How Much Do You Cost Your Employer?

moneyRachel Farrell, Special to CareerBuilder

When we interview for a new position, we're looking for a nice work environment, good people, interesting job duties and, of course, money.

We try to negotiate a salary that we think we deserve and can't understand when we get turned down. But did you ever stop to think that the reason your potential employer can't pay you a higher salary is because of the money you're costing them in other areas?

As employees, we don't often think about all the things employers have to pay for to keep a happy office. Typically, we notice our paycheck, benefits and vacation days. We don't think about the taxes, the retirement contributions, the office space, the training or the fancy coffee machines.

"Employees tend to know what they want and don't want from a prospective or current employer, but some never consider the size of the investment a current or prospective employer has or will make on their behalf," says Bill Kahnweiler, an associate professor at the Andrew Young School of Policy Studies at Georgia State University. "This investment costs an organization far more than base pay and other forms of remuneration. All other things being equal, employees who see that it is not all about them are more attractive candidates for jobs and promotions, and are easier (and thus less expensive) to lead and manage."

More than a pay check

It's in every job seeker's and employee's best interest to know how much they cost an employer because it says a lot about the organization they want to or are working for, adds Sirmara Campbell, managing director of human resources and operations with the LaSalle Network, a recruiting firm based in Chicago.

"Paying for more than just salary shows that employers are invested in their employees and care for their well-being. Employers have a stake in their employees," she says. "Benefits, payroll taxes and workers' compensation are all things that employees don't have to deal with or worry about. These act as a security blanket or unseen benefits for the employee."

While the cost of employees varies from company to company, most companies have some standard expenditures, including:

  • Insurance benefits (health, dental, flexible spending accounts, long-term disability, life insurance)
  • Payroll taxes (federal unemployment taxes, state unemployment taxes, FICA)
  • Workers' compensation insurance
  • Bonuses, incentive payouts, sick days, vacations, paid holidays
  • Office rental space (real estate costs and utilities, supplies and equipment)
  • Tuition reimbursement
  • Training

"Companies may offer myriad value-add services or products," says Michelle Moylan, human resources director for CheckPoint HR, which has offices in New York and New Jersey. "If an employee were to compare the costs or loss of money they could incur without taking advantage of these offerings, it would become far more clear as to what their total rewards really looks like."

In addition to the standard offerings that companies pay for, Moylan adds employees shouldn't forget about those benefits that help support the work-life balance that so many employees seek these days.

"Great examples are flextime, which can enable employees to negotiate with their employers a schedule that accommodates the employee's external commitments, or telecommuting, which may enable employers to save on some overhead expense," she says. "Job sharing is another great example, which can benefit both the employer and employee by offering flexibility in scheduling and work coverage."

Wellness programs are more commonly offered these days through employer contribution, she adds. Some of these services can be discounted gym memberships or gym membership reimbursement, smoking cession programs and health screenings for skin cancer or high blood pressure.

The power of knowledge

Once job seekers and employees know all the things that make up a position's total compensation package, they can use this knowledge after a job offer is made, or when they're up for promotion.

"I have always counseled people that everything is negotiable. That doesn't mean you will always get what you want or even get some of what you want. It means that virtually any aspect of the employment relationship can be negotiated," Kahnweiler says. "Of course, before one negotiates anything, it helps to understand the other party's perspective, needs and wants."

If, for example, you want to negotiate for vacation days sooner than you are entitled to use them, estimate the cost to the employer for their doing so, he says. Then offer one or several options for compensating the employer, like working extra days without extra pay, using fewer vacation days in the next cycle, or working in a smaller, less expensive work area before the vacation.

"The job interview is a make-or-break time for a candidate to demonstrate that 'it's about us and not all about me.' Aside from having some knowledge of the hot buttons of the organization, showing you are aware of employee costs beyond base pay can work in your favor," Kahnweiler says. "If you had two candidates who appeared roughly equal in relevant experience, skills and potential for a job, and one demonstrated their awareness that the organization is investing in the candidate in ways that go way beyond what's on the paycheck and the other does not, which one would you hire?"

Rachel Farrell researches and writes about job search strategy, career management, hiring trends and workplace issues for Follow @CBForJobSeekers on Twitter.

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