When people think about their “compensation”, they often think solely in terms of hourly wage or annual salary. We all get why. The reality is, when applying for credit, that’s the number you need to provide. It’s the initial basis for your taxes. It’s the pay portion that you bring home that covers the bills, buys the groceries, and hopefully allows you to enjoy some fun and entertainment.
But have you ever sat down to think about what all really goes into your total compensation and the combined value? The other components may not be as tangible, but that doesn’t mean they don’t hold value. Some are more obvious:
- Paid time off (vacation, holidays, sick leave)
- Health benefits (medical, dental, vision), including how much the employer contributes/what portion you pay, and the quality of the plan
- Retirement (401(k), pension plans)
- Potential for incentive, bonus or commission
Those are the primary ones that applicants tend to ask about regularly. Now, let’s look at some examples of others that might add to the equation, depending upon your personal circumstances:
- Tuition reimbursement: If you are a student, this could be a windfall. Some employer plans cover not only tuition, but books and fees as well.
- Paid maternity/paternity leave: If you envision expanding your family in the foreseeable future, this could make a huge difference for you.
- Child care assistance: The prospective employer might have on-site daycare or offer reimbursements to help off-set those expenses.
- Schedule, flexible work arrangements and location: This impacts commute time (and remember, your time is worth something to you), but can also include changes in childcare costs or variations in parking or public transportation costs. I am fortunate enough to work virtually, and trust me, there is huge value in that. I have jokingly said for years that they would have to pay me a w-h-o-l-e lot more money to go back into an office everyday, specifically because of gas and parking expenses, my time that I do not want to spend sitting in traffic, lunch costs, etc.
- Employee discounts: Some employers have partnered with other companies to offer discounted products or services, such as cell phone service or car insurance. It can add up!
- Wellness programs: As wellness has become more of a focus for companies, discounted gym membership coverage may be offered, either directly or through health plans.
- Uniforms: If the company requires uniforms, it could save you money by not having to buy a “work wardrobe”.
In reality, if you did the math, an increase in base pay could be a decrease in total compensation if, for example, your portion of health benefits goes up by more than the value of the increase, or you are losing paid time off, etc.
There is usually a minimum that you need to live, and most people envision obtaining an increase in pay - or at the very least a lateral move ~ as part of the job change process. Fair enough, and critical to the process. Too often, though, candidates focus solely on that one component, and not the total picture.
Bottom line, when reviewing an offer, you should absolutely care about the pay factor, but do yourself a favor and look at it holistically as well. Add up some of the perks and benefits, and it might change your perspective about the value of the total package!