Why you need to take benefits into account

I’ve posted about negotiating your salary before. But now I’m here to remind you that salary is not everything. When you’re considering a job offer, you MUST also take benefits into account before you decide.

A real example, from a client yesterday. She got a terrific  job offer, offering more than 10% above her current salary. And while she was doing the happy dance (and should!), I had to rein in her excitement and make her do some math. “Have you examined the benefits package? No? Oh, girl. Okay, sit down.”

While it may not seem that big of a deal, benefits can make or break an otherwise great offer. I’ll use my own most recent job offer as an example. Recently, I was offered a job that pays 9% more than I make now. But before I could jump up and down and accept, I had to take a deep breath, get some coffee, sit down and read the benefits. Let me walk you through this.

I started with medical insurance. Because I had networked with others at the organization, I knew that the consensus was that the 2 medical plans, uh, sucked. And so I had been advised that the top-dollar of the 2  plan options was worth it, because the base plan was inadequate. With that in mind, my family’s insurance per paycheck would go from $112 / paycheck to $200. (That’s for me + 2 dependents.) And then further, reading through the coverage and providers, what you get for that $200/paycheck was way less access & options than we have now. I thought I had a loophole out of this when I discovered that they do not require you to opt in to either of their plans. Great! We could all switch to my husband’s great insurance so that we could continue to see the same doctors (which is key for me, personally, since I have an autoimmune disease). Except the cost of him going from covering himself to covering all 4 of us would mean his take-home paycheck would go down about $200. Not a deal breaker by any means, but I jotted this down.

Alright, but my pay would be more so surely my take home pay – especially without medical insurance for 3 of us on it – would go up, right? Yes, but only by about $200/ paycheck. Wait, what? Retirement. They require you to join their retirement plan, at a minimum of 12% of each paycheck. Okay, so I jotted it down the new number for my takehome pay. (By the way, paycheckcity is a great resource for figuring all of this math out!)

If you’re still following along, what this means is even with me making more…we’re at a net gain of $0 here, between my husband’s paycheck going down from taking on more insurance and mine going up but only slightly with higher retirement fund contributions.

Good thing I had done the math up to this point. Because the culture at this other organization was that it is a very strict, traditional 8-5, no exceptions. My current workplace’s scheduling flexibility means that I can work 7-4 and thus need only before-school care for my kids. But with an 8-5, and my husband also working a strict 8-5 (alot farther away) would mean that we’d have to also add daily after-school care. For 2 kids. So taking the new job would mean that my childcare costs would go up $600!

So even with way more pay, and good benefits, we would come out taking home about $400 LESS per month than we do now.

I ended up turning the offer down for those reasons. Now are pay + benefits all you should consider? Of course not! People need to switch jobs and consider offers for all kinds of reasons – different work, better retirement contributions, different work culture, flexible schedules, new challenges, a better manager, a more engaging workplace, many of which you cannot quantify. But you cannot skip the critical step of reading the benefits package and thinking it through so you are considering all of the effects of a job change on your life.

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