Salary & Benefits: What you need to know

Salary & Benefits: What you need to know

By: coopcom
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Salary & Benefits: What you need to know

Kelsey Newsham | OLC Host

As graduation approaches and the onset of summer positions come to the forefront, many soon-to-be employees may be faced with the dreaded conversation about salary and benefits. Before taking a permanent or contract position, job seekers need to understand the, as some would say, art, of negotiating salary and benefits.

According to the University of Toronto employer poll, 74 % of new hires have unrealistic salary expectations. This could, in part, be largely due to a lack of education surrounding how to negotiate salary and benefits, along with what to expect. While all compensation packages, even among different positions within the same organization, vary, there are some standard elements to a benefits package and an art to negotiating them.

Components of a Compensation Package

Compensation packages vary from organization to organization, but there are basic elements that should be included in all packages.

Base salary – this is the compensation received for the job that you have been hired to do, often articulated by dollars per year.

Benefits – these pertain to your physical and financial health, and your lifestyle, . Common benefits include health, vision and dental coverage, pension plan, insurance, daycare, vacation, tuition subsidies and discounts off exercise enrollment.

Bonuses – the more responsibility you have, the more likely your compensation will include bonuses. For those considering some types of sales-based employment, bonuses or commissions may also factor in. Common types of bonuses are profit sharing, gain sharing, instant incentives and recognition awards.

 

Negotiating for the Compensation Package

When negotiating your compensation package, the first thing to remember is to relax. Human Resource employees are used to negotiating with employees and expect numerous questions. The goal with negotiation is finding a solution that both you and your employer can feel good about. Keep in mind that due to a changing economy, some employers may be unable to negotiate or have begun to cut back on their compensation packages. Be prepared for limited flexibility on the part of the employer as the economy declines.

Prior to Negotiating

Typically the best time to negotiate salary is after you receive the offer and before you accept it, so before coming to the table, do some research:

  1. Research your profession’s average salary range and negotiate based on facts
  2. What is your “best outcome” package? Keep it realistic, but optimistic
  3. What is your “minimum offer” position? When will you reject the job offer?
  4. Determine a target salary range as opposed to a set amount
  5. When application forms ask for your salary and benefits requirements, say "They are negotiable" — without knowing the details about benefits and the position, you can’t accurately select a salary figure.

 

During Negotiation

When in the negotiation process, there are a few things to consider:

  1. Remember that salary and benefits are about more than just cash. You can negotiate on, for example, healthcare and pension contributions, the number of days of vacation you will receive or even daycare.
  2. Consider the cost of living if you are moving to a new area. If it’s higher, you can suggest that you be paid a differential.
  3. Keep in mind that some components of your compensation package might be non-negotiable. Entry-level positions are often attached to job grades with preset salary ranges. If this is the case, focus on the aspects that might be negotiable including starting date, date of first salary review, mentorship, or education assistance. If you’re unsure, ask what is negotiable.

Questions to Ask

Asking questions are encouraged and a great way to dive deeper into some of the compensation components. You could discover that you can opt out of life insurance and pick up three extra days of vacation. Remember, you won’t know until you ask. Here are a few questions to get you started:

  • When does coverage begin for the various benefits?
  • Does the employee pay for health insurance coverage? If so, how much for individual coverage and/or family coverage? Is the premium deducted from my paycheck? How much is the deductible?
  • Can I review a summary of the health insurance plan options? What restrictions and limitations are there? What about pre-existing conditions?
  • How much sick time, vacation time, and holidays are provided?
  • Are there educational and training benefits? If so, are they available for my family, as well as for myself?

 

Finally, look to what you value the most when deciding on the compensation package. Base your decision on your individual needs instead of what other people have chosen. Look at the package as a whole; salary, benefits, additional perks, and accept or reject the job based on the whole package as opposed to one aspect of it.

 

References

BC Jobs Career Advice

About.com

University of Toronto Career Centre

 

Beyond the Article

BC has created the Provincial Employment Standards to refer for a list of rights for both employers and employees.

Be in the know, read “Know your Rights: A Guide to Employment Standards” for more information on transitioning into the work world.

Looking for work? Check out Career Services hot job postings, browse Career Services job sites, or login to Symplicity (the WIL job postings system).

Posted on November 07, 2010