up)
2 weeks sick time
If I leave here I will have to payback a 10k moving bonus that was given to me.

New Situation:

Salary 90k
Bonus UP TO 15% of annual
401k match 4%
Health care plan sounds standard
18 days vacation/sick per year
10k moving bonus
3k bonus in first quarter assuming certain metrics are met

Thoughts?  Remember new situation is in a low/medium COL area so getting close to equal pay is a big bonus.

I'm a red panda

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Re: HCOL VS MCOL Job
« Reply #18 on: October 14, 2015, 09:46:19 AM »
Sounds like a pretty good offer to me.

But- do you want to live in Des Moines?
It isn't so outstanding that it "forces" the move, IMO.

tvan

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Re: HCOL VS MCOL Job
« Reply #19 on: October 14, 2015, 10:28:30 AM »

Sounds like a pretty good offer to me.

But- do you want to live in Des Moines?
It isn't so outstanding that it "forces" the move, IMO.

That's what I'm not sure about. I'm indifferent to living there. The cold sucks. But I think the money counters that.
I like living in Orange County. Long term I do t know if it's as good of place to buy a home and raise kids should we decide to have them.

seattlecyclone

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Re: HCOL VS MCOL Job
« Reply #20 on: October 14, 2015, 11:06:02 AM »
You would be taking a cut on time off, but it seems like you don't use all you have right now, so that might not be a big deal. You would be able to get to FIRE quite a bit more quickly. How badly does your fiancÚ want to move back to Iowa someday? If she won't be happy living far from family for the long term, especially if you have kids, moving someday might be a forgone conclusion. If that's the case you may as well do it now and get a head start on your savings.

tvan

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Re: HCOL VS MCOL Job
« Reply #21 on: October 14, 2015, 11:09:24 AM »

You would be taking a cut on time off, but it seems like you don't use all you have right now, so that might not be a big deal. You would be able to get to FIRE quite a bit more quickly. How badly does your fiancÚ want to move back to Iowa someday? If she won't be happy living far from family for the long term, especially if you have kids, moving someday might be a forgone conclusion. If that's the case you may as well do it now and get a head start on your savings.

Yeah I generally like working a lot at this moment in my life. Maybe because I don't have kids.

I have 240 hours of vacation my current employer would have to pay out if I left.
Plus about 200 sick time. Not sure I'm never sick. Knock on wood.

charis

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Re: HCOL VS MCOL Job
« Reply #22 on: October 14, 2015, 11:34:09 AM »
Doesn't the moving bonus cancel 10K one that you have to pay back to your current job.  I would ask them to pay that.

tvan

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Re: HCOL VS MCOL Job
« Reply #23 on: October 14, 2015, 11:35:48 AM »

Doesn't the moving bonus cancel 10K one that you have to pay back to your current job.  I would ask them to pay that.

Yes it cancels the one I would have to pay back.

So that's a net zero. It doesn't cost us a lot to move though. We will pack up two cars and drive. So gas. A night or two at a cheap hotel.

charis

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Re: HCOL VS MCOL Job
« Reply #24 on: October 14, 2015, 12:11:48 PM »

Doesn't the moving bonus cancel 10K one that you have to pay back to your current job.  I would ask them to pay that.

Yes it cancels the one I would have to pay back.

So that's a net zero. It doesn't cost us a lot to move though. We will pack up two cars and drive. So gas. A night or two at a cheap hotel.

Yes, but it is not really a bonus for you.  If that's all you were hoping for, then it works out fine.

AZDude

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Re: HCOL VS MCOL Job
« Reply #25 on: October 14, 2015, 12:35:19 PM »
If you are indifferent about where you live, it seems like a good deal. Also remember to negotiate, if you have not already. That might not be their best offer. Just don't ask for more, get it, and then say no thanks. At least, don't if you ever want to have a chance at working there in the future.