People – and rightly so – focus on
base salary when thinking about a new job or even a promotion. Base salary is the driving force behind a
total compensation package. Companies use
base salary levels to calculate other compensation elements– like bonuses,
supplemental benefits and even vacation time.
For example, the higher the base salary, the higher the bonus. And, these different elements can really add
up.
What some people forget is that base
salary isn’t the only force impacting
their total compensation. In fact,
people often overlook other elements – critical elements – when negotiating an
offer. These other elements can mean
significant money – and risk – in your total compensation.
Before agreeing to a job offer or promotion, consider these three hidden elements of compensation to maximize your total earnings:
1. Take time to read any restrictive clauses you are being asked to sign
New Company – Companies want to protect their intellectual
capital and competitive advantage. They
ask prospective employees to sign agreements restricting where they work after
leaving the company. It may seem odd to
think about where you will work if you are fired – before you have even started
– but you should carefully review these clauses before signing. If you aren’t offered severance to compensate
for the restriction, you may want to ensure the clause isn’t too broad. You could end up financially strapped if you
lose your job.
Promotion – Your new role might include more exposure
and more risk to the company – if and when you leave. Even if you never signed an agreement, you
might be asked to now. So make sure you
review it carefully.
2. Before agreeing to relocate to a new city, find out what it will REALLY cost you
New company or promotion: This is a BIG one. When being asked to move, people typically
ask – and even receive – some cash compensation to cover the move. But don’t forget! That additional allowance is taxed –
heavily. Plus there are numerous hidden
costs to moving. If you have a house,
you need to consider the cost to pay realtor fees, renegotiate your mortgage,
service cancellation fees or utility initiation costs. The money adds up much faster than people
realize.
3. Sometimes the biggest hidden compensation element isn’t compensation – it’s benefits
Most of the time, people assume the
way one company approaches benefits is how they all do it. Not true.
One company might not pass along much of their costs to its employees
while another slices a chunk out of your paycheck each week. And the chunk can be huge.
New Company: Even if you aren’t a big “user” of benefits,
you should ask for a copy of the benefits plans. First, find out what your monthly cost to pay
for your benefits will be – how much cost is passed from employer to
employee. Then find out if your doctors
are in-network or out-of-network. You
should even check the costs of copays or cost of scripts you use. You might pay $5 for a script at one company
and then be charged $50 somewhere else.
Promotion: If you are at the same company, a promotion
might mean you are entitled to more benefits (or perks like a car allowance),
depending on your level.
THE BOTTOM LINE
Not only is compensation more than
just base salary, the total package (benefits, perquisites, etc.) changes
throughout your career – even if you are at the same company for YEARS. Stay on top of what you are being
offered. If you aren’t sure, ask!
Originally published on Job-hunt.org
Originally published on Job-hunt.org
No comments:
Post a Comment