Many employees leave their jobs in the hopes of leveraging their experience and earning more money. While that is definitely an admirable goal, many young members of the workforce forget that their compensation is made up of more than just their base salary. Yahoo recently had a great article about how benefits make up a significant portion of our annual compensation.
Most companies, the United States Government included, pays its employees almost 30% more money that the amount you see at the bottom of your paycheck every month. You just do not realize it because the money is set aside in different accounts for you or spent on your behalf for benefits. According to the Bureau of Labor Statistics, companies spend a significant amount of money on their employees in the form of other benefits that are salary.
These are some of the other benefits and their percentages of your total compensation that many people do not remember to consider when job hunting….
- Health Insurance Benefits, + 11%
- Social Security, Medicare and Other Insurances, + 8%
- Retirement Plan, + 6%
- Vacation, Sick Leave, Personal Time, + 7%
- Other Less Common Benefits, + 1-10% (Stock Options, Company Cars, Gym Memberships, Lunch, Coffee, Snacks, Bus Passes)
So, if you are comparing jobs, remember to compare apples to apples. Do not just look at the salary. What kinds of benefits are you earning as well? This is why you should look at TOTAL compensation when considering a new job. If you do not consider all your benefits, you may end up with a higher salary but actually making less in the end because your total benefits are lower.
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“This is why you should look at TOTAL compensation when considering a new job.”
If only it were that easy. The few recruiters I have talked to in my short career weren’t exactly experts on the benefits portion of their offer. They can’t say what the health insurance premiums will be, or what the deductible and copays are, etc. As a consequence, my current position that I thought was going to be a 20% raise, only turned out to be about an 8% raise.
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