Employee benefits are a form of indirect or non-cash compensation that the employer provides either because they are mandated by law or because employees are easier to hire or retain if they are offered benefits.
Employment benefits are one of the most overlooked aspects of evaluating a job offer.
Sure a great salary is where your main focus should be. But the benefits can add up to a significant part of your compensation package. So how do you go about evaluating what those benefit bucks are worth?
Depending on the industry and who you talk to the general rule of thumb is that for $1 spent on wages there are from $1 to $3 spent by employers for benefits. Since this will vary somewhat by occupation this page will give you an approximate idea of the value of the typical healthcare employee benefit package.
I will assume a
wage of $20 per hour for the purposes of this illustration. Keeping in mind that the national average healthcare salary ranges from a
low of $12.00 to over $150.00 per hour.
Lets start with everyone's favorite employment benefit; vacation accrual. The average employer will give you approximately two weeks of paid vacation. if you earn $20 per hour that means you will earn approximately $1600. Obviously, if you work in a job where the ability to earn more vacation time, then the value goes up. If you earn 4 weeks of vacation then the value of the benefit becomes $3200.
Most employers will grant you sick time for the occasional flu, sick child and other short lived health crisis. If you are granted one week of sick time each year then you will have the potential to earn approximately $800 in value. Of course, not every one will use the whole week.
If you work for an employer who allows you to bank sick time as a type of short term disability bank you can potentially save up to 12 weeks of sick time to be used in case of emergency. The potential value of this employment benefit is $9600.
There is no absolute standard for what employers pay for this employment benefit. The national average cost for healthcare paid for by employers in 2012 is approximately $875 per month. If you have an employer willing to spend the money this benefit is worth up to $10,500 per year.
The majority of healthcare workers will usually work in a hospital or clinic setting. Frequently these employers will cover the cost of some preventive health tests and the cost of routine health care vaccinations such as the flu shot each year. Some examples of the types of things covered include PSA, blood work, chemistry panels and even routine EKG's. The approximate value of this benefit is $500 per year.
One overlooked employment benefit is education dollars. Many employers will pay for you to keep up in your profession and to improve your knowledge. Of course, healthcare workers are required to know and maintain proficiency in CPR and advanced life saving techniques. Mot employers pay for keeping your CPR card current. Other specialty certification's that employers may pay for include ACLS, PALS, and ATLS. Some examples of things paid for can include; travel expenses, books, fees and tuition and paid time while attending the class. Estimated value is $1000-$2000 annually. Be wary of employers who don't pay for continued education and ongoing certification. That's up to an extra $2000 per year you will be paying for out of your own pocket.
The average number of paid holidays is approximately six. This adds up to approximately 48 paid hours per year for a benefit of $960 extra per year. Of course, many healthcare workers wind up working the holidays for an additional premium of being paid time and a half or double time for working the holiday. For some that's not considered an employment benefit and for others it is.
There are generally two types of retirement plans. One is the old style plan where you contribute nothing and the company puts in the money every month to a pension plan. These plans are virtually non-existent for healthcare so I will talk about the second type of plan called a 401K or 403B retirement savings plan.
A 401K or 403B account allows you to put money in a tax deferred account. What this means is that if you put 10% of your paycheck in every payday you don't pay taxes on that 10%.
Many employers will add an extra 1% to7% into your 401K in addition to any other salary they pay you. Most of them have a waiting period (vesting) before the money becomes officially yours. If you quit before the vesting period is complete you forfeit all or a portion of the money they put in.
If you work at a hospital that offers this benefit be sure to find out how much they will match your contribution and what it takes to be vested or have 100% of the money be yours to keep. This benefit can be worth up to $2912 per year deposited into your tax deferred retirement savings account if they contribute 7% of your salary. How soon the money becomes 100% yours will vary. Some employers make you work as long as 7-10 years before you are vested.
Believe it or not this is a benefit. Because in addition to the hefty 6.7% that you pay for social security your employer is contributing a matching amount of approximately 6.7%. Kind of hard to believe that social security is going broke isn't it?
Assuming you worked 2080 hours per year and earned the average wage of $20.00 that would be: 2080 X 20.00 X .067 = $2787.20
Note: Social Security, Workman's compensation, and unemployment insurance are all mandated by law. Employers have to provide these benefits. Because it is mandated some sites do not consider these fringe benefits in the same way that vacation or other perks are.
Employment Benefit Totals
Assuming a conservative estimate these benefits can add up to over $10,000 on the lower end and well over $20,000 on the upper end of the scale. One popular benefit and wages estimator site placed the median benefits at over $20,400 for a typical western medium sized community for a registered nurse. The next time you size up a salary offer be sure to ask about the benefits too.