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Benefits Packages Often Overlooked.

The average value of employee benefits equals nearly one-third of a worker's salary, according to the U.S. Bureau of Labor Statistics. Yet, employees often overlook valuable benefits or focus on only a portion of them when they are seeking a job or leaving an old one, according to members of the Financial Planning Association, Denver, Colo.

For example, when clients are considering changing jobs, one of the first questions Elaine Bedel of Bedel Financial Consulting, Indianapolis, Ind., asks them is: "What are you giving up from your current employer?" The longer you are with an employer, the more you usually are giving up, particularly in retirement benefits, she says.

John Gin of American Express Financial Advisors, Metairie, La., recommends that clients negotiate a benefits package with a prospective employer that makes up what they might be losing from their old employer--and get it in writing. Meanwhile, Stewart Koesten of Executive Agents in Overland Park, Kan., who in negotiating job packages for corporate executives, emphasizes that it is typically the benefits, not the salary, that are most open to negotiation. For example, "I had a client who moved an entire kennel of dogs as part of a relocation deal I negotiated--and I've done the same thing with show horses and old cars."

The one benefit area employees are not overlooking are stock options. These can become extremely valuable--far beyond salary. However, financial planners warn that they can also prove worthless, or worth less, in the long haul, depending on the fortunes of the company, particularly a start-up firm. They emphasize having a plan for exercising them and being careful about leaving too much of one's net worth tied up in company stock. One planner points out that several automotive executives she had been working with didn't want to exercise their options because of taxes, and now the stocks are down one-third in value.

Although stock options are the glamour benefits these days, don't overlook the basics, planners emphasize. These include a good health care plan, flexible spending accounts, disability insurance (often overlooked by younger workers), and long-term-care insurance, an option being offered by more employers these days.

Moreover, don't ignore the other end of benefit packages. Early retirement packages usually have room for negotiation. This is especially important for older workers who may not be able to land the same caliber job they're being forced out of. Gin, for example, persuaded a client's employer to guarantee two years of well-paying consulting work, which allowed the client to make a successful transition into a second career.
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Publication:USA Today (Magazine)
Article Type:Brief Article
Date:Dec 1, 2000
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