Best Practices to Ensure Success When Switching Leadership Roles: Part II - Doing the Math

Part II – Doing the Math is part of a five-part series 

In Part I of this series, we covered whether or not you can make a marketing leadership change without losing your full compensation, including salary and other financial incentives. In this article (Part II), we’ll help you consider if there’s a right time of the year to change roles to soften your total compensation impact by “doing the math.”

In addition to the 401(k) matching or profit-sharing vesting schedules I covered in Part I, there are a few other factors that contribute to the benefits you could be leaving on the table if you leave your current role, including:

  • Bonuses
  • PTO payouts
  • Flexible spending account funds
  • Healthcare insurance

Factors Impacting Yearly Compensation

For each of the five elements mentioned above, we’ll share variations of how each can impact your overall compensation and provide examples for consideration.


As we mentioned in Part I, your 401(k) or profit-sharing structure could be laid out in several ways depending on your employer – that’s why it’s so important to consider this as you are doing the math. Further, there may be new changes to your plan that occurred in response to the Covid-19 pandemic. With that said, these are the top things you should know about your plan:

  • Does your employer provide a 401(k) match? If so, up to what amount?
  • Does your 401(k) or profit-sharing plan have a cliff or graded vesting schedule?
  • What is the frequency of your match deposit (payroll period, quarterly, monthly, annually, or other)?
  • If you have a stock plan, the type of stock you have (restricted stock, performance awards, or stock options), and the stock rules if you decide to leave the company.

Here’s a brief example of a vesting period for a 401(k) plan: Let’s say your employer’s 401(k) contribution match vests evenly over four years.

  • At the end of Year 1: you’d own 100% of your personal contributions and 25% of the contributions made by your employer. If you left your role:
    You’d take 100% of your personal contributions and 25% of your employer’s contributions with you.
    Your employer would take 75% of their contributions back.
  • At the end of Year 2: you’d own 100% of your personal contributions and 50% of the contributions made by your employer. If you left your role: You’d take 100% of your personal contributions and 50% of your employer’s contributions with you.
    Your employer would take 50% of their contributions back.
  • At the end of Year 3: you’d own 100% of your personal contributions and 75% of the contributions made by your employer. If you left your role: You’d take 100% of your personal contributions and 75% of the contributions made by your employer with you.
    Your employer would take 25% of their contributions back.
  • At the end of Year 4: you would own 100% of your personal contributions and 100% of the employer contribution match. If you left your role:
    You’d take 100% of your 401(k) with you.


Bonuses also need consideration before deciding to switch roles.

If you received a signing or relocation bonus from your current employer, there might be requirements that you stay with the company for a specific timeframe or will be required to pay back some or all of that money.

If you’re contemplating a change before the review cycle—or in some cases, before an already promised bonus is paid out, you may be forfeiting that money.

These are just two examples; there are several other types of bonuses you may be eligible to receive. Additional bonuses may include:

  • Signing Bonus
  • Annual Bonus
  • Discretionary Bonus
  • Profit-sharing Bonus
  • Retention Bonus
  • Holiday Bonus
  • Referral Bonus

The best source to find your full list of bonuses is in your offer letter or benefits package. Consult your documentation to determine specifics concerning whether the company will pay any earned bonuses after leaving the company.

PTO Payouts

Paid time off (PTO) is another area that you’ll want to consider before switching roles. Some states have paid time off payout laws that require an employer to pay out remaining PTO balances; other states do not. Depending on your state and company benefits, you may leave valuable PTO on the table if you don’t account for it before switching positions, especially since it’s not uncommon for companies to have PTO policies that accrue over the calendar year.

For example, if you leave your position mid-fiscal year (say, July), you may only be entitled to a payout for half your annual allotment, less any time you’ve already taken.

Your company’s employee benefits package is often the best resource to determine how the company will evaluate your PTO if you switch roles.

Flexible Spending Account Funds

Flexible spending accounts (FSAs) are another consideration as you’re doing the math on your total compensation. FSA account funding often uses your pre-tax dollars for later use with either medical or child care expenses. The accrual of these accounts is often different depending on the account type.

For example, medical FSA’s full-year balances are usually available from the start of the year, while child care FSA balances are traditionally available on a real-time basis.

In most cases, FSA coverage ends the date of your termination or at the end of the month of your termination. Therefore, taking account of your FSA balances, credits and overages is an essential step in preparing for a career switch. You’ll want to strive to utilize available FSA funds before leaving your position and submit outstanding claims before the eligibility window closes.

Your current year benefit enrollment document is often the best resource to refer to when determining how your company will handle your FSA if you switch roles. However, there may have been changes to how you can use your FSA  due to the Covid-19 pandemic. I recommend you consult the contact responsible for your FSA plan to see if there have been any changes.

Healthcare Insurance

Healthcare insurance is an essential factor to consider when switching roles and as you are doing the math on the impact on your compensation. Are you responsible for your healthcare plan? Do you hold the healthcare plan for your family?

If you are responsible for a single plan or a family plan, signing on to a new healthcare plan mid-year often means starting from zero on spending towards deductibles and out-of-pocket maximums. Depending on your healthcare usage, that reset could lead to a significant financial impact.

There are additional factors beyond finances  to be considered here, too:

  • The continuity of care depending on you or your family’s healthcare needs
  • Potential gap or time-lag in healthcare coverage How a new company’s healthcare plan will align with your current healthcare providers

For example, if some of your current healthcare providers will no longer be in-network with your new healthcare plan, you may need to pay higher out-of-pocket expenses to see the same providers or may need to change providers to stay in-network.

The best resource to determine the impact of switching healthcare plans mid-year is the new company’s benefits package and potentially digging deeper into their healthcare offerings.

Determining The Right Time to Switch Positions

Doing the math on the best time of year to switch roles can be complicated; however, you put yourself in the driver’s seat when you start by considering total compensation factors and have a plan.

Our recommendation:

  1. Determine the impact switching roles will have on your total overall compensation for the year.
  2. Do the math for Q1, Q2, Q3, and Q4 as you account for each element outlined in the section above.
  3. Share this information with your recruiter (if you’re using one), so they can help you recoup any lost compensation on the hiring side.

You’ll also want to consider one additional major piece of this puzzle: how long will it take you to find your next opportunity? Stay with us on this journey to learn more about the estimated job search timeline in Part III of this series, The Hiring Cycle.

Read the entire series –
Parts  I: Challenges | II: Doing the Math |  III: Hiring Cycle | IV: Finding the Next | V: Negotiation

Looking to connect regarding new opportunities or a hiring need? Contact us today!

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