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Packaging Horizons
Perks & Paychecks
Do You Know What You’re Getting In That Benefits Package? The differences can be hard to detect.
It’s akin to trying to choose between the banana pudding and the chocolate cake in the cafeteria line. You can have either one of them. You know they both will be good. Neither has any real redeemable nutritional value. The truth is, upon closer examination the pudding has been there for awhile and the cake has fresh cream on top. Now, the choice is easier. You had to look a little closer and shop a bit to decide, but ultimately, you are much happier with the chocolate cake (especially when you see the look on the faces of the other customers who did not examine the pudding as carefully).
Sound like a stretch? It really isn’t that far off. Today’s job candidates are able to “shop” compensation packages, but the differences can be difficult to assess. The majority of companies continue to offer such standard benefits as major medical, dental, life, disability, and holiday and vacation pay. In fact, 401Ks are becoming more and more the norm. Jeff Vaught, recruiting manager, TAC Automotive Group (as a division of TAC Worldwide Companies), in Bloomfield Hills, Michigan, suggests that what people need to ask (and often fail to) are specific questions regarding these plans. For example, is the medical program a traditional plan, a PPO or HMO? What, if any, co-pays are involved? How long do I need to be employed before benefits become effective? Who is the carrier? Overall, benefit programs are not the same, and Vaught warns that the “devil is in the details.” Too often, people fail to get specific information.
Candidates should shop benefits. Vaught advises that they often fail to do so from the proper perspective. For example, Company A has no co-pays, all benefits are free. Company B, on the other hand, charges a co-pay. Consequently, A is a better plan than B. Again, you have to look at specifics: Is Company A offering a very restricted plan (HMO) through a smaller carrier? Do I need to change doctors? Do I want to? Based on my age, health, etc., what type plan is best for me? All too often shopping boils down to what do you have and what does it cost versus what is really the best program for me.
Anna Pattie, director of human resources, at Rexam Closures in Evansville, Indiana, insists that candidates expect businesses to be competitive — just like they expect to be offered a competitive salary for their skills set. “We look at salary and benefits as a package. The benefits package is very important in terms of attracting talented professionals. If you don’t offer competitive packages, you won’t be able to attract the top talent,” she advises.
For example, Rexam offers an HMO and traditional medical insurance plus vision plan, dental, prescription, etc. For all associates, they also have an on-site wellness program as well as discounts at local fitness centers plus a totally confidential, no-charge, employee assistance program (EAP), in which employees can deal with marital or children, legal, problems. “We have an on-site master’s degree program delivered to associates on a combination of the company’s and the individual’s time. The convenience for our associates is having Ph.D.s come to us rather than students going across town, fighting weather and traffic to get an education,” answers Pattie.
Benefit packages have changed drastically in recent years. Pattie believes they have become more similar because of the competition for qualified and talented individuals. Vaught points out that historically, traditional medical was king. Now we have PPOs and HMOs in the mix. All of these have changed the market.
• Traditional Medical Coverage — covered everything and was accepted everywhere. While that may still be true for that product, there are many other products now being offered beyond traditional plans.
• PPOs — offer some flexibility, but are also somewhat restrictive (especially dependent on the carrier).
• HMOs — are usually the lowest cost but have the greatest number of restrictions.
Most companies have gone to some sort of co-pay for some or all of the benefits, as opposed to picking up the total cost. Pension plans have been replaced by 401Ks and other similar employee-funded options. Coverage for obstetrics and gynecology are obviously going to be more important to women. You should ask if your current caretaker is covered and to what extent? If you join an HMO, can you name your gynecologist as a primary care physician? For routine exams, do you need a referral? Issues such as 125 flexible spending plans for daycare, sick days for children, disability for pregnancy, pay during family leave — all of these are issues typically left to women to deal with on their benefit plans. Benefit packages are important, but again, in many cases companies are selling “the sizzle” versus “the steak.” A company that is willing to thoroughly and openly discuss all aspects of its benefits program, in some cases even prior to committing to an interview, etc., is one that should be viewed as the most attractive. Companies that are reluctant to discuss or don’t realize the importance of these issues are the ones to watch out for. The proliferation of alternative providers and plans, as well as a cafeteria-style approach on the part of many companies, offers room for negotiation.
You can pick and choose which coverage works best for you individually. However, such things are usually relative to the compensation package as a whole. For example, top of the line, no co-pay, no restriction, widely accepted policies may be available and negotiated into a starting package. Beware, this can end up having an impact on salary or some other aspect of the total package.
Vaught cautions that when negotiating the compensation package be aware that specific funds that were available under one company’s 401K may not be under another. This can drastically affect rollovers and continued investments.
Pattie explains that what “sells” a business to a candidate is culture — whether or not the company captures potential candidates’ hearts and spirits, not just their minds and their pocketbooks. For example, Rexam Closures has a culture of innovation and flexibility. It’s a group of winners who thrive on finding better ways of doing things and participate in team decision-making.
As the market tightens and employers work harder to attract talented professionals, job candidates have many options in the compensation packages to look for. You must examine all of them carefully. You don’t want to decide on chocolate cake and end up without fresh cream on top.
Anna Pattie can be reached by e-mail at apattie@rexamclosures.com, phone (818) 868-2225 or web site www.rexam.com.
Jeff Vaught can be reached via e-mail at jvaught@1tac.com, phone (800) 359-2448 or web site www.tacautomotive.com.
As one of the largest suppliers of contract technical workers in the country, TAC Automotive Group has more than 16,000 employees worldwide and some of the largest manufacturer companies (Compaq, Ford Motor Co., WorldCom, General Motors) as clients.
Recently, there have been many changes in the contract industry. For example, the majority of firms now offer complete and competitive benefit packages. Contract positions are no longer simply a payroll relationship. Major medical, dental, life, vision, disability, 401K plans, tuition reimbursement, and paid holidays and vacations are much more the norm than the exception. The same is true of length and nature of assignment. The majority of our clients have made contract employees a “permanent” portion of their work force. An average position, as an example, lasts for over two years and the biggest source of our turnover is direct hire by the client company (70 percent).—Jeff Vaught, Recruiting Manager, TAC Automotive
Human resource specialists rate the importance (1-high, 10-low) of the items offered in a standard compensation package.
Sign On Bonus -2
Salary -1
Vacation -1
401K -4
Stock Options -3
Bonus -5
Relocation expenses -4
Car expense -9
Health insurance -1
Education reimbursement -4
Flextime -8
Telecommuting -9
Childcare programs -7
Elderly parent care -10
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