Perks or Pay?

Jan 23rd, 2011 | By | Category: abundance, Career advice, career challenges, career choices, challenges, economy, focus, mentor, negotiations, perks, skills, strategy, stress, success, tactics

Most of us focus only on salary when negotiating our employment packages, but it is worth your time to evaluate what perks may be worth to you in both money and quality of life. There is more pressure than ever for businesses to hold down costs, with special emphasis on wages. It may be easier and more profitable to negotiate perks instead of a pay increase.

When we think of perks there are several things that spring to mind. Older movies always used the key to the executive bathroom as the most sought after perk. It was the ultimate symbol of making it into upper management. Often perks do not add directly to your bottom line, or increase your quality of life, but pave the way for opportunities and advancement. Although we are all aware of perks, we often do not think of their value, or how they fit into our personal situation. This can put us at a disadvantage when we have to decide between pay and perks. Also, in this era of tight budgets you may be more successful in negotiating for perks instead of pay.

Perhaps a first step in analyzing the benefits of perks is to identify the perks that are available or you would like to be available. For example, telecommuting and in-office daycare used to only be ideas that employees wished were available that are now a reality, and becoming more and more common. You don’ t have to think through all of the mechanics your perk ideas, the concept is just to give your mind some experience considering conditions or circumstances that may be beneficial. Several of the Dot.com companies are noted for the perks they provide employees. Some of the most well known are free snacks, lunch, soft drinks, gyms and exercise facilities to name a few. These young innovative companies are leaders in creating the evolving workplace environment. Their philosophy is simple create an environment people like – for a happy worker is a more productive and creative worker. One has only to look at office dress codes to see the wide spread influence of the more laid back Dot.com atmosphere.

The monetary benefit of some perks is easily calculated. For example, a perk of a free parking spot saves the cost of parking. By taking the amount you spend on parking by the number of days you drive to work in a year will determine your monetary benefit. If you work five days a week, get two weeks of vacation and 10 holidays off per year, the total numbers of days would be 52 weeks in a year – 2 weeks vacation – 2weeks of holidays or 48 weeks X 5 days a week = 240 days. If parking were $10 a day, your monetary benefit would be $2,400 a year. There may also be a convenience and prestige benefit to having a reserved parking spot to consider. Free snacks, soft drinks, lunch, childcare, etc. all have a monetary benefit. However if you do not normally eat snacks, or have children, etc some company wide perks will be of little or no value to you. Telecommuting, public transportation subsidy, company supplied cell phone, etc have a monetary benefit, if you can replace an existing expense like commuting, public transportation, personal cell phone, with the company supplied perk. In most cases there is no income tax on these perks so there is an additional 25 percent increase in value or more depending on your federal and state income tax bracket.

Quality of life perks may be more difficult to place a value on. For example, in addition to saving on commuting expense, telecommuting has the benefit of not having to get up early to get ready for work, spend time commuting, endure the stress of traffic or crowded public transportation, and having the comforts and conveniences of your home available to you. The value of these benefits will depend on your personal perception. For example, some people get up at the same time whether they have to go into the office or not. So the extra time spent getting ready for work and commuting does not have the same value, as a person who likes to sleep in. There is still a value, but the perception of the value varies. Even if you cannot calculate a monetary value, there is a benefit to your general well being.

Prestigious perks such as paid memberships in private clubs or access to restricted company facilities have several benefits. These perks show your higher rank in the company, and provide valuable contacts to further your career. Do not underestimate the value of prestigious perks. Many employees who do not have these perks often act as if they would turn them down if they were offered. Don’t be persuaded, if you are offered a prestigious perk take it. Most often it is an invitation into the upper ranks of the company. The same is true of invitations to play on sports teams, or other outside social events attended by upper management. An important concept to keep in mind is that most promotions come from the efforts of those who take an interest in you. The more positive exposure you get to upper management, the greater your chances of promotion. Prestigious perks are important stepping-stones along a career path. Like stepping stones if you don’t take advantage of it you may face a much larger challenge to move forward, or worst yet you may be stuck unable to advance.

There is a lot of difference of opinion about the value of perks, and if employees should bargain for perks instead of salary increases. My opinion is that it is an individual decision. The point of this article is to point out the importance of having an idea of which perks are of value to you, and an estimation of that value. The ability to choose perks wisely and on short notice is important to maximizing both the monetary , quality of life, and future rewards of your career.

The PracticaL Mentor.

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