How to Evaluate the Compensation Package and Job Offer

By on April 30, 2021 at 7:00pm

You've made it to the final stages of the hiring process and received a job offer. Congratulations! Still, there are several important questions to ask before you accept. Now is the time to ask questions about the entire compensation package.

What is a compensation package?

It includes more than just salary — it’s everything of value, monetary and otherwise, that an employer provides in exchange for the work you do. Think incentives, benefits and perks. What can be included in a job offer varies greatly depending on the employer and position, but here are the most common pieces:

  • Salary
  • Bonuses and commissions (as applicable)
  • Paid time off (holidays and vacation and sick days)
  • Medical, dental and vision insurance
  • 401(k) or another retirement savings plan

In addition, as employers strive to remain competitive and attract top talent, perks such as these are now common:

  • Telecommuting and flexible work hours, including windowed work
  • Childcare, including off-site and on-site options
  • Subsidized training or education
  • Stipends for remote work setups

Stay informed about current compensation trends with the Robert Half Salary Guide.

Why benefits and perks matter

Benefits and perks, loosely defined as items outside of base salary and bonuses, are important to consider for several reasons. First, they can help offset the costs of necessary services, such as medical insurance, that you might otherwise have to fully pay for yourself — or even be unable to afford. Employees frequently get a better rate by joining a company’s health insurance plan than they would if they purchased policies independently.

Second, they can help you maintain a healthy work-life balance. Companies are concerned that employees often feel stressed from juggling their jobs and everyday life, so many offer benefits and perks that offset demanding work responsibilities. Telecommuting, for instance, allows employees to avoid a hectic, lengthy drive to the office — and has proven to be an effective and efficient arrangement. Another example is paid time off for volunteer activities. These and similar extras help improve employee morale and mental health.

Third, they can help you prepare for the future. Whether it's subsidized training that could lead to a promotion and higher salary or a 401(k) plan that helps you prepare for eventual retirement, they’re set up to reward you for your time with the company by helping make your future better and more secure.

How to evaluate a compensation package and job offer

When you have an offer in hand, it's time to consider the entire package. If the proposed salary is not what you expected, examine the benefits and perks. A top-notch package may make a lower salary more palatable. Or if the perks aren't what you were expecting, you may be able to negotiate certain items. (And don’t forget about negotiating salary, as well.) Here are some questions to consider when evaluating a potential employer's proposal:

1. What's most important to you?

Values, goals and lifestyle vary from person to person, so there's no one-size-fits-all perfect compensation package. For some, health insurance and a 401(k) plan might be the only must-haves. For others, the ability to telecommute might be very important, or perks such as an on-site gym or tuition reimbursement could seal the deal.

The point is that you must know during the job hunt which aspects of the full compensation package are most important to you. If all of your preferred elements are present and adequate when you get a job offer, you're in good shape. If not, now's the time to talk to the employer about what's missing and why a particular perk is a deal breaker for you.

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2. What’s your benchmark?

It's difficult to evaluate a compensation package without a basis of comparison. To get a reliable benchmark for your starting salary and more, check out the Robert Half Salary Guide, which you can download for free.

Our Salary Guide provides up-to-date compensation data for hundreds of jobs in a wide range of fields. It includes starting salary ranges based on position, experience level and more, in addition to data and insights about perks and benefits, hot jobs, and hiring trends across several industries.

3. What details do you need to know?

Once you've identified your must-haves in a compensation package and have the job offer in hand, get all the details from your potential employer. Take health insurance: We all know that offerings can vary greatly from one company to the next — just because the firm provides health coverage doesn't mean you're good to go. Ask for a summary of key programs so you understand the finer details and costs of each, or even request policy documents so you can read them in full.

4. What are the eligibility requirements?

Bear in mind that you may not be eligible for all job benefits and perks the employer offers immediately. Some programs are open only to employees who have reached a certain tenure with the company. Others, such as tuition reimbursement, may be dependent on your manager's approval.

The good news is that you may be able to negotiate in this area. If you're currently working toward a certification or advanced degree, for instance, one condition of employment may be that the company pays for the rest of your education. Ask how much flexibility there is with the eligibility criteria.

Questions to ask about the job offer

Depending on your circumstances, you may also want to consider questions like these:

  • What are the out-of-pocket costs for benefits such as health insurance?
  • If you're in a same-sex or domestic partnership, is your partner eligible?
  • At what intervals will your performance and salary be reviewed?
  • What career development programs will you have access to?

You can't be overinformed when it comes to the compensation package from a prospective employer. Ask about everything that’s included — and about things important to you that may not be there. You don't want to be caught off guard after you've started your new job.

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