The Most Valuable Employee Benefits

You have probably seen headlines about the great resignation, heard people talk about changing jobs or did so yourself in the past couple of years. The job-changing rate has been at record highs since the pandemic. It’s been cooling off since early 2022, but it’s still at a high level compared to historic numbers.

With job changes comes the fun job offer comparisons. The most obvious things we look at are salary and bonuses. However, don’t ignore other benefits that companies provide.

Some great employee benefits can be exceedingly valuable if utilized correctly. Depending on your needs, these benefits could be worth hundreds of thousands or even more.

Here are some examples of the most valuable employee benefits that I have encountered:

1. Equity Compensation Equity compensation offers employees a form of ownership in the company, typically through stock options (ISO, NSO) or restricted stock units (RSUs). There could be other forms of equity compensation, such as ESPP or phantom stocks as well. The value varies with the company's stock performance and how much equity you’re getting. For startups, the equity might have little initial worth but can become highly valuable if the company thrives. It’s not unusual to see half of the total compensation of some employees coming from equity compensation. While equity compensation could be extremely valuable, there’s not a guaranteed return. It could be even detrimental, say if you have had RSU vested and taxed but have company stock dropping significantly in value, so you end up with less than what you owe in taxes. That’s why once you have a significant portion of your investable assets in your company stock, consider diversifying it out to avoid bearing too much risk in a single stock.
2. Tuition Reimbursement Companies offering tuition reimbursement cover part or all tuition costs for employees pursuing further education. What’s better than professional growth and higher education? FREE professional growth and higher education. Take an MBA degree from a top private business school for example, tuition for these MBA degrees can cost north of $150,000 in total. Not too shabby of a benefit if you ask me! Typically, firms would require you to work at the same company afterward for an extended period of time. If you fail to comply with this requirement, you could be asked to pay back the tuition. So please be mindful before you take up this offer.
3. Family Planning Benefits Family planning is no longer a taboo topic. I’ve been hearing from friends going through the family planning process and openly talking about fertility struggles. Just like money, there’s power in transparency and knowledge sharing in the fertility journey, too. For employees facing challenges in starting or growing a family, family planning benefits can be invaluable. These benefits cover treatments like IVF and egg freezing. According to Forbes, a single IVF treatment cycle can cost between $15,000 and $30,000. The monetary value of this benefit is certainly not to be ignored.
4. 401(k) Matches 401(k) matching is certainly not an obscure benefit. It’s one of the most common employee benefits offered. However, the scale of 401(k) matching can vary greatly among different companies. Companies are typically required to match around 3% of employee’s own contribution; however, quite a few of companies elect to offer a higher matching percentage in order to attract and attain talent. Take Bosch USA as an example, they offer up to 75% partial match capped at 9% of your compensation. ?Say if you make $150,000 a year and contribute 12% of your salary in 401(k), you would receive $13,500 in matches. Meanwhile, if you work at a company that offers a 3% match, you would receive $4,500 in your 401(k), marking a $9,000 difference annually. What’s great about 401(k) matches is that it’s not a one-off benefit like the two benefits above. As long as the policy stays the same, you’ll have the same amount of benefit year over year. Your employment choices could mean up to $90,000 of matching differences in a span of 10 years, according to the previous example.
5. Pension Plans While exceedingly rare, there are still employers that offer pensions. Traditional pension plans promise a specified monthly retirement amount based on an employee's salary history and years of service. An employee with 30 years of service and a final salary of $60,000 might receive an annual pension of $27,000, offering a stable post-retirement income. Imagine a life where you are no longer worries about income for as long as you live. The benefit certainly goes beyond just a number.
6. Public Service Loan Forgiveness (PSLF) Program For employees in the public sector or specific roles serving the public, the PSLF program forgives remaining student loan balances after 120 qualifying payments. This benefit can save tens of thousands of dollars in loan repayments, easing financial burdens considerably.
7. Free Childcare Services Free childcare services, whether on-site or through partnerships, can save working parents significant costs. With average annual daycare expenses ranging from $8,000 to $17,000 per child on average, an employee with two children might save between $16,000 and $34,000 each year. ?Say you’re a typical family with 2 children, for the first 5 years of their lives, the company childcare can save up to 25$17,000 → $170,000! A side note: I still remember my gaping jaw when I first learned about children care costs. I also know this is not an uncommon reaction. Rant on childcare cost aside, you might just save a significant amount of money in childcare and ease your burden of college savings, or even retirement savings if your employer offers this benefit.

It goes without saying that monetary value varies depending on many factors, such as the specific companies, your own needs, etc. Also, when you evaluate an offer, money is an important factor, but it shouldn’t be the only factor considered.

When you evaluate new job offers, or simply just into the Open Enrollment season, take some extra time to carefully comb through the Employee Benefit Handbook or your employee benefit intranet page, you just might be surprised at what you find!