If you’ve ever had to debate the pro’s and con’s of a new job offer, or renegotiate a contract, you know it’s not always easy to evaluate the worth of a potential compensation package. Benefits and bonuses add a lot of complexity to the process; it doesn’t always come down to salary dollars and cents.
Benefits can quickly add up to make the compensation package more competitive, and it’s important to truly understand their worth. Five of the most common employee benefits include: health and dental insurance, group life insurance, training expenses, vehicle allowances, and gifts and awards. All of these perks could make up more than 20 percent of your total compensation package. Here’s how to evaluate them fairly, and know if you’re really getting a good deal.
Time is money, so think about its true value
There is nothing more valuable than your time, but paid days off are something we often don’t consider as compensation. It’s harder to place value on them than a straight up salary number, but a higher take-home pay isn’t always more important in the long run.
Be sure to review offered paid vacation days and sick day pay, as well as the company’s overtime policy. Some companies give you the option of being paid out for any hours of overtime, or they give you time in lieu, matching the hours exactly or even giving you time-and-a-half.
A more flexible schedule can be hidden perk, as well, where some hours are worked in the office and some hours are worked remotely. Think about what this would mean for your life: could it alleviate the need for childcare on some days, or save you money on commuting and parking.
Insurance benefits vs. carrying the cost yourself
Some of the most commonly recognized benefits are health and dental insurance. Depending on the company, these benefits can cover up to 100 percent of some procedures and medications, and could be worth anywhere from $2,000 and upwards. For dental, company insurance policies will often pay about half the cost for certain procedures, up to a certain limit each year. This can add up to about $3,000 in benefits, as well.
Some companies will also include group life insurance, saving you $250 to $500 a year, and disability insurance, which could be up to $5,000 per year.
Depending on whether you’re single, married, and/or have dependents, all of these packages could add a huge amount of value to your compensation packages. Ask the company or group benefits provider in question to put a dollar value on the benefits, or check out the plan’s website to find this information.
Planning ahead for retirement
A study, published last year by CIBC, reported nearly 40 percent of Canadians said they see no point in investing in RRSPs because taxes will eventually be paid when they convert to RRIFs after retirement. But many companies will match your RRSP contributions, making it well worth your while to contribute to your group pension plan.
For example, if your company matches 50 percent of the first five percent that you contribute to an RRSP, they will be compensating you with an amount that’s 2.5 percent of your plan. That means, if you earn $50K a year, you’ll see a boost of $1,250 to your retirement savings from your employer. Plus, most of the time, the longer you contribute to a pension plan the better the benefits you’ll see be.
Adding up all the small stuff
There are many additional benefits that your company could offer as part of your compensation package. These may include employee discounts, employment assistance programs, gym memberships, and cellphone coverage.
At the end of the day, you’ll know best which benefits and bonuses are most beneficial to you. Once you sign on with the company or a new contract, remember to actually take advantage of your benefits. Reportedly, Canadians miss out on as much as $3 billion by not taking full advantage of defined contribution plans.
So, if you are looking at that full-time position, ask for all the details and their monetary value before you say yes or no. The benefits and bonuses could be worth more than you think!