Our two-part series on evaluating job offers continues. In Part One, we discussed salary negotiation. Part Two addresses the non-salary elements of a compensation plan.
Salaries are just one component of value in compensation packages. Benefits, advancement and work-life-balance impact both today’s bottom line and tomorrow’s opportunity. Here are several additional factors to explore as you weigh an offer.
Depending on the type of job, bonuses and stock grants can make a significant impact in the amount of total compensation you receive. But proceed with caution and be sure that you can absorb the risk they pose.
Bonus – Remember that bonuses are not guaranteed. If the company or business unit has a bad year, you may also come up empty. Always ask about the timing of bonus payouts—does an annual bonus structure work with your cost of living and cashflow needs? In the end, you may be better off with a slightly higher, but stable, salary than the gamble of a very large bonus.
Stock or Ownership – You may be offered stock in a public company or even equity in a start-up. Know enough about the organization to assess how valuable (or realistic) this payout may be. Given the nature of this type of compensation plan, it’s a gamble.
Benefits come in all shapes and sizes; your life stage and personal profile will influence how you value them relative to your total compensation package. While the categories of benefits are endless, here are the most common ones you will encounter.
401K and Matching – While the pre-tax investment opportunity is nice, contributions to these programs come from your own money unless the company offers matching—a nice boost to your investment no matter what your age.
Pension – Many larger companies and government agencies still offer pensions. Be sure to consider the tenure required and the long-term solvency of the company. If you don’t plan to stay in your job long term, this may not be a factor in your total compensation.
Health Benefits – Look at the options and especially the out-of-pocket costs. For some, having a lot of choices is important, and for others, it’s unnecessary. As an example, orthodontia is a great perk, but if your kids are grown, this may go to waste.
Vacation/PTO – Take a look at how a company allocates vacation and sick time, and make sure it’s realistic with your lifestyle. Some companies have unlimited vacation time, but does company culture allow employees to take it? You may want to investigate.
Every new job you accept becomes a steppingstone in your overall career. The skills you gain will add equity to your resume and set you up for the next role. Getting paid to learn is a smart feature of your compensation plan.
Reimbursements – Larger companies, like UPS, Starbucks or Wells Fargo, provide college tuition reimbursement. Usually, it caps out around $5000 a year to comply with IRS standards (otherwise it is income). Other companies may compensate for continuous education towards certifications, which also could be costly if done on your own. Overall, if you find a company willing to invest in you, they may be worth a second look.
In-House Training – Some organizations are also well-known for their in-house training. For example, those that use Six Sigma may provide internal Black Belt or Green Belt certifications to employees. That distinction would be valuable in any future job. Another example is General Electric (GE), which is well-known for grooming its leaders. GE invested in an internationally recognized campus, called Crotonville, where they offer leadership development programs to rising stars. Competitors purposely recruit individuals with this training.
Finding a job that works with your personal life has its own value. This can translate into money (flexible schedules reduce the need for childcare, for example), but it doesn’t have to. Your health and well-being are important. Finding a company culture or team that fit your work style and lifestyle can make each day more enjoyable. Many would say this is priceless.
In the end, before you enter a negotiation on just salary, understand the total offer presented. Everyone’s needs are different and considering salary, along with the other elements of compensation, can allow you to find the best fit, and value, for you.