The salary is just the tip of the iceberg. Ask the right questions and you can avoid surprises.
Job offer review, the hidden numbers
Do you know what job offer review questions to ask when contemplating a new position? I give a lot of job offers in my line of work and it surprises me how often a candidate will take a job without asking for a job offer review. The candidate hears the hourly rate or the annual salary and “accepts” the role. No questions, no further probing. I understand why these questions are not asked. It could be any one of the following reasons:
- Too excited to ask questions beyond the salary
- Feels that asking additional questions is appropriate and will jeopardize the job offer
Most candidates don’t worry about anything beyond the annual salary.
Tip of the iceberg
The annual salary is just the tip of the iceberg as it relates to the overall compensation package. Companies go through a lot of effort to put together a comprehensive offer beyond the financial component. This is all in an effort to recruit and retain you, especially in a market where unemployment is so low. The non-cash components of the offer can make a big difference.
Below are some examples that can add or take away from your cash salary. Next time you receive an offer, take the time to conduct a job offer review and review the hidden components.
Working from home
It’s OK to ask about remote work
- In a post COVID world, we are recruiting a lot of employees because the prior employer was asking employees to return to the office. If remote work is important to you, feel free to ask if it is available.
- Remote work will save time and save expenses on gas (with the Ukraine conflict, gas prices are increasing). Both of these can add to productivity. (Just be sure to show your face occasionally to build relationships.)
Medical Benefits
- Is your family physician in the carrier’s network? This can be especially important when you have children or visit a doctor on a regular basis.
- How much is the deductible? If the deductible is an annual deductible, then you will need to cover all expenses until the deductible is met. If you receive an offer for $50K and have an annual deductible of $3K, your take-home pay after your deductible is $47K. Also, consider that taxes will be taken out of money earned before you pay that $3K deductible. You may need to earn $3400.00 before taxes so you can meet that $3000. This makes your annual salary $50,000 – $3400.00.
- Does the company offer an FSA or HSA program? This is a program where you can sock away pre-tax money to pay for medical expenses like deductibles, glasses, or even childcare. This can help with point number 2 above.
- When do the benefits start? Some companies will start new hire benefits on the first day of the following month after the start date. In companies where high turnover is a factor, benefits might not start till the third month. This expense can take away from your take-home pay.
It’s completely acceptable to ask for a copy of the medical plan and costs before signing the offer letter
Matching 401K and what is the vesting period?
- A company may say they have a match of up to 5%, but it may take you 5 years to fully vest into the program. Where I work, we will match up to 4% on your first day of employment. That’s right, fully vested on Day 1. Some 401K’s are set up so you are only eligible for a match of 1% after 12 months, 2% after 24 months, etc. With today’s average tenure of 2 years at a company, the 5% match may not be 5%. Ask about the vesting period.
Paid Time Off (PTO)
- How much PTO does the company offer? Some companies will start all employees at 2 weeks of Paid time off. Where I work, we offer 3 weeks of PTO and sick time to be used how you want. In addition to this, we have additional paid time off for birthdays, jury duty, death in the family, and if you are moving homes. These days can add up if you are asked to use Sick Leave.
Commute subsidies
- Bus Pass: I live in a city where companies of a certain size are required to help minimize the traffic into the city. The way that most companies solve this is by providing a subsidy for public transportation. But most companies are not just going to offer this up. (We do offer it up and we fully subsidize this cost to the employee) Make sure you ask otherwise this can be an additional expense.
Annual salary reviews
- Have you asked how often salary reviews take place? If a company doesn’t have a formal program, your salary may not be reviewed on a regular basis. Larger companies will have a formal review cycle. Smaller companies and start-ups may not. Don’t think that asking for a review will make you look greedy. Take the approach that you are going to be growing your skillset and adding so much value the company should want to give you an annual review.
There are a number of items in a compensation offer that can add or take away from the annual salary. It is perfectly acceptable to ask about any one of the above items and I am surprised when someone doesn’t. You may not be able to do anything about a medical plan deductible, but at least you know what you are getting into. Read the fine print and don’t just worry about the cash piece of your offer.
See you at the after-party,
HRNasty
nasty: an unreal maneuver of incredible technique, something that is ridiculously good, tricky, and manipulative but with a result that can’t help but be admired, a phrase used to describe someone who is good at something. “He has a nasty forkball”.
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