Many Americans who leave their jobs to improve their financial situation fail to consider their total compensation package when making the decision, according to a consumer survey.
The survey by the National Association of Insurance Commissioners (NAIC) found that many job-hunters consider only salary and end up in worse shape after taking a new job because they overlooked the value of total compensation including benefits.
According to the NAIC survey, 40 percent of voluntary job switchers cited “improve my financial situation” as a key influence on their decision to quit. However they encountered problems when they took a narrow view of what affects their financial conditions.
While 73 percent of job switchers spent some or significant time thinking about salary, only 41 percent spent as much time considering insurance benefits, and less than 30 percent thought as much about out-of-pocket costs or insurance coverage effective dates before making the switch.
According to the Bureau of Labor Statistics, insurance benefits can average nearly 10 percent of total compensation.
The NAIC survey found that ignoring the benefits component can be costly. Nearly 25 percent of job switchers surveyed said after accepting a new job, insurance-related changes either “slightly or greatly worsened” their overall financial situation.
The NAIC is urging employees to consider total compensation, including insurance benefits, before accepting what could turn out to be a not-so-lucrative job offer.
“We urge consumers to consider all the financial implications of a job change, including insurance. Total compensation is more complex than salary alone,” said Adam Hamm, NAIC president and North Dakota insurance commissioner.