There are few things more exciting than receiving a tempting job offer. Congratulations! But before you rush to accept that offer, take time to evaluate the entire compensation package.
What is a compensation package?
It includes more than just salary. It’s everything of value, monetary and non-monetary, that an employer provides in exchange for the work you do — like incentives, benefits and perks.
What can be included in a job offer varies greatly depending on the company and position, but most leading employers offer some combination of the following elements in a compensation package:
- 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
- Childcare, including off-site and on-site options
- Flexible work hours
- Subsidized training or education
But that’s not all. As employers strive to attract top talent in a fiercely competitive hiring market, they’re adding new benefits and perks or updating their existing array of options. Most human resources managers (88%) responding to a recent Robert Half survey said their organization was adding new offerings.
Other trends in benefits and perks we’re seeing include:
- Candidates prefer health-related benefits over leisure-related ones, like unlimited vacation time.
- Firms are giving employees more opportunities to boost income, from increasing their 401(k) match percentages to incorporating profit-sharing options.
- Many remote workers expect their employers to cover the costs of home office equipment to help them be as productive at home as they would be in the office.
- Job seekers are looking for enhanced schedule flexibility, ranging from hybrid and fully remote arrangements to four-day work weeks or the option to work the hours when they’re at their best (also known as windowed work).
Looking for tips on how to be a successful remote worker? See this post.
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 pay for yourself fully — 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 — a top priority for employees who saw the line between their professional and private lives become increasingly blurred during the COVID-19 years due to full-time home working. Hybrid schedules appeal to people who find that commuting five days a week saps their productivity but don’t want to go back to feeling stuck at home 24/7. Other employees may enjoy the rhythms of office life but would like more autonomy over the hours they work.
Finally, some benefits and perks 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, these benefits 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. Here are some questions to consider when evaluating a potential employer’s proposal:
1. What’s most important to you?
Values, goals and lifestyles 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. Remote or hybrid work schedules might be the deal-breaker for some individuals. And perks such as an on-site gym or tuition reimbursement could make all the difference for others.
The point is that you must decide early in your job search what your must-have perks, benefits and working conditions are. You’re in good shape if all of them are included in the job offer you received. If not, now’s the time to talk to your potential employer about what’s missing and why a particular perk is something really important to you.
2. What’s your benchmark?
It isn’t easy 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 access 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 have a job offer in hand, get all the fine details about benefits and perks from your potential employer. Take health insurance: Offerings can vary greatly from one company to the next — and 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 what they include (and cost), or even request policy documents so you can read them in full.
It’s a similar story with flexible working schedules. For example, if you’re offered a hybrid schedule of three days in the office and two at home, how much freedom will you get to choose which days fall in which category? Does full-time remote really mean full-time remote, or will you be expected to come to the office for training days, team meetings and similar gatherings?
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?
- What level of coverage is there for dental and vision insurance?
- Does the company offer employees the opportunity to buy its shares? If so, is there a discount?
- 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?
4. What are the benefits eligibility requirements?
Keep in mind that you may not be eligible immediately for all the job benefits and perks an employer offers. Some programs are open only to employees who have reached a certain tenure with the company. Others, such as tuition reimbursement, may depend on your manager’s approval.
The good news is that you may be able to negotiate. For instance, if you’re currently working toward a certification or an advanced degree, one condition of employment may be that the company pays for the rest of your education. Ask how much flexibility there is.
You can’t be overinformed when it comes to a compensation package from a prospective employer. Ask about everything that’s included — and about things important to you that may not be in it. You don’t want to be caught off guard after you’ve started your new job.