You’ve done it. You’ve run the gauntlet, jumped through all the hoops, and passed multiple levels of interviews and now you actually have a job offer. Woohoo! You should just go ahead and accept it, like right this minute… right?
Slow your roll for just a sec. It turns out that there’s more to a job offer than just your salary and job title. Most companies also offer benefits packages, and you should definitely consider these when you’re weighing your options (and if you’re a super advanced job-seeker, you might want to consider negotiating some of them as well). Guest writer Kerstin Stokes reviews some of the most common benefits and what they might mean for you as a recent grad job-seeker.
Congratulations on your graduation and becoming a part of the real world! Hopefully you have an idea of what to expect while you’re job hunting. But if you’re like I was two years ago, you probably feel unprepared and at least a little confused.
It turns out that not all benefits are created equal. There are some that can make or break a job, and it’s always good to check out which benefits a company offers before accepting an offer. Below is a list of my top five benefits to look for while job hunting.
Vacation time/paid time off (PTO)
Everyone loves vacation. I remember in school getting a week off every six weeks (yay private school!), but in the real world, that doesn’t happen. If you’re a full-time employee, you can expect to work 30 to 40 hours a week, and if you work part-time, you’ll probably clock in somewhere under 30 hours. Usually people are lucky to even get a week or two off for a whole year. It all depends on the company and what kind of vacation time they offer.
Around 91% of full-time employees get vacation time, and usually if you’re working at a larger company, you are more likely to get vacation. Companies split it up differently, so make sure to ask your potential employer.
For example, some companies do vacation days by quarter (you can take a certain number of days each quarter), others do it by the number of hours you’ve worked (you earn a certain number of PTO hours each month), and some give you unlimited PTO. At some companies, you get separate sick days and vacation days, and sometimes they’re rolled all together. The best way to find out is just to ask.
[Editor’s note: Some employers list their PTO policy and other benefits in the job/careers section of their website. If they don’t, and they haven’t mentioned anything about benefits during your discussions with them, you can ask about PTO and all other benefits after they’ve made you an offer. Many companies have a one-page guide to all their benefits, and you can ask your contact if they have a similar document you can review as you consider their offer.]
401(k) plan/retirement assistance
What exactly is a 401(k), and should you care even though you’re just starting your career? In a nutshell, a 401(k) allows you to save for your retirement (often without paying taxes on that portion of your income), and yes, you should care. We cover the more in-depth answers to these questions in our post about the basics of financial planning.
Everyone needs something for their retirement years, whether it’s a 401(k) or a pension plan. It’s common for employers to match your contribution up to a certain amount (usually around 4% or 5% of your salary), meaning that they will pay the amount that you put into your 401(k) and effectively double the amount you’re saving. Usually you can elect to have your 401(k) payment taken out of your paycheck, and some companies have programs that will automatically increase the percentage that you pay each year.
Instead of 401(k) matching, some employers offer what’s called a “safe harbor match,” which means that they will pay a lump sum into your account rather than a dollar-for-dollar match.
Due to the health care reform law in 2014, most US employers are now required to offer their employees health insurance. As of 2015, businesses that have 100 or more full-time employees have to provide health insurance, and small businesses with 50 to 99 full-time employees will have to provide health insurance by 2016.
But even though companies may be required to provide health insurance, you should look carefully at your options. You may be able to choose between things like an HMO or PPO plan, or a plan with a higher or lower deductible. A deductible is the amount you have to pay out of pocket before insurance will pay a claim. So if an employer only offers terrible coverage plans with a $5,000 deductible, it’s probably not the best option for you as a recent college graduate.
You may also be able to sign up for things like an FSA (flexible spending account) or HSA (health savings account). You can elect to put a certain amount of money in this type of account each month or paycheck, and you can use these funds to pay for certain health or wellness-related expenses that your insurance plan doesn’t cover.
Companies will also usually take some of your monthly premium for health insurance out of your paycheck, so you also want to consider those deductions when you think about what your actual take-home salary is going to be.
If you’re unsure about any of these points, be sure to talk to your contact person at the company. They should be able to answer your questions or put you in touch with the HR person who can.
There are two different kinds of disability insurance, short- and long-term. Employers that provide disability plans can be a financial life-saver if you or a family member ever has an unexpected injury or illness that is non-work related.
Disability insurance is great to have so you don’t end up bankrupting yourself due to hospital or doctor bills. Your potential employer may pay all the premiums, which is an amount of money that is charged for the amount of insurance coverage, or the company may charge you a small premium for their full coverage. You can usually buy more coverage for additional charges, but typically it’s a low amount.
Family and Medical Leave
This is kind of tied in with the disability insurance, but if you or a family member has an unexpected illness or injury, most businesses will also provide family and medical leave. This kind of leave can also include: serious health conditions, childbirth or caring for a child under one year old, caring for a close family member who is a member of the military on covered active duty, or care for a parent, spouse, or child with a serious health condition.
Currently, there are no federal legal requirements for paid sick leave, so if a company offers it, it’s a pretty great deal. The Family and Medical Leave Act (FMLA) does require unpaid sick leave for up to 12 weeks and 26 weeks to care for military family members, but sometimes paid leave/vacation can be substituted for unpaid family or medical leave. But if you live in California, congratulations! As of July 1, 2015, companies will be required to give one hour of paid sick leave for every 30 hours worked. If you live in Connecticut and Massachusetts, you get paid sick leave as well. For the rest of us, it’s determined by individual companies.
Now, if a company doesn’t have one of the benefits or it doesn’t have the best features or coverage, should you turn it down? Maybe not. But knowing the range of major benefits that are offered can help you pick the right job for you. Being aware of these common benefits can help you compare your options and make sure you get the best possible compensation package.
Homework time! Next time you’re researching a company, take a moment to look at their careers page and see if you can determine what types of benefits they offer. Which are most important to you? Which are not so important? If you’ve already gotten an offer, be sure to find out everything you can about the benefits package. Don’t be afraid to ask questions!
Did we miss anything? Are there any benefits that we didn’t include on this list that you think other twentysomethings should consider when evaluating an offer? Leave a comment below to let us know!
About the author: Kerstin Stokes is a graduate of the College of Idaho interested in helping others learn about marketing and helping millennials like her understand business and achieve their career goals. Kerstin is currently working to start her writing career as well as seeing where the wind takes her. You can find her hanging out with her cat, looking up tasty recipes for baking, and writing articles across the internet.