Getting the Most From Employee Benefits

When it comes to making the most of your job, salary is only part of the picture. The benefits package employers offer is a critically important component - and one that current and prospective employees too often overlook.

To prevent that from happening to you, we've collected some of the most important information to consider when making the most of your job.

The Business of Employee Benefits

For employers and employees, benefits are a two-way street. Workers tend to be happier and more productive when their companies offer a full complement of supplementary benefits. On the other hand, those doing the hiring can more easily compete for talented workers by offering an attractive amount of non-salary compensation.

The most common employee benefit in the U.S., of course, is health insurance. Many people don't realize that employer-based healthcare is a fluke of history. Because of wage controls instituted by the U.S. government during World War II, many companies began offering health insurance as an inducement for new workers. The idea proved so popular that healthcare and employment became inextricably linked after the war ended.

Along with health insurance, private companies have historically offered pension plans to workers as a primary benefit. These defined-benefit pensions aimed to support retired workers by paying them a percentage of their previous income every month after finishing their careers. While defined benefit pensions are typically an excellent financial deal for workers (often requiring little to no employee financial contribution), corporations have been phasing them out for years in favor of a new system - the 401k.

The 401k is similar to a pension except for one crucial thing - it places the responsibility of securing a financially independent retirement on the worker rather than the company. Employees agree to invest a percentage of their yearly salary in a retirement account. They can earn an employer contribution that matches up to a certain percentage.

Like employer-based healthcare, many people assume the 401k has been around forever. It was created in the 1980s by an obscure financial advisor trying to help his clients earn a tax break. The 401k was never designed to be a standard workplace benefit - let alone the default retirement planning option for most workers.

While health insurance and retirement contributions are the most common forms of employee benefits, plenty of other non-salary compensation programs are widely available today. Many firms offer workers expanded maternity and paternity leave or additional vacation time, the opportunity to purchase subsidized life insurance or discounted stock options, and cafeteria plans.

The Takeaway

When considering whether or not to accept a new position, it's essential to look beyond salary figures when weighing the value of an offer or your current job. The right benefits package can help you stay healthy, save for retirement, and enjoy more time away from the office.

And that's a combination sure to benefit anyone.