You Have Received an Offer from a Company: Taking Things Ahead

You have received one or more job offers. What next?

1. Evaluate the profile(s): This includes several factors. These factors have been listed in an earlier post (click on the link to open): Factors to be Considered While Taking up a Job/Profile.
   
2. Check the CTC being offered (read my post on the difference between CTC & 'take-home'). Insist on a break-up of the same giving details of its constituents. Negotiate on it - never accept the first offer. There is always scope for improvement. Besides salary, check other perks you will get like a transport allowance, mobile phone allowance, etc. (as components of your CTC and not as profile related facility). The amount will vary depending on the profile. Check if you can change the break-up of the proposed CTC to save taxes.
   
3. Check the designation you are being given and negotiate on it, if required.
4. Read the offer letter carefully to understand the implication of each point in it. Try to read between the lines.
5. Take into consideration the distance of your home to the office and the time and cost implications it has.
6. Check the joining date expected of you and see if you are comfortable with it.
   
7. Check whether the company works 5 days a week or 6.
8. Inquire if the company has a formal 'employee rewards and recognition' program. Good professionally run companies have one.
   
9. Inquire about the dress code.
10. Request for a copy of the internal rules and regulations of the company including its leave policy, medical policy and other details.

Decide on the one which seems the best after considering each profile against the points mentioned in the post above.

1. On acceptance of the offer letter and on joining, the company must give you an appointment letter which confirms the appointment as well as mentions other important points in detail.
2. Ensure you fill up the Providend Fund Form which is a mandatory requirement (only for individuals earning basic pay Rs. 6,500 and below. PF is not mandatory for individuals earning earning basic pay above that amount). The employer has to match your contribution presently fixed at 12% of your basic salary (this point must as it is be mentioned in your offer letter/CTC break-up).
   

The Difference Between your CTC and your Take-Home

I have interacted with as well as heard of several officers who were promised a big CTC and ended up getting but a fraction of that amount in their bank account.

Terms defined:

1. CTC: This is an acronym for 'Cost to Company'. It literally means what your employment is costing the company you are working with or plan to work with. This could besides your salary and allowances also include mediclaim premiums and other benefits the company provides you but doesn't translate into any cash flow in your hands.
   
2. Take Home: This is that part or component of your CTC which you actually get in your hand or as good as getting in your hand (like a driver, house rent, petrol allowance, use of company car, etc.).

Different companies have different ways of computing an employees CTC and the break up of the same consists of different things like basic salary, HRA, medical allowance, lunch reimbursement (sodexo or other coupons), PF, etc. No company intentionally tries to give you a wrong picture. Policies differ widely from company to company. Due to inadequate knowledge officers sometimes don't check the pertinent details or get the correct picture.

Check your take-home salary after you receive an offer from a company. In case the company does not give you a break-up of the same, ask for it. Also, speak to someone you know in the corporate sector or write to me. Additionally, the take-home component can be increased by optimizing different aspects of the CTC and can make a big difference in the final figure. Be sure to do this.

A word of caution. Several companies, especially small ones provide a big cash component as part of their package but not in writing in their CTCs like a driver, rented apartment, fuel allowance, etc. This is to save taxes and other reasons. While this is certainly part of your take home and can make life quite comfortable please be careful of this practice. The next company you move to might not acknowledge that part of your salary and negotiate for a hike only on the component that is mentioned in writing in your offer/appointment letter.