I keep hearing and seeing salary surveys that say I should be making about $10,000 to $20,000 more than I am currently making, but I find it very hard to compare when you take in all the factors of cost of living, profit sharing, medical benefits, and working environment. Is the grass greener elsewhere?
Companies normally focus on the total rewards package they deliver to employees rather than on base pay alone. Total rewards include compensation, benefits, and work/life balance programs such as flex time and telecommuting.
The average merit budget for most companies hovers around 4 percent. Companies also spend anywhere between 20 and 40 percent of their payroll budget on other benefits such as health insurance, paid vacations, and matching contributions to 401(k) programs. In terms of your own compensation, that means your benefits could represent an additional 25 to 67 percent on top of your base pay.
Any program an employer offers to employees is at a cost. Therefore a company may decide to establish a competitive total rewards package in which the base pay may fall below the median or even the 25th percentile in the Salary Wizard, even though other aspects of the total rewards package are externally competitive.
Everything is negotiable, but always make a list and compare what your company is offering and what you can get somewhere else. Some companies provide their employees an annual personal statement detailing what the company has spent on each employee beyond their base pay.
Before you go looking for another job, make sure you are leaving for something better than you already have. It could be a larger base pay or better benefits.
Some companies disclose their pay philosophies to employees. Since your company has told you it focuses on total rewards, ask someone in the HR department to explain its rationale for determining the value of your total rewards package.
- Erisa Ojimba, Certified Compensation Professional