For many recent graduates and young professionals, salary is a key component of the job search. However, in their focus on a starting wage, Millennials often overlook the additional perks and benefits that make up a complete compensation package. While salary is, of course, an important factor when considering a job offer, take-home pay is only a fraction of what today’s emerging workers should consider in making a career decision.
In an economic climate where Millennials find themselves earning far less than their predecessors, negotiating beyond base salary is key to unlocking the “hidden paycheck” and achieving one’s full earning potential. How does the state of compensation for young professionals and recent graduates stack up against past generations? What should these individuals negotiate for beyond salary?
The Growing Compensation Gap
The recent recession has played a significant role in deteriorating starting salaries for entry-level professionals. According to the National Association of Colleges and Employers, the average starting salary for college graduates increased by a mere 2.4 percent in 2015 compared to 2014. Currently, the median salary for graduates in 2015 is nearly 24 percent lower than the average starting salary in 2009, at the beginning of the downtown.
This disparity is likely to continue throughout the careers of today’s emerging professionals as studies point to an earning potential 2.5 percent to 9 percent less than previous generations. With Millennials predicted to fall short of the earning levels achieved by their senior counterparts, negotiating a favorable compensation package is an important factor in starting one’s career off on the right foot. Negotiation has become a pivotal piece in combatting the wage disparity between current professionals and the median starting salaries of their pre-recession counterparts. However, not all organizations have flexibility in regards to starting salary. In these cases, what can today’s professionals do in order to bridge the gap?
Unlocking the Hidden Paycheck
When it comes to negotiating compensation, many professionals mistakenly view the process as simply tossing salary figures back and forth. As a result, they often fail to consider the value of the full compensation and benefits package they are being offered. Benefits can comprise up to 30 percent of one’s total salary — no small sum. In fact, total compensation within the insurance industry has experienced substantial recent growth thanks to better corporate performance and profitability.
The key is understanding the full benefits of the total compensation package. Total compensation should cover all needs, not just the monetary ones. What else is being offered along with the base salary? What are the health insurance benefits? Is flexible work an option? Do they offer 401(k) and does the company match contributions? How does the PTO policy compare to the industry standard? Considering hiring bonuses, vacation time, retirement plans and other company benefits part of the total compensation package and open for negotiation is a great way to supplement a lower starting salary.
Many young professionals may be surprised to find that insurers are even beefing up their compensation packages in order to compete with other industries that are able to provide larger base salaries. With starting salaries remaining relatively flat, insurers are crafting enticing bonus plans and benefit offerings that appeal to Millennial preferences. This includes flexibility in scheduling, work-from-home and other telecommuting options, as well as tuition reimbursement and commuting assistance. No longer is salary the sole consideration. Today’s professionals must take a look at the entire compensation package lest they pass up an opportunity to unlock the “hidden paycheck.”
More and more, companies are asking their employees to make a move. As the “war for talent” wages, job relocation is becoming a benefit area applicable to more and more young professionals. Recognizing the need to find and attract recent graduates and emerging talent, organizations are expanding their search areas, taking advantage of Millennial’s desires to travel and offering potential hires competitive relocation benefits. In fact, 29 percent of organizations are currently providing employees with a lump sum for relocation, while 19 percent reimburse all shipping fees associated with a move.
For professionals willing and able to relocate for an entry-level position, negotiating a competitive relocation package is an important, and often overlooked, part of the job search process. Young professionals should look into negotiating for relocation assistance that helps to cover the actual costs associated with the move. This can include temporary housing, realtor assistance and company-provided house hunting trips. Moving costs and pre-move visits are also being included. Millennials should approach these negotiations with an “it-never-hurts-to-ask” mentality while being reasonable.
Competitive compensation remains a key selling point for today’s job candidates. As insurers recognize the value of a well-rounded comp package, great non-salary incentives are being incorporated. For young professionals and recent grads, negotiating for these benefits are key to bridging the entry-level salary gap and starting their careers off on the right path.
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