“Well you sure can't eat benefits!”
I remember this conversation vividly from my childhood, as my dad talked to one of his younger coworkers at the time. My dad has worked for a public utility company for many years. He has a defined pension, free health/vision/dental insurance, and a generous 401(k) equivalent match among other benefits.
His coworker was complaining because his net paycheck was slightly lower than what he would receive if he went out to work as a contractor for a private construction company. My dad was trying to explain to him the monetary value in the free benefits that he received at his current job, and the above statement was his reply. He just did not get it.
I don't know what happened to my dad's coworker, but I do know how important it is to factor the value of your employee benefits into your total compensation package.
A Free Master's Degree
When you are evaluating a job offer you should know that it is generally acceptable to negotiate your benefits, as well as your base pay. Many companies have more flexibility with their benefits package than they do with the base salary they can offer, and while this may not give you more money in your paycheck each week, it can add up to serious value over the long run.
When I was evaluating job offers for my current job, I decided to take one that offered considerably less salary because of the free tuition benefit. I work at a university, but free tuition for employees is not always a provided benefit in the education sector.
At my university, however, I can take up to six credit hours each semester for free, at any degree level. I am six credit hours away from graduating with my master's degree, and my only expenses will have been a few hundred dollars in textbooks (which I rented, of course!). I was more than willing to take a lower salary temporarily while avoiding the cost of a master's degree.
This free tuition benefit is worth $1,250 per month. Had I taken the better-paying job, I still could not have afforded to pay my own way through a master's degree. Once I graduate with this degree I can then request a degree completion bonus, or simply begin looking for new jobs.
Evaluating Your Benefits Package
Free tuition, or a tuition assistance program, are excellent benefits, but they are only one piece of your overall benefits package. Traditional benefits often include some form of health, vision, and dental insurance, along with paid vacation, paid sick leave, disability insurance, a life insurance policy, workers comp, a retirement plan, and a 401(k) match.
In recent years, additional benefits have become common in the workplace such as: free lunches, free snacks, free coffee or beer, child care assistance, paid volunteer days, patent/trademark assistance, gym memberships, telecommute options, relaxed dress code, adoption assistance, dog friendly workplaces, and company cars.
As you can imagine, these benefits can add up to a significant sum, and the overall value of these benefits should be heavily weighed in addition to the base salary. Taking a job should be as much about your quality of life as it is your paycheck. Happy employees make better employees, and benefits are one of the chief ways that companies try to make their employees happy!
If you have dreams of owning or running a business one day, what benefits do you plan to offer your employees to promote the best work possible? How does your current benefits package compare to any of the above options? Have you negotiated your benefits package? How did it go?
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This is one of the main reasons I joined the company I did. After working there for 9 years, I ended up going back to school to get my MBA. This has saved me >$50,000 ! Pretty cool!
That is awesome Derek. Isn’t it a great feeling to let somebody else write the check for your college tuition?
Very true. HR and managers always like to point out the ‘total compensation package’ that you are receiving when people start asking about raises, but it does hold true when you think about it. The benefits that your company pays, from medical and dental insurance even to time off (where they still pay you but with lower productivity) all comes at a cost, which is a benefit to you.
It sure is. At my current position HR even has a calculator tool online where you can see the value of your total compensation package. I’m just thankful we don’t have to pay taxes on that extra portion!
My company offers tuition reimbursement. Up to $8,000 per calendar year. They paid about $7000 for the last part of my MBA. I’m already looking at another Master’s program that will help my value increase. If I start in 2014, it would take me about 4 years to complete. I figure since my company offers tuition reimbursement, I might as well take advantage of it, and have them pay for my 3rd Master’s degree. 🙂 I just have to talk to my manager and have him approve it.
That is awesome. It really does make sense for employers though. The more educated their employees, the more quality work they will produce. At least, that should be the case in theory… Sounds like you have an awesome gig with your current job!
Some benefits are not equal for everyone! If you cannot use the benefit, you do not value it. When I use to work for a Fortune 100 company, they would send us a 100 page brochure annually to remind us of the benefits. In many cases, you are not aware of all the benefits.
Good perspective. A bachelor would never get as much benefit out of a family health insurance plan or childcare benefits. It would be nice if there was some way to “cash out” your unused benefits.
As an actor, my health insurance benefits are offered through the union. You have to work a certain number of weeks at a union job each year to qualify for 6-12 months of health insurance. It creates a ton of pressure to accept really poorly paying work (like $300/week).
That is really interesting. The acting world is something I am not familiar with at all, so great insight for me!
Great points! I would often surprise clients when they were evaluating two job offers and I’d help them calculate the benefit package. The value of some benefits can completely flip an argument.
Agreed. Way too often we turn our nose up at a job based on base salary alone when the benefits could be amazing.
Education benefits are great. They benefit the employer as much as they do the employee.
If I ran a company, I would provide free childcare to my employees on site. I feel like that would be a great attraction to some potentially great employees.
I think you are right Michael. Education and the home/work balance are two of the most important issues in the workplace right now. I think your plan would be well received. I might even come work for you!
When I was deciding what to do after I finished my undergrad toyed with pharmacy and a big reason was because a lot of pharmacies have tuition assistance programs, they a percentage each year (usually starting with 50% then by year 4 100%) but you have to sign on to work with them for x amt of years. It’s a great idea. Guaranteed job security and less tuition payments.
That would be a really nice gig. Would they actually pay for you to go to Pharmacy school and become a pharmacist? If so, I would think would be a no brainer!
Some benefits may be alright to avoid using but others, such as free tuition benefit and a 401(k) match, should ALWAYS be used!
This is excellent advice. My company will cover a portion of industry related classes; however, I am an English major who is working at a bank, so nothing was considered “industry related” (and believe me, I tried). What I did not realize when I was looking for a Masters program is that two nearby colleges will pay Masters students a small stipend and waive tuition if they teach 1-2 classes per semester. As I want to be a professor, this would have been the ideal situation.
I wanted to add this for those who, like me, may not have been able to find a career with tuition reimbursement.
Thats awesome to hear DJ. I plan on pursing a masters within a year. Any advice?