What do you do when you receive a job offer? If you're like most people, you'll focus on the monetary number and not fully consider the entire compensation package. However, your answer should be along the lines of “weigh the benefits, of course!”
In the working world, it’s well known that compensation is more than just a salary. Recently, companies have expanded their benefits package outside the dental, vision, and life insurance realm. Flexible work hours, wellness programs, and even onsite daycare are trending in the more progressive companies. So what does this mean for potential new hires? How can one make an informed decision when deciding between two offers with very different benefits? The answer is, all you need is love for the job and a little HR!
Whether you have recently been offered a position at a new company or you have not reviewed your current company’s benefits package since your first day on the job, it’s essential to inform yourself with benefits offered to you. Benefit packages typically include health insurance, retirement plans, vacation and sick leave. Over 84% of companies offer health insurance and 60% have dental and vision plans.
Retirement plans can vary greatly by company. There are a variety of plans for retirement with many employers offering a combination to be determined by each individual employee. Two common types of plans are a traditional 401k and Roth 401k.
- A 401k contribution is a pre-tax deduction that generally grows over a long period of time based on the funds you are investing in. At the time of retirement when you are ready to make withdrawals, this money is then taxed.
- A Roth 401k is an after-tax contribution that is not taxed when the funds are withdrawn at retirement.
When comparing retirement plans, it's important to consider your own personal circumstances and to get advice from a certified financial planner if you don't understand the basic concepts. Your HR department can help get you these resources. Another key deciding factor is the employer match. Every company matches differently (some do not) and when planning for retirement, utilizing the highest match is what leads to the most growth. If you are contributing to a 401k currently, it is strongly encouraged to talk with your HR representative and determine how to maximize your employer’s match.
Life insurance is another major benefit offered by over 66% of employers in the United States. When offered through a company, life insurance can be an inexpensive benefit that is many times offered without medical questions as long as the benefit is elected during the open enrollment period. Short term disability is commonly offered, by companies larger than 100 employees, but less than half of companies also offer long term disability. Statistics show that 1 in 5 employees will miss work due to a disability and knowing you are covered whether it be for days or years, is valuable.
Paid Time Off
The average American worker receives 13 days of vacation each year. When comparing compensation packages, it is important to determine how a company defines paid time off (PTO). At first glance, a company may have weeks of paid time off. As you dive deeper, that may include holiday and vacation time along with sick days. Asking questions to gain an understanding of the way a company breaks down their PTO will also help determine which compensation package is most competitive.
These benefits are all common in today’s workforce. Now more than ever, companies are using not only those discussed above but are also creating programs and initiatives to use as a tool when recruiting top talent and retaining current employees. Wellness programs are not only a bonus to employees, but a strategy for keeping employees healthy. Studies have shown that healthy employees stay with their companies, and many departing employees name wellness programs as the one thing they will miss the most. Knowing a potential company is dedicated to wellness is also an indicator to their culture. An employer that cares and invests in its employees will in turn have more productive, invested and energized employees.
When reviewing compensation packages, it’s important to gather as much information as possible to receive the maximum return. Talk with your Human Resources department today and remember, all you need is a little love not only for the job but for the benefits as well.