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Your Benefits Matter!
October 23, 2017
Many people feel that the interview is the most important step when securing a new job, while other think it’s having the right references.
However, the most important part of securing a new job is your ability to negotiate your new salary which includes your benefits. Many people only look at their salary as their compensation and neglect to realize that this typically accounts for 70% of your total compensation package. The remaining 30% is your benefits package.
Many people neglect to negotiate their benefits as part of their compensation package and only look at their salary. In fact, sometimes people weigh new job offers based on salary alone. Often discover later that they accepted a position with a lesser benefits package and that are actually making less money.
If you look at giving up a week of vacation, tuition reimbursement, a 401(k) match, or lower insurance premiums, these benefits (especially in combination) can significantly outweigh a salary offer of $10,000 more without these benefits.
Don’t make your decision based on salary alone. Determine the value of these benefits, before you accept an offer.
#1 401(K) Match
Even if you are starting your career, a 401(k) match is valuable. Any time an employer is willing to match your money, you should contribute enough to obtain that match. It’s free money.
Most employers no longer offer pension plans and 401(k)s are many employers way to help contribute to their employees retirement plans.
Keep in mind your salary, the percentage your employer’s match and the maximum percentage your employer will match.
When weighing two 401(k) plan options, you need to consider the entire package.
Let’s say one job offers 50% of your contribution matched up to 6% of your $85,000 salary, while the other offers a slightly lower salary of $80,000, but will match 100% of your contribution up to 6%. If you contributed 6% of your salary, and have an annual return of 7%, in 30 years, the 401(k) would actually be over $191,111 larger if you took the $80,000 job than if you’d chosen the higher salary of $85,000.
Click here to see what your 401(k) plan can be worth over time.
#2 Insurance Benefits
With medical costs on the rise, workers contribute more to their family’s medical premiums than ever before.
When you are negotiating your salary, find out the out-of-pocket costs of the employer’s health care package. Ask if the insurance package offers a contribution health savings account or health reimbursement account. Another thing to consider is if your potential new employer offers an employer-provided disability insurance that could help replace a portion of your income if you are unable to work. If you are planning on growing your family, see if your future employer offers short-term disability coverage to replace all or a portion of your income during maternity leave.
It is important check coverage details of your employer’s insurance plan to determine it’s value.
#3 Professional Development
Whether you are at the beginning of your career or at the top of your career, there is always room from growth. Additional education in order to build your skills and develop your knowledge can be costly. Some employers offer classes, conferences, seminars, and even tuition reimbursement.
Keep in mind that in order to qualify for educational perks, your potential employer may attach strings to your educational benefit. They may only approve specific areas of study or require you to stay for a minimum number of years at the company. They may even penalize you for leaving early by making you pay back the tuition. You will need to weigh the importance of the educational opportunity versus the commitment you will need to make to your potential new employer.
#4 Wellness Programs
Wellness programs are being offered in addition to to health coverage by more employers. Over 54% of full-time workers have access to corporate wellness programs. Many offer to pay for gym memberships or have their own gym for employees.
Many companies now offer to lower your medical insurance premium if you agree to take a health-risk assessment. In addition, they offer rewards ranging completing healthy tasks, like getting a flu shot, quitting smoking, losing weight and even lower cholesterol or blood pressure.
Your potential employer may even offer subsidized programs to help you kick unhealthy habits.
#5 Commuter Perks
The average American spends $2,600 annually to commuting to work.
However, some potential employers are willing to reimburse employees for mileage, tolls, gas, or parking. Some employers offer a company car to employees that have to travel frequently for work. In big cities, some employers help offset the cost of a monthly public-transit pass with pre-tax dollars.
Other employers are offering flexible times to employees to help them avoid sitting in traffic. In some cases, they are allowing employees to work from home to avoid the commute and stress of traffic.
When weighing a new job opportunity, don’t only consider the salary. Take the time to understand your full compensation package before making a final decision.