Consider the Value of Benefits When Comparing Salaries
Equity, bonuses, and base salary are all well and good, but when comparing salaries or compensation offers, don’t neglect to examine the value of the benefits you’re being offered.
Always plan for your future. Whether you’re fresh out of grad school or you’re in the process of making a strategic career move, always look at the long view. Most of us don’t want to work until we drop, even if we love what we do. I, for instance, love my work, but I still want to be able to enjoy a long and (hopefully) healthy retirement. To do that, when comparing any job offer, you’ve simply got to look at the retirement plans, unless you’ve already got a healthy plan of your own in place.
There are different kinds of retirement plans, and some companies offer more than one type, so it’s worth figuring out what your options are. A defined benefit plan is a traditional pension where both you and your employer make regular contributions and, upon retirement, you’ve got a guaranteed monthly income. Some companies may also offer a defined contribution plan like a 401(k) where you make regular contributions via your pre-tax paycheck, the money is invested and has the potential to grow, but there’s no guarantee for ROI. IRAs, or individual retirement accounts, are generally only offered by smaller companies. These plans work like 401(k)s but have different contribution limits, and some take contributions from after-tax paychecks but then don’t re-tax the sum when it’s withdrawn in retirement. Some employers match up to 50 percent of your own contributions up to a set percentage of your income. Be sure to establish whether the plan is vested, in which case, the amount of contribution matching or other benefit may increase over time.
Health insurance is a hot topic and, whatever your age, should sit high on your list of priorities when it comes to comparing compensation packages. Establish whether it’s individual or family cover, what conditions or treatments are exempt from coverage, how much you’ll have deducted from your paycheck, copayment charges, and prescription costs. Is it just health insurance? Or is vision and dental covered, too? Even if you’re fit and healthy and have no kids, you never know what’s around the corner, so a solid employee healthcare package is a must-have.
Death isn’t something any of us like to think about, but remember that it pays to think ahead. If the worst should happen, life insurance can help your loved ones financially. You’ll find most companies offer life insurance equal to a minimum of one year’s salary in the event of your untimely demise. Find out how much the payout would be, whether you need to have been employed and enrolled for a certain length of time before the insurance is valid, and whether you can purchase additional cover at a discounted rate.
Sick Leave and Disability
You’re fit and healthy, but again, who knows what’s around the corner? Maybe you get an injury that means you simply can’t fulfill your responsibilities. Maybe you contract a debilitating condition that puts you out of action. To make sure you’re still financially stable in this event, take the time to examine the disability portions of your job offers. Does your offer include long-term disability insurance or just short-term? Short-term insurance protects you from financial hardship due to disability for between 2 and 6 months and, on average, according to the BLS, covers 64 percent of your pre-disability salary. Some companies add stipulations like employees having to use all their allotted sick days before being eligible for short-term disability.
Long-term disability isn’t as common, but it’s something you should give thought to, as anybody’s life and circumstances can change dramatically unexpectedly. LTD kicks in, covering between 50 and 70 percent of pre-disability salary, when STD runs out and cover lasts between 2 and 10 years, or until the employee reaches age 65.
We all need a break from time to time, so make sure there’s plenty of vacation time in these offers. The average paid yearly vacation in the US is just 13 days – we know you can do better than that. And don’t be fooled by the provision of “paid time off” – this generally includes all time off including sick leave, vacation, and personal days. Don’t let a generous-on-the-surface number of PTO days fool you.
Daycare is costly. Even if you don’t have kids right now, you may meet your significant other, settle down, and start a family. And daycare is expensive. So give the provision of on-site or company-sponsored daycare moderate priority when comparing salaries, and higher priority if you already have little ones.
Continued Learning Provision
Time to educate yourself, attend classes, or pursue other professional development activities is a nice bonus. Even if you think you’ll love the job and won’t ever want to work anywhere else, remember – you can always be better – there’s always room to improve your current performance. Give extra weight to offers that include an educational stipend or that sponsor your continued learning.
While this is fairly intangible, it carries a lot of weight. Your work-life balance has to be right for you to perform at your best professionally, to maintain motivation, and to be happy, content, and satisfied. Working 80 hours a week every week doesn’t lend itself well to having a balanced life. Give priority to offers with schedule or location flexibility, too, as this can lower your stress levels, reduce commute costs, boost productivity, and increase job satisfaction.
There are all kinds of other perks that employers may offer to sweeten your deal. We’ve all heard about the insane perks offered to Google employees like the onsite beach volleyball pit, video gaming facility, rock climbing wall, the pet-friendly campus, the provision of onsite washers and dryers for employees to do their laundry free of charge, and power nap pods. There’s Wi-Fi enabled shuttles for employee transport, motorized on-campus scooters, exercise classes, language lessons, and more. Every company has its employee perks – those little added extras that can make life easier or brighten your day. While these little extras are undeniably nice, they probably shouldn’t be deal-breakers.
There are so many other intangible things that aren’t strictly part of the offer but are still important when comparing compensation packages. These intangibles include the type of company – a tech giant where you have a single, defined role, or a dynamic startup where you’ll likely wear many hats and have to dive right into the fray? Does the company lend weight to your resume? Are you excited by the role and the challenges you’ll face? What’s the work culture like? Do you feel you’ll get on well with your peers and your boss? How long is your commute? All of these intangible things seem fairly small – but together they should be among the top spots on your list of priorities because they have a huge impact on your happiness, your productivity, and your performance. If these things aren’t right, no matter how great the rest of the compensation offer, you won’t succeed and you’ll be miserable – and probably fairly quickly be starting the job search all over again.