You received an offer, but does the job really fit?
Responsibilities you want? Check.
Better job location? Check.
Salary increase? Check.
Good, stable company? Check.
Great working relationships? Check.
What about benefits? All too often, candidates only look at salary and work-related aspects when considering a new position, without considering the entire compensation package. Many workers don't fully understand or appreciate what their benefits are or how much they are worth.
According to a recent study, the average cost of employee benefits in the United States is approximately 42 percent of an employer's payroll. This means that an employee with a base salary of $50,000 per year is receiving, on average, an additional $21,000 compensation in benefits. This can include medical, dental, vision, disability, and life insurance; worker's compensation coverage; unemployment insurance; retirement; and the employer's cost when you are taking time off for sick days, holidays and vacations.
Medical Insurance
With any medical plan you should ask to see a benefits summary which gives detail about each plan option, the coverage, premium costs and limits. You will want to know if you can cover dependents such as your spouse, domestic partner and children. You should find out when your benefits can begin and if pre-existing conditions are covered.
According to the Kaiser Foundation, the average insurance premium increase continues to outpace workers' earnings and inflation. Because of this, many employers may reduce the percentage of their contribution, leaving employees faced with paying the difference. Insurance companies are also offering more creative plan options at a lower cost, but with reduced coverage for employees and their families.
One such plan provides coverage only for the smaller claims, leaving the employee exposed should a major medical event arise. These plans might offer low monthly premiums and low office visit co-pay, but may have a $15,000 annual benefit limit which could mean financial disaster to an employee who encounters a health crisis.
Conversely, other employers offer high-deductible plans which allow the employee to enjoy a lower premium and coverage for catastrophic events. Even the government is getting behind this strategy by offering tax advantaged health savings accounts which can be paired with high deductible plans. However, this type of coverage is not suitable for everyone. For example, young children often require frequent visits to the doctor, each of which can result in several hundred dollars out of pocket costs if not covered by insurance.
401(k)
Many employers offer 401(k) retirement plans but not all make a matching contribution. Be sure to ask whether there is a match for the dollars you invest, what the vesting period is and how much the matching limit is. The most common match is 50 percent up to the first 6 percent of pay. This amounts to $1,500 per year for an employee with a $50,000 annual salary.
Time Off
Time off for vacation and other personal days varies widely from among employers. Some companies require working a year before becoming vested for paid time off. This is often negotiable; if your new employer wants you bad enough, they may be willing to reduce the waiting period or even provide additional vacation days.
Bonuses
Another common practice is to offer employee bonuses. Many bonuses are based on the company's profitability, which is not as much in your control as the bonuses that are based on your specific performance. For the latter, try to find out the maximum bonus available, and establish clear and attainable goals with your manager to get there. Get this in writing if you can.
Stock Options
Stock options can be used to tie the employee's compensation to the performance of the company. This was commonly used in the 1990's, where it wasn't unheard of to see 75 percent of employees' compensation come from stock options. This benefit has become less popular than it once was due to several high-profile corporate scandals involving stock options. Today, more companies are offering this benefit as a perk rather than as a salary replacement due to the nature of the fluctuating market. Find out the strike price of the option and the vesting period. The lower the better on both, the more you potentially benefit.
You should always review all the details of the benefits package before accepting a new job offer and providing notice at your soon-to-be previous employer. Otherwise, if you find the benefits to be unsatisfactory it could be too late to turn back.
Bob Fors is Associate Director of Recruiting at MATRIX Resources, Inc., one of the largest technical staffing firms in the U.S. Bob can be contacted at Bob_Fors@matrixresources.com. Website: www.matrixresources.com
Copyright 2008 Bob Fors
