Go holistic in your pay package
Lim Siew May 
If you have multiple job offers, you may have come across this dilemma: How much weight should I give to my salary, versus other benefits? – 123RF

WITH the increasingly high cost of living, salary is no doubt at the top of the mind of most wage earners.

If you have multiple job offers, you may have come across this dilemma: How much weight should I give to my salary, and how much importance should I assign to my benefits when assessing the attractiveness of my compensation package?

Hays Malaysia regional director Tom Osborne acknowledges that salary has long been regarded as the primary motivator when a candidate considers a job offer. Interestingly though, he notices that expectations are changing, and jobseekers are increasingly paying more attention to the overall package that the company has to offer.

The key conclusion is this - there is no one-size-fits-all package. Depending on where you stand at the moment, a benefit can be perceived to hold more value for one candidate than another, say industry players interviewed by FocusM.

“Depending on one’s stage in life, it is essential to carefully review the job offer holistically to ensure the prospective employer can fulfil what you and your family need,” says Osborne. “Employee benefits - including health insurance, retirement plans, vacation and sick leave, and life and disability insurance - can represent up to a third of one’s compensation package, and depending on what your present and future needs are, the weight of these benefits will vary,” he adds.

Rosalind Yu, Willis Towers Watson Malaysia director of health and benefits, couldn’t agree more. When it comes to benefits, they are divided into non-cash and cash benefits, she explains.

Non-cash benefits are based on reimbursement basis, such as group insurance, optical, dental and maternity care. Meanwhile, cash benefits can be made up of actual salary, short-term incentives like bonus and sales incentive, as well as long-term incentives such as the issuance of company stocks after certain years of service.

Based on Yu’s observation, a higher income earner tends to opt for non-cash benefit due to a more favourable tax structure.

On another note, she observes that talent in their early to late 20s tend to be not very concerned about the salary, presumably because they have parental support and not living from hand to mouth.

Meanwhile, those who are in their 30s are more concerned about the weightage of salary, as they don’t have other means of financial support. “[The] majority of them may want to buy a car, so salary is more important to them. In contrast, dental care, optical care and maternity care may be not-so-urgent and important benefits to them,” she notes.

She agrees that there is no right or wrong way of determining the best compensation package for oneself. The importance would depend on an individual’s needs at the point of time, which may be influenced by one’s financial standing and life stage, Yu adds. “You need to look at all the benefits given. Whatever you can quantify, quantify, then make the comparison accordingly,” she says.

One example of a quantifiable benefit is life insurance. “Say the company’s group insurance coverage is too little, and you would need to cover yourself with a medical plan. You can compare life insurance plans in the market, and find out what the premium is,” she says.


Total compensation package

Assess how practical those benefits are to you. “It costs companies money to give you those benefits, but as an employee, they are of zero value if you don’t use them. Ninety percent of the employees don’t go to the dentist and make use of dental care. Also, if you have no eyesight problem, you wouldn’t be getting glasses and contact lenses. In this case, you will quantify the optical care benefit as zero,” she says.

Next, estimate to what extent cash benefit like bonus impacts your total compensation package. “If you are in sales, for example, most companies would award you bonus if you meet your target. Some may give performing sales executives one month or four months’ bonus on average. From there, you can deduce which company is a lot more generous in bonus [than basic salary],” Yu explains.

Haggag agrees that compensation should be viewed in a holistic manner

Manpower Group country manager for Malaysia and Indonesia, Sam Haggag, too, concurs that compensation should be viewed in a holistic manner. “Basic, variables, outcome-based, and benefits - all should be viewed in totality rather than basic salary alone. For example, transportation allowance is not part of the basic salary, yet it helps to offset the cost of travel. Candidates should look at the whole compensation, and what the benefits would provide as an offset to their daily costs,” he says.


Negotiating your package

In doing so, Haggag believes that candidates should ask themselves: “What would happen if they did not have a particular benefit? How much would it cost them if it was not provided by the employer?”

Here’s a thought - would it be possible for a prospective job seeker to negotiate for customised benefits from the beginning?

Yu believes that prospective applicants should feel comfortable negotiating for what they want, then take on a job with the full knowledge of what they can and can’t have, she says. Personally, Yu will not hold it against a job applicant who isn’t afraid to communicate his desires and needs. This allows both the employee and employer to know if they are a good match.

That said, there are some caveats. To begin with, ask at the right time. Also, only discuss your compensation package if the prospective employer initiates the conversation about what your expectations are, Yu advises.

“There will be different stages of interview. If it’s the first interview, where you’re just exploring whether you’re a good fit for the job, you shouldn’t be asking about your benefits,” she says.

“If I were to be interviewing a job candidate, before I show an interest in hiring, he is asking me everything about benefits and salary, it would leave a very bad impression. It is too presumptuous to think that the interviewer will hire you at this stage,” Yu points out.

