The Compensation Game

A recent post over on Forbes.com is getting some traction in social media and the perspectives are interesting.

You will find the post in the Dear Liz Ryan column where a writer poses the question as to why he should accept lower pay in exchange of ‘great benefits’ and a tremendous culture.

In this day and age these kinds of claims are a feeble attempt to justify below market compensation and you would do well to really examine the mechanics of a potential offer that might be made to you.

Many things are held up as benefits that a prospective employee should take into consideration but here are a bunch that are influential perhaps but don’t put cash in your pocket and ostensibly don’t have a monetary value when you look at compensation as a defining factor.

Cultural and environmental factors

• After work socials
• Annual holiday parties
• Beer Friday
• Business casual attire
• Dress down Friday
• A flat organization structure
• A leadership open door policy
• A fun or cool work space
• Free hot and cold beverages
• Snacks
• Sports event tickets
• Flexible work from home plans
• A nice laptop or mobile devices like tablets
• Corporate apparel
• A foosball, ping pong table, mini-golf putting course or slot cars
• A deck, a patio, picnic tables or a basketball hoop
• Gym equipment, lockers and/or showers
• Paid company lunches
• Retailer discount schemes

As  compensation plan the  following items are generally accepted as being the norm as part of a compensation package

• Health plans and benefits
• Retirement plans and benefits
• Stock options
• Personal Performance bonuses
• Corporate Performance bonuses
• Paid vacation/time-off
• Paid sick days
• Subsidized or paid public transport schemes
• Subsidized and on-site child care

Although these items have value – they are not cash in hand and ultimately that is a heavily influencing factor for employees particularly those with scarce skills. According to a survey conducted by FastCompany  the top five benefits ranked by employees are :

1. Health care insurance (e.g., medical, dental): 40%
2. Vacation/paid time off: 37%
3. Performance bonus: 35%
4. Paid sick days: 32%
5. 401(k) plan, retirement plan and/or pension: 31%

Some particularly interesting benefits offered by some prominent companies and cited by folks on Glassdoor are :

• Google provides the surviving spouse or partner of a deceased employee 50% of their salary for the next 10 years. (Overall benefits rating: 4.6)
• Adobe shuts down the entire company for one week in December and one week over the summer. (Overall benefits rating: 4.6)
• Facebook provides $4,000 in “Baby Cash” to employees with a newborn. (Overall benefits rating: 4.7)
• PwC offers its employees $1,200 per year for student loan debt reimbursement. (Overall benefits rating: 4.0)

With the COVID-19 Pandemic switch to WFH and Hybrid working circumstances for many, this now becomes a significant additional factor in evaluating a prospective employer.