FREE NEWSLETTER
Young adults entering the job market often focus on the salary or hourly wage first, and that makes sense. Pay matters. But the benefits package can be just as important, and sometimes a slightly lower-paying job with stronger benefits is actually the better deal.
Health insurance, deductibles, retirement matching, vesting rules, paid leave, sick time, disability coverage, tuition assistance, promotion potential, and work-life balance all have real value. A 401(k) match, for example, is part of your pay. Ignoring it is leaving money on the table.
I’d also tell young adults to look beyond the hiring brochure. Can employees actually use their leave? Are schedules predictable? Does the company promote from within? Do managers support people when life happens?
What benefits do you think young adults should pay the most attention to when choosing a job? Looking back, is there one benefit you ignored early in life that you now realize mattered more than you thought?
What benefits do you think young adults should pay the most attention to when choosing a job? Looking back, is there one benefit you ignored early in life that you now realize mattered more than you thought?
I’m so old that my young adult years preceded 401k plans, Health Savings Accounts, PPO’s, HMO’s, Flexible Spending Accounts, Lifestyle Accounts, EAP’s, concierge services, etc. However, I had the privilege, over the past 46 years, to manage the benefit plans for my various employers.
Unfortunately for them, my two now-adult Millenial children suffered through those efforts.
One “benefit” they received from my work experience was free, expert benefits counseling when they transitioned from school to wage earners.
The outcome:
As far as I know, neither has made any benefit decision mistakes where they missed out on something valuable to them.
For me? Back in 1992 (yes, 1992), I had conjured up a scheme to create a variant of what we know today as a Health Savings Account. It was unique enough such that I wouldn’t proceed without asking the IRS for approval using what’s called the private letter ruling process.
I had investigated early Medical Savings Account concepts developed by the Golden Rule Insurance Company. My variant was closer to the predecessor of the Health FSA, what we called a ZEBRA, a zero based reimbursement account. It also had features that at times resembles today’s Health Reimbursement Accounts. Today’s HSA, once opened, also has some of those ZEBRA features.
Unfortunately, my employer did not get out on the limb with me as I sawed furiously and refused to pursue that unique, innovative, “bleeding edge” design. One senior VP who rejected the proposal shared his thoughts widely with many other executives asserting my design was: “antithetical to small group health reform”.
Today, as nearly one in three workers with employer-sponsored health coverage are enrolled in HSA-capable coverage (29%) and as 43% of Americans with coverage in the public exchanges are in HSA-capable coverage, my 34 year old proposal remains in my missed opportunity personal file. That’s a regret. I should have paid the fee out of my own pocket, run it through a law firm, and submitted it anyway – even though chances of IRS approval would likely have been less than 1 in 5.
This benefit is a sleeper, but important. A young adult’s greatest attribute is their human capital – which they can put to good use for decades.
Therefore, its critical to protect that human capital. And the best way to do that is with long term disability coverage. So young adults need to make sure they have that coverage. Because if they get injured and can’t work, that may be the end of their human capital – and the beginning of a very tough life.
Where I worked, if we wanted to create a new position, we had to budget the salary of the person, of course, and also had to add 35% of the position’s salary for benefits. Very, very few people who got hired, I imagine, had any idea of the value/cost the organization placed on those benefits.
It took a while for me, at least, to fully understand how valuable they were.
Those of us without all these great benefits just have to roll our own using the extra salary invested over a career.