How to Weigh Offers of Pay vs. Prestige

by | March 31, 2009

A few years ago, accountant Will Kelly faced a tough decision. About to graduate from business school in Alabama, he was weighing whether to sign on with a big-name international accounting firm, or a small, little-known local firm that offered higher starting pay.

"It's a huge decision," says the 25-year-old Birmingham, Ala., resident.

Big name or big paycheck? It's a dilemma many job-seekers have faced, whether they're graduating from school, job-hunting while unemployed or simply seeking greener pastures.

Often the big names come with the biggest paychecks. But sometimes, smaller firms dangle heftier paychecks in front of prospective hires to make up for what the employers lack in prestige.

A big name looks good on your risumi and may offer more stability and training than a small firm. But the lure of the big paycheck is strong, and sometimes a less prestigious firm might offer you more responsibility earlier in your career.

Some career counselors say job decisions usually shouldn't be based on the money or the name. Instead, these advisers say other factors are more important -- such as how much you like the work and what opportunities you will have to advance.

"Based on the job requirements, which one is more attractive to you?" says Lynn Berger, a career counselor in New York City. "Which one is gong to capture more of your interests and your skills?"

If the jobs seem equally appealing in terms of duties, think about what you're trading for money. Is the pay difference so great that you'll be angry if you accept the lower-paying post? "You don't want to go to work every day angry -- that's definitely going to influence your performance," says Barbara LaRock, a career coach based in Reston, Va.

If the money is a big obstacle, try to use the higher-paying offer as a way to negotiate for a bigger salary, she suggests. Or negotiate for other compensation besides salary, such as more vacation, increased benefits, a signing bonus, stock options or an accelerated review that might lead to a raise.

Career counselors differ on the merits of small firms and big firms. Brad Karsh, president of JobBound, a Chicago career-counseling service, suggests that a young person starting a career should go to the bigger company. It will likely offer more opportunities for training and development, which he says are more valuable than a few thousand dollars more in annual salary.

But Lori Davila, a career coach in Atlanta, says a smaller company could offer more leadership opportunities and wider duties. "Potentially, you could wear a lot more hats and it could make you even more marketable later on," she says. "The level of the position you have and the level of responsibility and the accomplishments are really what employers are drawn to today."

To help make his decision, Mr. Kelly, the Alabama accountant, consulted one of his professors. The professor, who had previously worked at a big accounting firm, encouraged Mr. Kelly to follow the same path. The training and experience he'd get at the firm would dwarf any disadvantage in starting pay, the professor argued. Mr. Kelly also reasoned that the international firm would have higher-profile clients with more complex accounting issues, and that the career opportunities would be broader, including work overseas. Plus, the salary difference between the offers was relatively small -- just a few thousand dollars.

For Mr. Kelly, the choice became clear. "It wasn't just about the money, it was about the experience," he says. He's been at the big accounting firm for two years and is confident he made the right decision.

Cathy Park, a 22-year-old in New York, faced a similar choice. Fresh out of college, she sought a job in finance. She got two offers -- one at a well-known financial house that offered her a salary around $57,000, and the other at a small hedge fund that offered about $65,000. Both jobs offered bonuses that seemed roughly similar in value.

She liked the pay at the hedge fund. With so few employees there, she thought she'd get more responsibility sooner. But she worried about the prospects for the relatively new fund. She didn't want to risk her young career on a small firm with perhaps an uncertain future.

The established firm offered more stability. But there was a significant disadvantage: the hours. In exchange for that name on her risumi, Ms. Park would have to sacrifice 80 to 100 hours a week. "That wasn't really what I was looking for," she says.

Ultimately, she decided that neither a big name nor a big paycheck was enough to counter her other concerns about the jobs. She passed on both offers and is doing temp work while looking for a different job.

Filed Under: Job Search


High net worth individuals (a.k.a. rich people) Improving Verbal Skills to Enhance Credibility

Vault welcomes your views. Please stay on topic and be respectful of other readers. Review our User Guidelines.

blog comments powered by Disqus

Become a Vault Basic Member

Complete your Vault Profile and get seen by top employers

SALARY FINDER

SALARY FINDER

Health Service Administrator

  • $0
  • 25
  • 50
  • 75
  • 100
  • 100+
Yearly Salary Range (US$ Thousands)