Yu also advocates being mindful about how you frame your requests. “You don’t want to appear to be petty, calculative and demanding,” she cautions. “For instance, you may say: ‘I am interested to know whether the company offers this particular benefit. Do you think I can have this?’ Ask it in a question form, and in a way that anybody should be able to accept, not in a demanding ‘I want this and that’,” she advises.

In her experience, customised perks, such as requesting for a company driver, are usually reserved only for high-level positions. It is not usual to find a company that will bend backwards to cater to a middle manager’s needs, Yu observes.

It also depends on the company’s culture, and whether they are more progressive or traditional. “For instance, say you want a flexi-work arrangement. However, if employees who have been working at the company for 10 years don’t get this benefit, giving this benefit to a new employee is not fair. Maybe the company can consider adjusting the salary if you’re working less hours. Other than that, it may be a bit more difficult to get what you want,” she say.


Fair benefits

Meanwhile, Hays Malaysia’s Tom Osborne believes that firstly, a candidate needs to find out if the benefits offered are fair according to industry and national standards. According to him, the 2017 Hays Asia Salary Guide unveiled that 85% of employers across Asia offer benefits in addition to salary and bonus. Out of which, 79% gave health/medical benefits, he observes.

While salary has long been regarded as the primary motivator, jobseekers are increasingly paying more attention to the overall package that the company has to offer, Osborne observes

“If the range of benefits are similar to what is offered by another company of similar nature, then it will be difficult to negotiate for a customised package. However, if the package falls short, it may be worthwhile to raise this to your prospective employer to ensure you are fairly rewarded,” he points out.

On another hand, Haggag of Manpower Group believes that candidates should be open and tell their prospective employer what is important to them. “They’ve got to be clear and specific. If they don’t ask, they may never get a chance to get what they are looking for,” he says.

Suffice to say, whether such an arrangement is viable or not is a two-way street. Employers, on the other hand, should also evaluate the internal equity in terms of the value of the individual, says Haggag. “Within that structure, there is a range of flexibility where employers can adjust benefits to individual needs,” he says.

“For example, some employees need childcare services at home while the parents are working in an office. In this situation, flexibility of work arrangements, such as the work-from-home model can be very important and valuable for the employee,” he says.

“Such arrangement will save a lot of cost for them. We have found, for instance, that globally, 38% of candidates consider work flexibility as one of the top three motivators for making career decisions,” he explains.

Quantifying the intangible

LOOKING at your compensation package in totality isn’t always a straightforward task. Understandably, some benefits are more intangible. Perks such as the culture, opportunity for career advancement, professional and personal development, as well as a supervisor who may serve as a good mentor may not be communicated clearly as your compensation package, but are undoubtedly crucial to your overall job satisfaction and career success.

Hays Malaysia regional director Tom Osborne reinforces his view that there is no hard and fast rule in assigning weights to different factors. “One’s stage in life, career aspirations and personality would determine what matter most. It would be helpful to envision where you want to be in three or five years’ time, and measure it against what the prospective employer can offer,” he explains.

Let’s assume that you have just started out in your career. In this case, a clear career progression and a supportive mentor may be highly important at this point of your life, Osborne explains. “In contrast, for someone who has a family with young children, finding a workplace that supports work-life balance and flexible working would matter more.”

Yu says studies have shown that 80% of the people who leave their jobs leave because of their immediate superiors

Rosalind Yu, Willis Towers Watson ‘s Malaysia director of health and benefits, echoes Osborne’s view. If you are looking for a nine to five, run-of-the-mill kind of job, intangible perks like career prospects, personal development and opportunity to learn may not resonate strongly with you. Otherwise, these are crucial considerations for those who want more out of their career, she opines.

“In this case, a good question to ask is what kind of training the company is providing the staff, and what my career path would be like in five years’ time if I do well,” she advises.

Out of all the intangible perks, who your immediate superior is plays a particularly important role. “Studies have shown that 80% of the people who leave their jobs leave because of their immediate superiors,” she points out.

Throughout her career, Yu has conducted countless interviews with candidates who are considering to leave their current jobs. “Of course, many would give me a generic response, like there is a new job opportunity elsewhere. But if I drill down, it all boils down to two reasons – they are not happy with their immediate supervisors, and they feel that they are stagnant in their jobs – They are looking for opportunities to grow and learn, but their jobs don’t provide that,” she reveals.

Putting aside salary and perks, a candidate who is contemplating job offers with different compensation packages needs to envision how happy he will be at his job without mentorship, career development and personal growth. “How happy are you going to be at your job if your employer breathes down your neck and makes life difficult for you?” she questions.

Chances are, most people are not going to stay long at such an environment. “[Based on my experience,] after a while, they will say: ‘No matter how much you pay me, I am not staying on.’ Remarks like that tell you that a lack of guidance and opportunity for growth wouldn’t make up for the size of the paycheque,” she says.

Meanwhile, Manpower Group’s country manager for Malaysia and Indonesia, Sam Haggag points out that situations as such require hard, cold logic, and that one should avoid emotional decisions. He suggests candidates making a list of priorities, and giving a mark to each factor, such as the following table below.

This article first appeared in Focus Malaysia Issue 262.