Weigh benefits carefully in today's job market

Many American workers are understandably anxious about job security and compensation. Unemployment hit 5.7 percent in July, the highest level in four years; state and local governments are reducing workforces across the country; and real income has fallen 1.1 percent between 2000 and 2008, despite an 18 percent expansion of the economy.

This Labor Day, the United States will recognize the efforts of its 155 million employed people. Those Americans are well advised to become educated on the value of job benefits, both monetary and nonmonetary.

Benefits represent 30 percent of total compensation. They often include the traditional: retirement plans, vacation and sick leave, health insurance, as well as maternity and family leave.

As part of a cafeteria-style benefit program approach, some employers offer more tailored options, such as tuition reimbursement, parking and employee discounts, flextime, and telecommuting.

Benefits vary tremendously by industry, size of organization, and by sector – government, private, and nonprofit. A March Bureau of Labor Statistics survey documents significant differences in benefits among those sectors. Retirement and medical benefits are available to nearly all full-time state and local government employees, 99 percent and 98 percent respectively. Only 71 percent of private-sector employees received retirement benefits, with a larger 85 percent receiving medical benefits, the BLS reports.

Those private-industry figures conceal significant differences in benefits depending upon the size of the organization. Large organizations are more likely to supply a greater variety of benefits. The two most critical packages, retirement and healthcare, are less prevalent in organizations of less than 100 workers.

Nonprofits, surprisingly, offer a more generous benefit packages than many private sector employers in caregiving leaves, flexible work arrangements, child and eldercare assistance, and healthcare, according to a recent study by the Family and Work Institute. Industry variations also are significant. Employers in finance, insurance, and real estate promote a higher level of job flexibility and child- and eldercare assistance than other industries. Racially diverse organizations are more likely to offer generous caregiving leaves than less diverse employers. And unionized organizations are more likely to offer healthcare and economic security benefits that nonunion shops.

Employees should look beyond salary figures and decide which employer benefits are most valuable to them. For those with busy families, a job at a nonprofit organization that offers flextime and caregiving leave to support an ill family member or permits at-home time with a challenged teenager can be far more valuable than earning an additional $40,000 in a private sector position.

To attract and retain quality workers, large companies increasingly offer part-time jobs with benefits. Employees must work a minimum number of hours per week to qualify for benefits. Starbucks, Barnes & Noble, and Nordstrom are among the nationwide retailers offering part-time employees benefit options.

In evaluating the trade-offs between income and job benefits, recognize that future Social Security retirement payments are capped at an income level of $102,000 in 2008. Any income greater than $102,000 does not result in higher Social Security benefits. In such cases, job benefits, both monetary and nonmonetary, would be of greater short-term and long-term value.

To secure the most favorable benefit package, consider the following.

•Know your generational needs. The Sandwich Generation – those caring for their children as well as their own aging parents – will value benefits geared toward caregiving leave and economic security (retirement and healthcare); Generation X and Y will value flextime, job skills training, and tuition reimbursement. To learn more about workplace flexibility visit familiesandwork.org.

•Change industries or employer structure to achieve desired job benefits. Check out vault.com for employer comparisons.

•Working married couples should coordinate benefit packages to maximize coverage and avoid duplication.

•Recognize that most tax-free benefits may well offset the value of income. Free childcare and flextime may be more valuable than a $40,000 (taxable) income bonus.

•Compare your salary and benefit package with others in your industry at payscale.com.

• Dr. Kathleen Connell is a professor at Haas Graduate Business School, University of California, Berkeley.