In my 11 years with JMG, I have had the opportunity to prepare employment offers for many carefully chosen candidates. Some candidates accept their offers without any questions, leaving the building with glee. Some candidates may suggest salary and/or PTO negotiation. Others have flatly declined our employment offers based on the compensation alone, without even peeking at our company benefits. Although unaccepted job offers may sting for a bit, JMG has been fortunate to continue to search, find and employ many of the best associates in the industry.
Whether you are starting your first job, looking for a new one or assessing your current total compensation, it is important to consider the benefits that each company offers. Benefits are a significant factor to put on the scale with your salary when you are weighing your total compensation. You may be astonished to discover that a lower paying job with great benefits can put you financially ahead when compared to a higher paying job. Here are the most common benefits that should be taken into consideration when calculating your total compensation:
- Medical and Dental Insurance
When will you be eligible for coverage on the company's health insurance plan? Normally, if you are working more than 30 hours per week you will qualify for this benefit between your first and your ninetieth day of employment depending on your company's policy. Some companies will completely cover you and allow you to purchase insurance for your family. Other companies will ask you to pay a portion of the premium for yourself and your family. Some companies will permit you to cover your significant others, as well (significant other coverage is often mandated by the state you reside in). Vision and chiropractic care are definitely a plus if coverage is included in your medical insurance plan. Always be cognizant of the out-of-pocket exposure in addition to the premium costs when comparing health insurance plan options. Dental insurance plans should include preventive care, basic and major care. Orthodontic care may be another factor to consider if you have dependent children. - Short-and Long-Term Disability Insurance
Short-term disability insurance normally begins after seven days of consecutive absence upon the insurance company's approval of your claim. Long-term disability insurance generally becomes effective on your ninetieth consecutive day of absence. You are fortunate if you are employed with a company that provides disability insurance to you at no cost. - Employer Match
Many employers will match your 401K contributions up to a certain percentage of your salary. You should take advantage of this opportunity because it increases your earning and savings potential. If you leave the company before you are 100% vested in the 401K program, you will forfeit some or the entire amount your employer matched on your behalf. Broadly speaking, there are two kinds of vesting schedules; cliff vesting schedules and graded vesting schedules. A cliff vesting schedule means you are not vested at all for a long time, then you suddenly become vested in all of your employer match contributions. A graded vesting schedule means you will gradually become vested in your employer match contribution. - Paid Time Off
Vacation, sick and personal time are commonly lumped together to collectively be referred to as PTO. Generally, you earn a set number for each month you work. These days accrue as you work. Many employers also give additional days once you reach your five or ten year anniversary. Be sure to evaluate the amount of PTO you have when considering changing jobs. You may have to sacrifice some of your family vacation time moving to a new employer when it comes to seniority. - Life Insurance
Some companies will pay for one year's salary, while giving you the option to purchase additional coverage. Other companies may pay for a set amount of life insurance for each employee and provide dependent life insurance for your spouse and/or dependent children. This benefit is commonly overlooked. However, in the event of your death it will help your loved ones pay for expenses. - Flexible Spending Accounts
Another common benefit is a flexible spending account. The government regulates these accounts, so the rules are pretty much the same across the board. A flexible spending account will allow you to set aside pre-tax dollars to pay for medical and daycare expenses. Flexible spending accounts are a great way to decrease your taxable income. You should take advantage of one if you can. - Health Savings Accounts
If your company offers a qualified HDHP (High Deductible Health Plan) and you elect participation in the plan, you may defer pre-tax contributions to your account. Funds may be used to pay for eligible (medical, dental, vision) expenses at any time without federal tax liability. Unlike a flexible spending account, funds roll over and accumulate year to year if not spent. HSAs are owned by the individual and are portable if you leave employment with the company.
Direct and indirect financial compensation are naturally the most important factors in determining your total package. It is also important to weigh the non-financial factors that may include work/life balance, alternative work schedules, on-the-job training, developmental opportunities and even casual dress. Company size, corporate structure, physical location and personal situations should be included, as well - especially if you are asked to relocate.
If you are searching for a job, or have the “ho-hums” with your current employment, take a break to put all of these factors on the scale; your total package may weigh a lot more than you think.