career advice

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How do you evaluate benefits as part of the total offer?

In a prior post, I discussed some ways of obtaining information that can help negotiate a job offer. When you receive a job offer, it’s easy to only focus on the hard numbers:

  • Base salary
  • Bonus (if available)
  • Sign-on bonus (if included)
  • Stock/Stock options (if included)

These are the data points most easily benchmarked against your current position (or against the market). But if you focus only on those numbers, you are not evaluating the entire offer effectively.

Benefits are extremely important to you (and, potentially, your family). They are also a significant part of your compensation.


A great benefit package:

  • Ensures you can stay well–and provides great care in the event of a serious accident/illness–without bankrupting you (I mean this quite seriously)
  • Provides enough paid time away for work that you can have a great work/life balance while not worrying about lost income
  • Invests in your future by providing things like employer matching funds in a 401(k) or offering discounted employee stock purchase plans
  • Ensures you have insurance coverage for unforeseen events (short- and long-term disability; life insurance)
  • Offers other things that make your life easier and heathier, such as a transit pass; onsite bike lockers/shower room/gym (or discount to a local gym); discounts on food; etc.

But how much do these cost–and how to weigh them as part of your offer? The Bureau of Labor Statistics calculated that, on average, benefits cost an employer 30.9% of the overall cost of employment. A 2011 SHRM report states that, on average, employers spent 19% on mandatory benefits (such as unemployment compensation, workers compensation, and Social Security); 19% on voluntary benefits (such as health insurance, flexible spending accounts, vision plans, insurance); and 11% on time not worked benefits (paid holidays, sick leave, vacation, personal/bereavement leave).That’s 49% of the total $ spent on employing you.

Now you have a sense of how much you should value that benefits package as part of your offer. What should you be looking at specifically?

  • What does the health plan cost you per month compared to your current plan? What are the annual coverage maximums and co-pays? Can you keep your current providers under the new plan? It’s important to understand these differences as they can add up to real money out of pocket.
  • Does the new company offer a flexible spending account or health savings account for medical expenses? That can save you $ in paying for these costs pre- versus post-tax. If you have–and use–an FSA with your current employer, and the new employer doesn’t offer an FSA, that can impact you financially.
  • How much does the new employer contribute to retirement (401k, 403b, etc)? This is $ to you, so it’s important to know what the delta is (if any) between your current employer and the new one.
  • How much paid time off will you receive? Does it increase over time with certain anniversary dates? Is it paid out when you leave? Companies with PTO plans do not usually let you ‘bank’ time & roll it over into the next year. It is also not often considered compensable time. If your current employer has a vacation plan that lets you bank time–and cash it out if you leave the company–and the new one does not, that’s something to consider. Also look at how many paid holidays you will receive, how much sick time, etc.
  • What are the other perks/benefits of working for the new employer? Do they offer a parking subsidy or transit pass? What about an onsite gym? Do you receive free/discounted food or drink? Can you purchase company products at a discount? (Microsoft Employee Store, I’m looking at you…)

Altogether, the differences between benefits packages can mean large overall differences in your compensation–or how much $ will be coming out of your paycheck (or pocket) that isn’t with your current plan today–with a new employer vs. current. It’s well worth taking the time to crunch the numbers and discuss the differences you find with the recruiter. It’s worth noting that most recruiters will not be able to make changes to benefits–with very few exceptions (seniority-based vacation accrual for one) they are usually the same for all employees. But they may be able to make a case for increasing your base compensation a bit if your out of pocket expenses will increase under the new plan.


Unpaid internships: Why they aren’t a good idea for most companies–or you (in most cases)

In the past week, there has been a lot of press around the editor-at-large for Sheryl Sandberg’s non-profit organization, Lean In, posting an opening for an unpaid internship on Facebook. Controversy erupted around why an organization spearheaded by Sandberg, who made $91 Million from Facebook stock sales last week, would be offering an unpaid internship. Isn’t that counter to the organizations purpose, many asked?

For Lean-In, a registered non-profit, this might have been legal. In the for-profit world, however, unpaid internships are most often illegal. And this is why the story is important to you, dear readers.

If you’re a recruiter who has a client that wants to post an unpaid internship at your for-profit company, or if you are offered an unpaid internship, scrutinize the request or opportunity very carefully.


The US Department of Labor established new guidelines for Internship Programs under the Fair Labor Standards Act in 2010. In this document, they established a test for whether an internship should be paid or unpaid. They are:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  1. The internship experience is for the benefit of the intern;
  2. The intern does not displace regular employees, but works under close supervision of existing staff;
  3. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  4. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  5. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

I’ve bolded a couple of points that I consider most salient. In essence, an unpaid intern is on premises effectively for co-op educational experience. They may not produce any work that could benefit the employer–which is to say, most anything. And in some cases, normal business operations may actually be impeded through having the unpaid intern on premise.

Seems pretty clear, right? Unfortunately it doesn’t seem to be for a lot of employers. Fox Searchlight was sued–and had judgement awarded against them–by unpaid interns that had worked on “Black Swan“. And this is simply the highest profile case of many where former unpaid interns have been awarded back wages. Warner Brothers/Atlantic Records was sued by a former unpaid intern in June.  The Charlie Rose show was ordered to pay back wages to unpaid interns in a court judgement to approximately 190 former interns earlier this year.

But what about if you’re receiving academic credit? Doesn’t that give the employer a free pass? Not according to judicial precedent. The “Black Swan” ruling stated that receiving academic credit was of little importance in determining whether the interns should have been paid.

In essence: Internships in for-profit businesses should be paid. It needs to follow the concept of consideration. If an intern produces work of any value to the organization, they need to be paid a satisficing amount in consideration of that work.

I’ve been approached by hiring managers who know of a smart college student who is hungry for experience who would like to hire them as an unpaid intern. I get it: they see an opportunity for a cheap (read: free) resource to get some basic work done that they’d otherwise have to hire a temp to complete. I’ve had many educational conversations as to why doing this would place the organization at legal risk.

Recruiters: Have you run into this with hiring managers? How did you handle it?

Job seekers/students: Have you considered an unpaid internship? Did you end up doing it?

End note to the Lean In story: It was announced at the end of last week that Lean In will be doing a paid internship program. Amazing what a little press coverage can do.

February 2019
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