How to Evaluate Employer Benefits (Part 1)
A challenging task for job candidates is how to evaluate a prospective employer’s benefit offerings. Many employers claim to provide competitive or comprehensive benefits, but what does that mean? How can you compare benefit packages to ensure you’re getting the best coverage?
Before you start your research, make sure the job/position you are interested in is benefits eligible. Due to the significant cost of providing benefits, many companies limit the availability of some benefits to specific classes of employees. Typically, full-time employees are eligible, although what is considered full-time can vary. Sometimes part-time employees are also benefits-eligible if they work a certain number of hours.
The “Big Five” Benefits
In this series, we’ll take an in-depth look at what I consider the top five benefits: medical, retirement, paid time off, disability, and life insurance. The good news is that most employers, particularly large ones, offer packages that contain very similar offerings in each of these essential areas. However, there are nuances in the specific design of the benefits and the amount of your financial contribution required to use them. These nuances are based on each company’s industry, culture, budget and the unique needs of their employee population. Before we dive into each of the Big 5, here are some steps you can take to begin forming a big-picture understanding of prospective (or current) employer’s benefits.
Request a Benefits Guidebook
Most employers have a Benefits Guidebook that provides an overview of their entire benefits package. A good place to start your comparison is by reviewing that material. You probably don’t need to study it like you are prepping for final exams; but give it a thorough review. Highlight specific benefits that are important to you, as well as those that may be new to you. Equip yourself with a basic understanding of how they work and write down questions you have for your next conversation with the company’s representative.
Ask the Recruiter About Online Tools
Many employers provide resources to assist with understanding of their benefits package. These may not be available to you until you are actually hired, but it doesn’t hurt to ask.
Benefits are Subject to Change
While most employers have similar benefits. There are people at the hiring company that spend time benchmarking the benefits package to make sure it is competitive and will help our company attract and retain employees. Sometimes there are budget or vendor performance issues (hint: benefits are costly to the employer), and the employer may consider benefits adjustments.
Most employers will periodically tweak benefit plans to make them more attractive and cost effective. As you compare packages, keep in mind that plan designs and contribution rates are subject to change from time to time. Usually this happens once at the beginning of the calendar year (but timing may vary by employer). Employers should provide communication about changes and provide the opportunity to make adjustments as you enroll in benefits for the new benefit year.
Consider the Big Picture
As you evaluate a job offer, benefits and compensation are important components, but don’t forget to consider less-tangible factors that can impact your long-term job satisfaction. These include:
- Your commute duration and traffic hassles
- Your comfort with your supervisor and team members
- Opportunities to grow and develop
- Your comfort with the company’s culture and mission
Because these elements aren’t likely to change, they often have a larger impact on your day-to-day happiness than a difference in the employer’s matching contribution for your retirement plan.
Next Time: Medical
In the next article, we will talk about common medical plan options, copays, provider networks, and your personal contribution amount.
Written by Brian Mitchell
Brian Mitchell has experience leading Total Rewards strategy and implementation for large employers. He enjoyed helping his own millennial children navigate first-time employment and benefit selections. He hopes his insights simplify the process for you as well.
Benefit Boosts by Brian Mitchell© – Vol 2024-002
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