How to Effectively Manage Your Career (page 5)

by Susan Zitron Woods
Zitron Career Services

Found in this article:

Creating A Personal Career Plan (page 1)
Your Internal Motivators (page 2)
Non-Negotiable Career Criteria (pages 3, 4, 5)

9. Compensation and Benefits

It is important to know your total compensation requirements and needs from the beginning of your job search. This knowledge will help focus you on the right position and company. Ultimately it will play a major role in your ability to negotiate a great compensation and benefits package. Always state your total compensation value, which includes your salary, plus bonus, plus commission: My total compensation for 2000 was $67,500, and my total package, including 401K's, stock options and benefits, was $93,000. Take time to learn the value of your benefit plans.

If you are considering taking a dip in pay, be certain to check the current market value for your job. It may have gone up, or, regretfully it may have dropped. Headhunters and placement counselors are knowledgeable about the current values of specific positions within the market. Check with several of them, and be sure to call people you know who are in the field. Read annual salary review surveys online, in magazines or professional association journals. To avoid the pain of underselling yourself or pricing yourself out of a good opportunity, know your current market value.

Example:

Here is the actual breakdown for one senior manager's total package. The 'K' after a number stands for dollars in thousands and the 'M' stands for dollars in millions.

Actual Income Evaluation

Current Earnings: Base salary equals 15% to 39% of total package.		= $75K base + bonus totaling $90-105K for an average income of $100K
Approximate Net Income:		= $50 to $60K
a. Company Vehicle (including gas, insurance and servicing)		= $7K
b. 401K up to 9% of total income allowed and matched dollar for dollar up to 6%		= $6K
c. Expenses other than travel		= $30K reimbursed
d. Travel Expenses		= $36K reimbursed
e. Freedom to Set Up Offices as Needed		Yes
f. Full Medical 100% of all emergency and 80% of all other up to $1000 when it goes to 100%. Maximum out of pocket = $1K /year		Value up to $5K/year
g. Dental 100% preventative and 80% of all major work up to $1500/year		Value of insurance premium, up to $1500 annually
h. Additional Life and Disability Insurance as an officer of the company above normal life insurance equal to $500K during off hours, and $1MM while working		Value insurance premium , up to $1K annually
i. Vacation Days5 weeks off per year		$7.2K
j. Extra days off, as needed		Valued at $2K
Current Total Package value		$190.8K
Desired Total Compensation and Package = $300K plus Minimum acceptable at $200K to include:
+	Base Salary of $125K plus bonus	= $150K to $175K
+	Stock options (if it is a public company or one about to go public) OR a percentage of profits
+	Equal or better company vehicle, expenses and benefits
+	Full medical and dental
+	Retirement package
+	All expenses and travel paid
+	4-5 weeks vacation per year
+	Minimum $500K life insurance
+	Short- and long-term disability

What is your income history for the past three years? What is your income average for this period? Through this exercise you will discover what your minimum compensation requirements must be. However, knowing your minimum income and negotiating a great compensation package are not the same thing. The first is based on your needs, while the latter is based on your current market value along with what the company is willing to pay to bring someone with your experience on board.

Salaries fluctuate depending on the industry, market and geographic location of your company. You may discover that some companies, possibly yours, have been paying below market compensation value. Through research you may actually discover that your job has a higher market value than you have been paid, which will help you to be a good negotiator at offer time. Be smart for yourself and invest the necessary time to find out your current market value and negotiate from that figure and not your previous income.

Another important point is that unless it is the same position in the same market, your future value is relevant only to your ability (or inability) to perform the new job as the new company has assessed it. If they are offering a substantially higher income that what you are accustomed to being paid, then, if you are qualified, you are entitled to the increase. Your previous income has no relevance. You may be qualified for a position based on your previous experience, but if the new position requires a lot of travel or demands more time and effort than before, you must not settle for a compensation package equal to, or slightly better than, your previous job. Don't be fooled. If you are going to have to substantially change your lifestyle to accommodate a new employer, then demand an increase and bone up on your negotiation skills.

Using the chart below, chart your own Compensation and Benefits History. Then determine in the following chart what you must earn at a minimum in order to accept a new position.

	Base	Bonus	Commission	Total
My current base salary
a. 2000 W-2
b. 199__ W-2
c. 199__ W-2
d. Average income for the past three years:
e. Medical insurance:
f. Dental insurance:
g. Life insurance:
h. Stock options:
i. 401K/other retirement savings:
j. Personal days:
k. Travel/other paid expenses:
l. Vacations:
m. Company vehicle or auto expenses:
n. Paid holidays:
o. Other:

Now write out your minimum compensation and benefits requirements, adding in anything else that is important to you.

Base Salary:

+ bonus

+ commission

a. Medical insurance:

b. Dental insurance:

c. Life insurance:

d. Stock options:

e. 401K/other retirement savings:

f. Personal days:

g. Travel/other paid expenses:

h. Vacations:

i. Company vehicle or auto expenses:

j. Paid holidays:

k. Other:

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