NEW YORK (CNNfn) - Gym discounts. In-house childcare. Four weeks vacation.|
If it seems as though everyone’s benefits keep getting better while you’re stuck in the same dead-end job with two weeks off and no retirement plan -- you may be right. A growing number of companies are offering better and more varied benefits in an effort to attract and retain valuable employees.
But in many cases, those perks come at a heavy price -- a less generous salary.
"Even though we have a very tight job market and a booming economy, salaries have not increased that much,” said Ron Krannich, career consultant and co-author of Dynamite Salary Negotiations. "So if you are looking to jump ship, you might find you aren’t able to increase your salary by the 10, 20, 30 percent you might have thought.”
More employers are turning to benefits -- rather than cash -- to recruit workers partly because high overhead costs and competitive pressures have made higher salaries difficult to accommodate. Companies are also responding to a trend that has a growing number of employees putting quality of life ahead of cold, hard cash.
Unfortunately, that trend has made comparing job offers more difficult than ever.
"The situation today is so much more diverse,” said Maryanne Wegerbauer, author of Job Offer! Framing and Negotiating the Employment Package. "Organizations used to have this very structured, paternalistic approach to everything, including compensation. But now there is so much more flexibility, in terms of compensation and work arrangements in general.”
So how do you compare a $40,000 a year, 9-to-5 job with 3 weeks vacation and a great stock plan to a $60,000 a year, 8-to-7 position with a solid 401(k), but little time off?
It’s all about setting priorities, say experts.
"Once you establish what’s important, you have a yardstick to measure various offers,” said Jack Chapman, author of Negotiating Your Salary: How to Make $1,000 a Minute.
Job satisfaction, professional development and geographical challenges, such as commutes or relocation, should all be taken into account, as well as potential for growth and company culture.
"Are you doing things you are good at and like? Is there room for you to climb up the ladder? Do you like the management style,” said Chapman. "It isn’t just money that makes you pick one over the other.”
Childcare benefits may be the deciding factor for one person, while that extra week of vacation makes the avid traveler’s day.
Quantifying the offer
Once you have actually received a job offer, you will have to sit down and compare it to your present situation -- or competing job offers, if you are so fortunate.
"You really have to treat it like a budget. You have to sit down with a pencil and paper and actually quantify your benefits,” said Wegerbauer.
In addition to your basic salary, write down any other monetary benefits you receive and calculate what they’re worth annually. A $200 monthly contribution to your 401(k) that is matched at 50 percent, for instance, is worth $1,200, plus interest earned.
You should also add bonuses, stocks and stock options, disability insurance and any tax-deferred savings or pension plans for which you might be eligible.
And don’t forget less tangible benefits. Flextime might not be part of your salary, but it can reduce the amount of money you have to spend on childcare or cut the number of vacation days you have to use to take care of your elderly parents. The same holds true of jobs that allow you to work at home.
Free gym memberships could be saving you $500 a year or more in after-tax expenditures. And dental insurance might be something you can’t live without if you’ve had three root canals in the past year.
But don’t disregard basic compensation too easily, either.
While Krannich warns against being too greedy, he advises: "You shouldn’t waste your time looking for a new job that isn’t going to give you at least a 15 to 20 percent raise.”
What’s negotiable? What’s not?
Once you have a good sense of what’s on the table, you can begin the negotiations.
But be careful. While many career consultants insist everything is negotiable, there may be limits to what you can bargain for.
Defined contribution retirement plans, such as 401(k)s, are regulated by federal law and cannot usually be adjusted for individual employees. Medical benefits also tend to be non-negotiable.
Keep in mind that you’ll probably have more room to negotiate at a small to medium-sized company, whose benefits are less set in stone than those of a larger corporation. And the higher up you are on the totem pole, the more likely a prospective employer will bend the rules for you.
"The flexibility will be much higher for individuals coming in at the most senior executive levels,” said Wegerbauer. "That’s also true for people with skills that are in high demand or someone who is a very seasoned professional.”
Having said that, you almost always have more negotiating power than you probably realize -- if you have a good sense of what’s negotiable and what’s not.
The company in question may not be able to change its 401(k) plan for you, but if you are walking away from a program that matches 150 percent of your contributions, there may be other ways they can make it up to you.
Signing bonuses or supplemental annuities, for instance, are often used to compensate new employees for "lost” benefits. Even perks as simple as free parking or bigger expense accounts can lessen the pain and may be more open to negotiation than traditional benefits.
The bargaining table
Figuring out what the going rate for a given job is can be one of the best strategies for conducting a successful negotiation.
By establishing your value in advance, you will be more confident when the negotiating process begins. You’ll know you aren’t asking the company to go out on a limb by hiring you at a given rate.
Professional associations can provide salary information for positions in your field and newspaper help-wanted ads may also yield clues. The Internet can be one of the best resources for figuring out your worth. Just be sure you are getting your information from a credible source. JobSmart.com provides links to salary surveys for a wide range of markets and professions.
Be sure to focus on your value and what you plan to add to the company, rather than your current compensation.
"You need to let them know that you’ve done your research and that your research shows that that the right salary range for the position is (for instance) $50,000 to $60,000,” said Krannich. "Your salary history is irrelevant.”
And remember while it’s important to be firm, you don’t want to be abrasive.
"How you negotiate is really important. You don’t want to be playing dumb games... and you don’t want to come off as a used-car salesman,” said Krannich. "You want to make sure you are getting off on the right foot (with your future employer.)”