Not everyone gets salary increases every year, but that doesn’t mean you can’t increase your total compensation. Most of the focus on compensation is on salary, but your employee benefits can account for as much as 30% of your total compensation.
Remember when you started at your company and in your orientation, you had a meeting with HR to discuss your benefits? They likely gave you a thick folder of information and depending on how long you’ve been with your employer, you may not remember a single thing from that meeting, but that folder is likely buried at the bottom of your desk drawer. You may not realize in the fine print of those handouts are some really important benefits that can either put money back in your pocket or improve your overall financial standing. If you want to increase your compensation without having to talk your boss, it’s time dust off that folder and/or set up a meeting with HR.
We’ve created a detailed FREE guide to maximizing your employee benefits, which explains common employee benefits in plain English, but here are three of the most unused benefits which cost can cost us thousands of dollars each year.
1. 401(k) and Employee Matching
If your employer matches your 401(k) up to a certain percent, you are actually turning down free money if you don’t take full advantage of it. Let’s give an example of how this works:
Example: John Doe makes $50K in salary. His employer matches his 401k at 5%. So if he invest 5% ($50K * 5% = $2,500), his company will match that investment up to $2,500. If he invests less, the company will match less.
So in that example, if John decides not to invest in his company’s 401(k), he just reduced his total compensation by the $2,500 match each year.
We recommend building a base emergency fund prior to long-term investing, but it is important to take advantage of your company match as soon as possible.
2. Wellness Programs
If you have health insurance through your employer individually or your family, your employer likely pays 70-80% of your health insurance premium. The portion that comes out of your paycheck is closer to 20-30% of the total cost. This is important because that means your employer is financially incentivized to have a healthier workforce. Healthier employees equal lower insurance premiums for the company. In order to accomplish this, employers have created incentives to get you healthier and many of these can take the form of financial incentives. Examples include discounts or reimbursements for gym memberships, discounts on home fitness equipment, healthcare reimbursements, cash rewards, weight loss programs, smoking cessation programs. Think about it this way, your employer is willing to pay you more money to be healthy.
3. Corporate Discounts/Partnerships
Most people are familiar with receiving employee discounts if they purchase products or services from their employers. However, employees are less familiar with discounts they may receive from other companies because of their employer. Particularly with larger companies, they often have sizable contracts with different vendors and often as part of that contract, they will offer discounts to their client’s employees as well. So you may able to receive a 20% discount on your monthly cell phone or cable bill because your employer has a contract with Verizon. It’s not solely cell phone or cable bills either, this may include electronics, rental cars or even group insurance policies such as auto, home, and life insurance. Also, employers sometimes have internal online portals where you can purchase products with the discounts built-in instead of purchasing in-store or from the company websites directly.
Saving money on your expenses, particularly fixed monthly bills, is not much different than increasing your salary. Instead of increasing the income bucket, you reduce the expense bucket. The result is the same, more money in your pocket. So whether it’s retirement, wellness programs or corporate discounts, make sure you dust off that HR packet in your desk drawer or give a call to HR to learn more about your benefits and how you can increase your total compensation.
For more detailed information on maximizing employee benefits, check out our FREE 15-page guide including details on Retirement, Health, Life, Disability benefits and more, which we call Give Yourself A Raise!