Conquent: Without Limits
Conquent: Without Limits
Kristen Fife's Blog

"Total Compensation" and the Job Offer

2013-01-15 15:13:56

It's interesting how candidates and recuiters approach job offers. In the Seattle tech market especially, it is highly standard to have a phone screen with candidates talking to someone from HR or Recruiting, and to talk about issues such as compensation. Depending on the company/organization, total compensation can have several components. Many candidates only think of base salary when the talk about a job offer, but it is important to think of things such as health insurance, flexible spending accounts (health care/child care which are pre-tax) annual bonus potential, 401K matching (free money!), vacation/PTO, parking/transit subsidy, gym membership, company equity (stock), tuition reimbursement, flexible work options, and subsidized food plans (the most common "perks" that contribute to a total compensation package).

Let's talk for just a minute about base salary. Everyone thinks that this is the most important part of any job offer, and while it certainly is of prime importance, it would be a mistake to decline a job offer just because the salary is lower than what you think you should be receiving. For example, if your employer offers you fully paid insurance coverage for your entire family and 25 days of PTO (paid time off), you may be looking at much more than the usual $5-10K most people usually try and negotiate on. (Believe it or not, $5-10K doesn't make that much of a difference in your weekly/bi-weekly/monthly take home pay unless you are making much less than the national average.) Let's say you have a family of 5, including your spouse and three children, one of whom is in college and the other two are under 18. Your spouse qualifies for their own health care insurance at work, and your company will pay for all your dependents (including your collegiate child until age 26.) Let's say that the premium is $200 for each of you per month. That is $12,000 for all five of you. For comparisons, assume you have an offer for $60K base salary and another for $70K with similar titles/responsibilities, but the $70K offer only pays for your premium (let's use the same $200 as a comparator) and only 25% of the premium for the rest of your dependents. That means that you will be paying $150 each month for each of your dependents, which lowers your annual salary by $7200, so you aren't looking at that big of a gap between the two offers after all.

Knowing what questions to ask during an offer negotiation will not only help you decide on the best choice for you, but the benefits and total compensation that a company invests in also can give you an idea about how well it treats its employees. If a company offers an above-average amount of perks to employees, it could indicate that management is willing to invest in the health and welfare of its staff, even as it impacts the bottom line. If there are better family coverage options such as childcare flexible spending accounts, that might also indicate a corporate culture where there are more working parents, equating to better work-life balance as a corporate value.

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Nitie: Re: - "Total Compensation" and the Job Offer
2013-02-06 17:05:43

Some very good posts. i have happy I discovered this blog early in my job search

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