Bills are piling up, rent is due, prices are rising and you don’t have a job . It’s hard to argue with anyone unemployed taking the first position that comes along.
But that job you get offered may not be the best one, even for young Canadians facing the highest unemployment rate in decades. There’s one major factor to consider when job hunting . Top of mind should be total compensation , not just base pay.
A rising tide of Canadians don’t have benefits . While some aren’t upset about giving them up for a higher salary, job seekers should consider the value of some of the benefits in their calculations.
Statistics Canada has said that about 64 per cent of Canadians aged 12 and older have private supplementary health insurance. In most cases, that coverage is paid for by the employer. Some people do buy their own private coverage, and that should also be in calculations.
Table stakes in benefits have often included dental care, some coverage for services such as braces, some physiotherapy or other health services, basic disability and life insurance, and a big-ticket item such as a pension program. These can add thousands of dollars to your total compensation.
Jennifer Foubert, head of product and growth for group benefits at Manulife Financial Corp., describes it as “benefits literacy,” which is a great way to think about the extras your employer might offer that boost total compensation significantly.
“Overall, a comprehensive benefits package can be worth over several thousand dollars per year in real savings for employees,” said Foubert, adding that an increasing area of coverage has become fertility procedures, which can cost $20,000 per round.
She said tailoring benefits to employees has become more important because not everyone has the same coverage needs. That has meant coverage that might target previously ignored health issues specific to women.
“Benefits have moved from being at the back of the offer to a bit of front page decision factor,” said Foubert, adding that discussions about benefits can take centre stage once an offer is presented. “Some (benefits) can be negotiated,” she said, such as the waiting period for benefits to kick in on hiring.
Karen Klein, the co-founder and chief executive of HealthCasa Ltd., which operates like a mobile health-care clinic, said health-care spending accounts, which give employees flexibility over how they spend their benefit dollars, are becoming more popular.
But her company estimates that employees only use between 30 per cent and 60 per cent of their total HCSA allotments.
“The big ones are obviously the dental care and prescription drugs, but then you have all the other paramedical services like physio, massage and mental health services, and they all add up,” said Klein.
Her group estimates that in 2023, the average amount available for employees to spend on health care was about $1,525 per plan member.
“It can be substantial when you add up what is available to you,” said Klein.
Even before considering pension contributions, high-earning, single professionals could value their benefits at about $5,000 annually, said Casey Cameron, founder of Vancouver-based Camlife Financial. However, this could be a much higher actual value if they have any health issues.
And that is a major consideration. If you work for a large enough company, there is little underwriting or checking of your health status for basic drug coverage. So if you have a drug that costs $10,000 a year, it might make more sense to work for a company with coverage and benefits. That extends to coverage you might need for a spouse or child.
There is some good news if you are shopping for a job in a market where the right candidates have negotiating power, said Cal Jungwirth, director of permanent placement services at talent recruitment company Robert Half Inc.
“Even though the broader numbers in the economy itself might not scream as hot, we are still finding organizations struggling to find the right people, so folks have a little more leverage than they think,” he said. “The phrase I think of is total compensation. Individuals are very fixated on salary. Do a math exercise. Start with salary and then add everything up.”
Some organizations do that job for you and will actually show what the benefits potentially could be on top of salary, but would-be hires can now discuss those extras early in the job process. Some benefits may be company-wide policy and not negotiable, said Jungwirth.
He added a key consideration in making your next decision could be whether your spouse has a great benefits plan, in which case you might be more focused on base salary.
“It’s difficult to negotiate some benefits, but perks like parking, transit or (starting) vacation … can be,” said Jungwirth. “Salary you can negotiate, and sometimes a bonus.”
And when is it too early to discuss total compensation? The job interview is obviously early, but once offers are on the table, there should be no hesitation.
“It’s all about timing,” he said. “In this day and age, individuals are interviewing the organization and (compensation) is part of it.”
Those who are self-employed lose access to that key aspect of compensation and need to purchase their own benefits. Some of the key products Camlife’s Cameron recommends individuals buy on their own are disability insurance and life insurance. “People are up to 20 times more likely to have an injury or illness than actually die,” he said.
What this means in terms of cost is that a software engineer in his 30s would pay $150-$200 per month for a high-quality policy with an $8,000 monthly tax-free benefit. Health and dental benefits are more problematic because if you are on an expensive drug, you probably won’t get coverage, and if you are healthy, you will likely balk at the price, said Cameron.
A health and dental plan could cost $100-$200 per person per month, but the low limits, waiting periods and exclusions often make it hard for people to see value, he said.
For those who plan to incorporate their business, he recommended a health spending account. For the cost of about five per cent to a third-party operator to operate the account, you write off almost everything, paying pre-tax corporate dollars for your medical expenses instead of after-tax personal dollars.
For something like fertility clinic treatments, you could be deducting up to $20,000 each attempt.
Deciding on your next job is an emotional decision. Salary has always been a major part of your decision. Make sure total compensation is too, even in a rough economy.
• Email: gmarr@postmedia.com
