Guide: How to Evaluate a Job Offer

Difficulty: Medium Time Required: 2–4 hours of research and analysis

Receiving a job offer is exciting, but making the wrong decision can set back your career and finances for years. Salary is important, but it's only one piece of a much larger picture. This guide walks you through systematically evaluating every aspect of a job offer—compensation, benefits, culture, growth potential, and lifestyle factors—so you make an informed decision you won't regret.

What You'll Need

Materials:

• Written job offer letter with all terms
• Spreadsheet for comparing offers (if evaluating multiple)
• Calculator for benefits and compensation analysis
• Access to Glassdoor, LinkedIn, and company research sites
• List of your priorities and non-negotiables

Prerequisites:

• At least one job offer in hand
• Understanding of your current compensation and benefits
• Knowledge of market rates for the role
• Clear career goals and values
• Time before offer deadline (request extension if needed)

Step-by-Step Instructions

Step 1: Request the offer in writing with deadline extension

Never make a decision based on a verbal offer. Request everything in writing:

• Base salary
• Start date
• Title
• Reporting structure
• Benefits summary
• Bonus structure
• Equity details
• Any special terms

Ask for at least 3–5 business days to review, more if you're evaluating multiple offers. Professional employers expect this—it's a major life decision, not an impulse purchase.

Step 2: Calculate total compensation, not just salary

Base salary is only part of your compensation. Add:

• Annual bonus (multiply by likelihood of actually receiving it)
• Signing bonus (one-time)
• Equity/stock options (research current value and vesting schedule)
• 401(k) match (often 3–6% of salary)
• Health insurance value (if employer pays most premiums, this is worth $5,000–15,000 annually)

A $90,000 salary with great benefits often beats $100,000 with poor benefits.

Step 3: Evaluate health insurance and healthcare benefits

Compare:

• Monthly premiums (your cost)
• Deductibles (what you pay before insurance kicks in)
• Out-of-pocket maximums
• Covered services

Check if your doctors are in-network. Include HSA or FSA availability. A plan with $200/month premium and $1,000 deductible is far better than $50/month premium with $6,000 deductible.

Step 4: Assess retirement benefits and match

Look at:

• 401(k) or 403(b) match percentage and vesting schedule
• Common match: 50% of your contributions up to 6% of salary (e.g., $2,400 free money annually on $80,000 salary)
• Vesting: immediate (you keep it if you leave) or gradual over 3–5 years
• Additional benefits: pension plans (rare but valuable), stock purchase programs

Step 5: Calculate paid time off and work-life balance

Add up all PTO:

• Vacation days
• Sick days
• Personal days
• Holidays

The standard is 10–15 vacation days plus 10 holidays (20–25 total days off). Research actual work culture—do people use their PTO or feel pressured not to? Check Glassdoor reviews for work-life balance, overtime, and weekend expectations.

Step 6: Research company stability and growth potential

Investigate:

• Company’s financial health, recent news, industry position
• Public companies: stock performance, recent earnings
• Startups: funding rounds and investors
• How long the company has existed
• Whether they're growing or shrinking
• Recent layoffs and leadership changes

A 20% higher salary at an unstable company isn’t worth it if you’re laid off in six months.

Step 7: Evaluate career growth and learning opportunities

• Ask about promotion timelines and requirements

• Research how long people stay in the role you’re offered

• Check for professional development:

  • Training budget
  • Conference attendance
  • Tuition reimbursement
  • Mentorship programs

A role with clear advancement beats a dead-end position even at higher pay.

Step 8: Assess commute and location logistics

• Calculate actual commute time during rush hour

• Factor in commute costs:

  • Gas
  • Parking ($100–400/month in cities)
  • Tolls
  • Vehicle wear and tear
  • Public transit passes

A $5,000 salary increase that adds 90 minutes of driving each way quickly vanishes when accounting for costs and lost personal time.

Step 9: Evaluate company culture fit and values

• Review the company's mission, values, and public statements

• Read Glassdoor and Indeed reviews for insights on culture, management, and day-to-day life

• Reflect on your interview experience:

  • Did you feel respected and valued?
  • Were interviewers professional and prepared?

A toxic culture destroys mental health—no salary can make up for daily misery.

Step 10: Create a decision matrix if comparing multiple offers

• List all important factors:

  • Salary
  • Total compensation
  • Benefits
  • Commute
  • Growth potential
  • Culture
  • Work-life balance
  • Learning opportunities
  • Job security
  • Company mission

• Rate each job 1–10 on each factor

• Apply importance weightings if needed

• Add up scores

This structured approach helps you make a rational decision aligned with your long-term goals.

Common Mistakes to Avoid

• Focusing only on base salary: Two people with the same $80,000 salary can have vastly different compensation. Always calculate total compensation, not just the number in the offer letter.
• Accepting immediately without negotiation: Employers expect negotiation. Even if you plan to accept, ask for 3–5 days to review and consider countering with data. Most people leave $5,000–15,000 on the table by skipping this.
• Ignoring red flags because of desperation: If something feels off—disorganized interview process, high turnover, defensive responses—trust your gut. These issues usually worsen post-hire.
• Not researching the actual manager and team: You work for a person, not just a company. Meet your potential manager and teammates. Ask directly about management style and team dynamics.
• Forgetting to factor in cost of living: Use cost of living calculators to compare offers in different cities. A $100,000 salary in New York isn’t the same as $100,000 in a smaller city with lower taxes and expenses.

Pro Tips

• Get a verbal deadline extension before asking for more time: Say, "I'd like a few days to review everything carefully with my family and financial advisor. Is a week reasonable?" Most employers will say yes.
• Use the "what would make you say yes immediately" technique: If leaning toward declining, say what’s holding you back—salary, commute, etc. Recruiters may offer unadvertised perks if you voice your concern.
• Calculate your effective hourly rate: Divide salary by actual hours worked. A $90,000 job at 60 hours/week pays $30/hour—not $43/hour. This changes how “high salary” jobs are perceived.
• Ask about first-year total compensation: Include any first-year-only bonuses or benefits in your evaluation. What looks like $95,000 might be $85,000 long-term.
• Request a pre-start conversation with your future manager: Schedule a 30-minute call to discuss expectations, projects, and team dynamics. If they won’t make time, consider it a yellow flag.

Related Skills

• How to Negotiate a Salary
• How to Prepare for a Job Interview
• How to Plan a Career Path
• How to Create a Monthly Budget