DerrJones Recruiting Solutions

Negotiating Employment Compensation

Deciding whether the employment compensation package you've been offered is competitive requires detailed analysis, not only on your annual cash compensation, but on the benefits package included as well.

If you just compare base salary and bonus opportunity, but fail to consider the benefits portion of the package, you're missing key variables that can add significantly to the overall financial picture.

Let's break down the elements you need to consider:

Base Salary

This one is a bit of a no brainer, but there are a couple of things you should understand. Know where your salary fits, relative to the salary range or guidelines used by the company.

Employment Compensation

If you're hired in at the top of the range, your opportunity for a salary increase going forward might be jeopardized. Likewise, understand whether you're being hired in at a salary that will potentially create some internal equity issues. Internal equity can be a tough battle to fight down the road!

Incentive Compensation or Bonus

Having incentive compensation can be a great motivator. But before you spend that money, make sure that you understand what the bonus is based on, and what the company's track record has been in terms of payout. We've covered this elsewhere, but it's worth repeating. If your target bonus opportunity is 40%, but the company has paid out between 10-12% over the past five years, be realistic. You're probably not going to get 40%! More importantly, find out why the company has missed their targets. Are the targets set out of reach on purpose? Is the market changing? You need additional information in order to evaluate this component of your employment compensation.

Paid Time Off

Is the company using a time off catch all - aggregating vacation, sick and personal days into one block of time? Or are these elements separate? Is time off accrued? If so, at what rate?

Will you be able to use all of your time off? Some companies have a corporate culture that frowns on using 4-5 weeks of time off. Just because you have it, doesn't mean you'll be able to use it. Explore what the norms are for others at your level. This is actually more important the higher up you go in the organization.

Finally, is the there a "use it or lose it" policy in place? If you can carry over time, are there any restrictions?


Compare this comprehensive list of benefits to what's included in your employment compensation package. Things to watch out for are noted. For all of these, find out who pays!

  • Medical Benefits: Understand the plans available, coverages included, and who pays for this benefit. Most plans today are contributory. Find out what will be deducted from your paycheck to provide this coverage for you and your dependents.
  • Dental
  • Vision
  • Life Insurance - what are the maximum coverage limits?
  • AD & D
  • Supplemental Life - can you buy more than the company's plan provides?
  • Supplemental AD & D - same question
  • Dependent Insurance Options - are the life and AD & D benefits available to your family?
  • Short Term Disability - note percentage of salary paid, and whether this benefit is self insured
  • Long Term Disability - note percentage of salary paid; is there a maximum benefit?
  • Holidays
  • Tuition Assistance - note pay back terms should you leave the organization
  • Retirement Benefits - pension and/or 401K plan. Note contribution rates, match, and vesting schedule.
  • Any additional benefits - commuter or parking subsidy, childcare facilities, EAP programs, etc.

The bottom line when evaluating employment compensation packages? Make sure you do an apples to apples comparison to make the best decision.

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