When considering a new position, or reevaluating your current contract, it's always in your best interest to negotiate for a higher salary. However, when considering your total compensation (meaning everything the company is giving you in exchange for the work you provide), there are so many other factors that play into your bottom line that go beyond just salary. Here are six areas that contribute to your total take-home compensation that should not be overlooked when negotiating your next contract:
1. Healthcare package
A huge factor to consider when evaluating your salary is the healthcare package provided. If the organization you are considering does not offer any healthcare benefits, consider all of your existing medical conditions, and how much those would cost you out of pocket without a healthcare plan. If your company does have a benefits plan, look into the fine details of what they are offering. How much are the deductibles and premiums in each area?
Keep these numbers in mind when calculating your total compensation, especially if you know of existing medical conditions or upcoming procedures.
2. Profit sharing or stock options
Some organizations might offer profit sharing, bonuses, or stock options. These are different ways that you, as an employee, can profit from the success of the organization, and earn additional salary. If your organization is doing well, and you are offered shares, you could see a huge return on investment in the long run. While you can't live off your bonus, find out prior to accepting what the bonus structure would look like, and how often it is typically paid out. When negotiating your salary, it is important to consider whether these added benefits might be a worthwhile incentive for you to consider as part of the overall package.
3. Company matching
Many organizations across Canada and the U.S. will offer RRSP/401k matching. These company perks are not only a great way to incentivize savings and retirement, but also earn free money! The average 401k match across organizations, according to Investopedia, is 50 cents on the dollar of up to 6% of your salary. If you know that you can save enough to earn that match, consider that "free money" as a part of your total compensation. Taking advantage of these plans is like accepting a 3% to 6% raise each year.
The expression "there are three things that matter -- location, location, location!" definitely holds true when discussing salary. If your new position is offering you a higher salary, but will require you to commute and buy a car, you'll need to recalculate your salary and consider that cost. Let's say your lease is $300 a month, parking $100 a month, insurance $100 a month, and gas $200 a month, all together that will run you $700 a month, or $8400 a year! If you're considering a new position that has a lower base salary, but would allow you to work closer to home and ditch your car, consider adding that cost savings to your salary.
5. Food provided
People spend an average of $2,746 a year on packed and purchased lunches. When evaluating a new organization, look into whether or not they provide free lunch, snacks, or even coffee, as this can all add up. A Starbucks a day will cost you $1,221, so don't overlook this small perk. If these perks are provided, consider adding that $2,746 average for lunch and $1, 221 average for coffee onto your salary, as it would be money saved each year.
6. Lifestyle and other fun perks
Discounts and reimbursements on things like cellphone plans and gym memberships are other hidden factors that impact your bottom line. If you work for a company that you frequent as a consumer, corporate discounts could be another factor in your decision.
Of course, there are other nonmonetary perks that come with any job. Things like work-life balance, freedom to work remotely, and opportunities for learning and development are intrinsic motivators that are hard to compete with. There are so many factors to consider when evaluating your total compensation. These are just a few typical areas where you, as an employee, can earn more beyond just your salary. When negotiating, consider the areas of your life that are most important to you, and really focus on companies who stand behind that with what they have to offer!
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