Great benefits can help increase job satisfaction and help you make or save more money over time. Here’s what to pay attention to when comparing employer benefits. Benefits packages—including health insurance, retirement plans, vacation and sick leave, and life and disability insurance—can represent up to 30% of your compensation.
Retirement Plan
There are different types of retirement plans, and companies may offer a combination that includes more than one. You can start to evaluate them by defining your terms. Some companies offer what is known as defined benefit plans, which most people would call traditional pensions. Employers offering defined benefit plans make regular contributions to the plan, and the plan guarantees a certain amount of monthly income for the employee in retirement. The other common option is a defined contribution plan, which includes plans like the 401(k). In this type of plan, employees make regular contributions to the account through their pre-tax paychecks. The money is invested and may grow over time, but there is no guaranteed return, and the employee manages both the investment and the distributions. Small companies may instead offer an individual retirement account (IRA), SEP IRA, or SIMPLE IRA. These work like a 401(k), but have different contribution limits.
Health Insurance
If you are considering a full-time job at a mid-size or large company, health insurance will likely be part of the benefits offered. 71% of full-time employees at U.S. companies with more than 100 workers have access to health insurance through work, according to the Bureau of Labor Statistics. If you have an option, look for the coverage you need, check if your current doctor is in-network, and compare how much each plan costs in terms of monthly paycheck deductions as well as deductibles, co-payments, and prescriptions.
Dental and Vision Coverage
Just 50% of Americans have dental and vision insurance, either through their employer or via private insurance. Dental and vision coverage will not likely sway your job choice, but if you are considering two offers, check to see if your providers are in-network and how much you will pay in annual premiums, co-pays, and deductibles. If one employer doesn’t offer dental or vision coverage, or there is a high deductible, you should factor that into your monthly expenses and take-home pay.
Life Insurance
Nearly two-thirds of full-time employees are offered life insurance through work, and it’s one of the most popular benefits. 98% of people participate in their company’s life insurance benefits. It’s inexpensive, often available without any physical tests, and typically pays at least a year’s worth of salary should something happen to you. Find out if the company pays for coverage, and if you as an employee can purchase additional coverage at a discounted rate.
Disability
Companies with more than 100 employees will probably offer some sort of disability insurance benefit. But most of it is short-term disability, which covers a percentage of your salary if you are out of work for a period of time that goes beyond your allotted vacation or sick time. The less common option is long-term disability, which is offered by less than half of U.S. employers, according to LIMRA, a financial services trade association. Since an estimated one in five employees will miss work due to disability, insurance that covers months or years of missed work if you become ill or injured outside of work is a valuable benefit.
Vacation Time
Vacations are not guaranteed in the United States, but according to the BLS, the average private sector employee is awarded around 10 vacation days. The number of days you earn generally increases the longer you stay at the same company. In 2021, one-third of private industry workers with more than 10 years of service received between 14 and 19 vacation days. A job offer that includes more than that may be worth considering if time off is important to you.
Work-Life Balance
Quality of life is more difficult to quantify, and it may be difficult to get a clear picture from a prospective employer of how life will be on the job. Learn about the hours you are expected to put in each week and speak with others at the company. Remember, your time has value. If your workweek is 40 hours, you are earning more per hour than if you put in 60-hour weeks.
