Indifference Curves: Compare Job Offers With The Job Payoff Index (Israeli Version)

Free Tool: Compare Job Offers With The Job Payoff Index (Israeli Version)

A tool that helps you compare Israeli salary packages so you can make the best job search decisions.

This a guest post by Jonathan Degani. If you’d also like to guest post here on JobMob, follow these guest post guidelines.

Disclaimer: I am not a certified accountant, nor financial adviser. The information here should not be understood legally as financial advice. Any posts about financial stuff are based on whatever tax websites I see from the Israeli government. Some information could be flawed; I’m only human. I am always open to corrections, new ideas, and new opinions.

What is an Indifference Curve?

A few months ago, a friend was telling me about his job search.

“I know exactly what I want,” he told me. “I want to earn X shekels and get a company car.”

“But what if you earn a bit more and don’t get a car?” I asked.

“Possibly,” he responded, “but it would have to be at least 500 shekels more.”

In this conversation, my friend and I were actively illustrating his indifference curve regarding the compensation he was looking for in his upcoming job. For example, one may accept a lower salary for a higher pension or one may accept a higher salary but no company car.

In Israel especially, an indifference curve is no small matter. As you venture through the Israeli job market, you’re going to hear a lot about tanaim (literally, ‘conditions' i.e. compensation benefits).

Tanaim refer to all the stuff you get in addition to your salary. Tanaim include, but are not limited to:

  • holidays
  • vacation days
  • a sick leave policy
  • membership in a pension plan
  • additional investments
  • summer vacation bonus
  • a company car
  • and more…

Some companies give more tanaim, some give less and some give none (legally there is a minimum, but without getting into the “legalese,” there are tremendous loopholes in the law that allow employers to get around it.)

In order to ensure that you receive the compensation you deserve, it is important to create a measure of all the potential tanaim in order to understand your full compensation. Such a measurement would allow:

  • a job seeker to weigh the compensation package of one job against that of another
  • a new mother to measure if it is economically worth it in the short run to reenter the job market
  • a worker to learn if that 45 shekels an hour he is getting is a great opportunity or a rip-off barely paying minimum wage

So how do you measure tanaim?

How can one measure one job that gives 10,000 shekels and a company car against another that offers 12,000 shekels and no car or one that offers 13,000 shekels, but no pension?

What about a job with a higher pension package and lower salary against another one that offers less of a pension, but a keren hishtalmut (a kind of tax-free savings plan)?

With so many different variables and a complicated, progressive tax system, it can be very difficult to measure a marginal shekel in take home pay, especially from so many different sources.

Introducing the Job Payoff Index

That’s why I began developing the Job Payoff Index (JPI).

The JPI is an index that takes all the general conditions that come with a job and put it into one quantifiable number that represents how much you earn from your job.

The JPI is designed to compare your take home pay, benefits, investments, and preferences into one simple number that you can use in order to compare how much a job is really worth to you.

How to use the Job Payoff Index

Download the Job Payoff Index spreadsheet

In order to find out the value of a potential job, download the file, answer the questions on the first tab (labeled ‘information'), and then go to the second tab to see what your average paycheck would look like and what your job payoff would be. The amount of the job payoff could be used to answer the questions we mentioned above and to make sure that a potential job falls within or beyond your indifference curve.

Please note that while the JPI is a good place to start valuing a potential job, it is far from perfect. For one, it cannot measure important factors in determining your job such as potential for growth, how nice your coworkers are, nor how interesting your job is.

If you have a suggestion to improve the Job Payoff Index or found a bug, please tell us in the comments below.

About the Author

Jonathan Degani works as a financial coordinator for the fundraising department of AMIT, an NPO that enables Israel's youth to realize their potential and strengthens Israeli society by educating and nurturing children from diverse backgrounds within a framework of academic excellence, religious values and Zionist ideals. If you have any corrections, or comments, he can be reached at jonnydegani@gmail.com. His hope is that with the input of users, he will be able to distribute an updated version of the Job Payoff Index every 3 – 4 months or so via his blog, Shomer Shekalim.

This article is part of the 4th Annual JobMob Guest Blogging Contest, which was made possible thanks in large part to our Gold Sponsor, Jason Alba of JibberJobber. If you want Jonathan Degani to win, share this article with your friends.

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About the Author Jacob Share

Job Search Expert, Professional Blogger, Creative Thinker, Community Builder with a sense of humor. I like to help people.

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14 comments
todd porter says

This is a very interesting concept. Great job in building the model.

On the surface it may seem simple but I think there are things that are non-numerical that should also be considered.

Here are a few:

Risk – Perhaps you have a better chance lasting in a job that pays less.

Long Term Value – I often tell candidates I’m working with, “If you take this job, will you be more valuable a year from now?” The same could be true in comparing jobs. Perhaps the job that pays less, will put you in a better position a year from now.

Bonus Potential – Even if two job offers pay the same and offer the same percentage bonus, the question would be, “Is one of the bonuses more attainable?”

Environment – In my career at IBM, I was once offered another job. In trying to compare numbers, I told them, “I’ll take the job but I want a 15% raise.” Without pause I heard, “Done”. What I didn’t calculate was that I had to work for a jerk. (it wasn’t worth the 15%)

There is probably a way of coming up with a list of emotional variables. You could then allow an individual the ability to weight and score them.

Todd Porter
H.T. PROF Executive Search

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Introducing the Job Payoff Index « Shomer Shekalim – ₪ says

[…] Click here to see the full article and download the first draft of the JPI.    […]

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Joel Eisenman says

After stating the importance of a car in the Tna’im, you did not include this issue in the spreadsheet.

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Jon says

A car is valued by the employer for tax purposes and therefore already has a value (the value varies depending on the type of car). The value of a car should be included in the line of the spreadsheet that asks for your monthly benefits.
If you have to guess in order to eyeball its value (for a potential job) I would probably guess that it is a few thousand shekels and write that number into the “benefits” box.

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Who Won The 4th Annual JobMob Guest Blogging Contest | JobMob says

[…] Free Tool: Compare Job Offers With The Job Payoff Index (Israeli Version) […]

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