Do you really understand employee compensation? Most people focus on salary. But your pay is just one part of the equation. Your entire compensation package includes a variety of traditional and non-traditional benefits, which you can use to improve your financial standing — or to help you maintain that ever-important work-life balance.
When you're looking for a new job or simply assessing your current position, you should make sure the pay is on par with the salaries of others in your position. But also keep in mind the other benefits offered at the company, like the ones outlined below:
All U.S. companies must comply with certain federal and state laws that require specific benefits and mandate that employers:
- Grant employees time off to vote
- Withhold state and federal taxes from employee paychecks and send withholdings to tax collection agencies
- Pay disability insurance (some states)
- Pay unemployment and worker's compensation insurance
- Adhere to the Federal Family and Medical Leave Act
The Affordable Care Act stipulates significant changes to employer requirements around healthcare, some of which became effective in 2014; others will continue to be phased in through 2017.
Some additional benefits are not mandatory but are so commonly offered they are usually expected, especially at larger companies. They include:
- COBRA benefits
- Dental and vision plans
- Life insurance plans
- Medical plans
- Paid vacation, holiday and sick days
- Retirement plans
Other types of employee compensation
There are a number of other benefits that are increasingly attractive to employees. Sometimes referred to as "cafeteria plans," these allow employees to pick and choose what services they want. Offerings may include:
- Discounted products and services, such as for gyms, museums, zoos, restaurants, early-bird tickets for sports and cultural events, magazine subscriptions, or electronics
- Private or subsidized transportation to and from the office
- Pre-tax commuting passes
- Telecommuting opportunities, flextime and other work-life balance options
- Professional development opportunities
- Adoption assistance
- Tuition reimbursement
- Extended options for parental leave, sabbaticals, etc.
Although no one is returning to the 1960s' three-martini-lunch days, some companies offer employees free soft drinks in addition to the usual coffee and tea. Free breakfasts and lunches are also becoming more common, and some companies even provide dinner to employees when they work late.
The only limit to nontraditional perks is the imagination of company managers. Other in-office treats employers may use to entice top talent include:
- On-site dry cleaning
- On-site haircuts, massage and spa services
- On-site child care
- Concierge services for dining, entertainment and travel
How does it all add up?
Employee compensation encompasses much more than just your salary. And there's good reason for that: Executives consistently find it challenging to keep top employees and maintain productivity. An attractive benefits package not only retains valuable staff but also helps maintain high morale.