As the unemployment rate rate dips and the job market takes a turn for the better, job offers are likely to be doled out more frequently. Although it's an exciting moment when you've been offered a job in finance, don't let it go to your head without taking a few things into consideration first.
Accepting a job offer with little to no evaluation may send you back to the job search faster than you would think -- and just because you've received an enticing offer doesn't always mean you should jump on it. Here are six things to ask yourself before you accept:
1. Does the firm's investment risk match your own?
If you're considering a buy-side finance role, it's important to address your investment risk tolerance. For instance, if you're typically drawn to the "steady as you go" investment attitude of a risk averse asset manager, you may not be well suited for the "maximize alpha" goals of a hedge fund. Be sure you've calculated the investment risk of both the firm and role before you make your final decision.
2. Who are the rainmakers at this organization?
Before securing your finance offer, you need to understand who's driving the deal flow. Take some time to research the managing directors or partners at the firm. What's their reputation like? How about client relationships? How are they bringing in business?
At investment banks and private equity firms, these are the people who will not only determine deal flow -- which equates to overall success of the firm -- but they will also be your mentors and potential finance career sponsors. If you're not comfortable aligning yourself with them, then this isn't the path most suited for your career.
3. What's the fund's performance track record?
If you're looking at a new hedge fund or asset manager, it's in your best interest to take a look at their recent fund performance. Have they under or overperformed compared to their peers? In this market, yesterday's winners aren't always today's superstars. Don't make a decision based on the reputation of the firm alone -- take the time to see how they're doing in today's market.
4. Does the structure of the compensation package meet your needs?
Compensation packages vary from company to company. Don't jump at an offer before understanding what you're receiving. In fact, investment banks have recently began inflating base salaries while providing lower bonuses. On the other hand, private equity firms and hedge funds tend to structure employee compensation with smaller bases and larger pay-for-performance incentives. Nail down what type of package you're most motivated by and try not to waver.
5. Do you prefer a small firm or big firm mentality?
All finance firms aren't created equally. Therefore, it's crucial that you understand what taking on a role at a big vs. a small firm truly entails.
For example, larger firms often come with added resources and cushy compensation packages. This may sound enticing, but there is also less autonomy and the ability to determine your own destiny.
Smaller firms tend to run on leaner deal teams and could have boom-or-bust deal flows. On a positive note, there is typically more room for employees to exhibit control over their success.
6. Are you passionate about the work?
Look past the idea of simply landing a finance job and take a moment to consider whether this type of work is something you're truly passionate about today and looking into the future. Don't accept an offer simply because it has a better title or bigger paycheck.
In a recent interview I had with Jeffrey Leeds, President and Co-founder of Leeds Equity Partners, he shared some insight into the importance of passion in your financial services career. "Are you really going to love three o'clock in the morning looking at a spreadsheet on a flickering computer screen? If the answer is yes -- that's what's going to make your work extraordinary," said Leeds.
Staying passionate, engaged and motivated in your role is essential to your long-term success in finance.
Accepting a finance job offer shouldn't be an immediate decision. Take these questions into consideration before you accept.
What's one thing that would make or break a job offer for you?