A fairly common mistake people make when deciding whether or not to accept an offer is to only think about the number printed in their offer letter. When evaluating whether an offer is fair or not, they only think about the actual dollar amount of their proposed salary.
This is very short-sighted. Employers have become very creative in finding ways to compensate their employees as part of comprehensive packages of which the salary is really just the most noticeable part. When thinking over a job offer, try to see it as a complete package. What other benefits are being offered, what is their monetary value, and what is their value to you?
Health, dental, vision, and prescription coverage have become fairly standard offerings, but what are the details of the plan? Will you pay less in copays for office visits and prescriptions? Is the coverage better?
And what about time off? Are you getting more time off than at your previous position? Employers have to count that as part of your compensation, because if it’s an accrual system, then they have to pay you for any unused time accrued. What kind of sick and personal time do you get?
Contributions to an IRA or 401(k) are also a high-value component of compensation, and one of the easiest to value. If an employer makes a 5% contribution to the retirement account of an employee making $50,000 per year, then they are actually paying the employee an additional $2500 per year.
And then there are all the other perks and benefits that a company might offer. In a major metropolitan area, a lease in a parking garage costs $3000/year, and many employers pay for them. There might be a gym in the company’s building that employees can use- Gym memberships are often worth $500/year.
When all the benefits are taken into account, they can raise the value of a compensation package by 25-35% of the value of the salary component. Don’t make the mistake of only looking at the number printed next to the $ on the offer letter. Dig a little deeper and find out what they’re really offering you.