Changing jobs is a big decision, and shouldn’t be taken lightly. There are a lot of things to consider including salary, location, hours, and travel time. All of these can have grand effects on your home life and your wallet. One item that I still see young people ignoring is the employment benefits. They think because the salary is a little sweeter that they can ignore analyzing the benefits, but quite the opposite is true. Often times, the lack of employment benefits can cost you big time down the road and make you learn the hard way.
When considering a job, take a look at their standard employment benefit package. You can request to have the benefits documents sent to you when you receive the job offer, or you can ask for them from human resources during the interview process. Larger companies will have several different options for health plans, visual, dental, stock options and retirement plans. Smaller companies will generally only be able to afford a single plan that everyone must comply with.
Here’s the rub about employment benefits. Very rarely do you get to negotiate them. Unlike salary, vacation time, schedule, or travel time, you don’t get to declare what you would like to have or ask for more. What this means for you is that you definitely have to be comfortable with the options that you get. First and foremost is understanding how much it is going to cost you.
You can ask the human resources department for average benefit costs for their employees so you have an understanding of how much will be coming out of your salary each paycheck. This should be a huge consideration when you begin to negotiate your salary. If the company is footing a lot of the bill, then your salary may not change too much from the addition of benefits. However, many companies do not take on a large share of the benefit payments, and therefore you could be losing hundreds of dollars out of each paycheck. What you thought may have been a great salary offer can quickly turn into not so great if there is a huge salary reduction due to benefits each month.
When considering employment benefits, you need to take a look at your lifestyle and your home. You will want to analyze your activities. For example, do you do a lot of high risk sports like skiing, snowboarding, rock climbing? Do you have health considerations like diabetes, asthma, or depression? Do you have children, what are their ages, or do you plan on having children in the next five years? Do you have a spouse who will need coverage? All of these factors will indicate what kind of coverage you will need. Once you have determined what you need, make sure what the company is offering is going to be sufficient in coverage, and then review how much money that will cost you.
For example, take the average amount of doctor visits in the last two years for your entire family, and then cost out how much in co-pays and deductibles you would be paying for those visits. Cost out an emergency like a broken leg or stitches and a dental crisis like a root canal, and see how much the health insurance would cover and how much you would be dishing out of your wallet. These are good practices to analyze how great the company’s health insurance is. When you have done this for a few job offers, you will begin to realize the difference.
After the crash in 2008, many organizations made cutbacks to their retirement savings plans, and a few of those organizations never brought back their former support. Take a hard look at the job offer’s retirement savings plan, the overall performance, and what portion the company matches. I find this is always a good indication of how well the company compensates its employees and how competitive they are for good talent. The companies that take care of their employees and try to stay competitive in the job market have great retirement plans with excellent matching. Those that don’t care will usually show it through small matching contributions or no support at all.
Don’t forget that while you are working hard all these years putting in the hours at your company, you need something that is going to grow the bank for when you want to retire. If the company thinks their employees are valuable, they will make that commitment to take care of their talent. You need to find a company that is going to reward you for all your hard work by investing in your retirement.
There are other benefits that we sometimes forget about during the interview process, but are also important. If it is a public company, be sure to ask them about stock options. For many people, these can serve as a handy savings account for tough times or big purchases. Ask about any flexible medical expense programs they may have such as FSA, HSA or HRA’s. These can help you not take a hit in taxes with huge expenses like braces, a minor procedure, or medications. Take a close look at their Short Term and Long Term Disability coverage, as these can vary greatly by company and may affect you if you have to have a major surgery or have to be on medical leave for any reason.
See if the company has any additional reimbursements or discounts for childcare, gym memberships, phone plans, car purchases, commuter expenses, and the like. If you are expecting to have children, you will want to take a close look at their maternity leave options for both fathers and mothers and see how many weeks of paid leave you can have, if any. All of these items can add up to significant dollars out of your precious paycheck.
If you have determined the employment benefits are going to bring more harm than good, and this leads you to turn down the job, please do us all a favor and tell the company their benefits are not satisfactory. No sense in keeping it a secret and making the rest of the job candidates and current employees suffer. Employers need to understand that employment benefits are a big deal, and if we all stay silent, they will continuously get worse. The job market should be competitive, and you will be doing that employer a service if you inform them that they are not staying in the game with subpar benefits.
When considering a job offer, be sure to analyze your major expenses and see how the company’s benefits may help in alleviating those costs. If the majority of their benefits are dismal or not relevant to you, this may not seem like as good an offer as it did before. Bad benefits can add up to big dollars out of a shiny new salary and cause you to struggle later on. Be sure you have you and your family’s best interest at heart and delve into the fine print of benefits before accepting your next job offer.
by Sasha DeMarino