Violet was in a pinch. Her company wanted to hire, and the candidate
wanted to accept. But there was a problem: the new job paid less than
the candidate was already earning. And neither party was willing to
Fortunately, Violet had a creative instinct. So she called the employer.
Mr. Employer, she said, I know youve made your best and final offer. But
is there anything besides straight salary we could bring to light in
order to get the candidate on board?
What do you mean? asked the employer.
How about your companys benefits? Could they have a cash value that
might put money in the candidates pocket?
Well, our benefit package is pretty rich, said the employer. Not only do
we pay all our employees health insurance premiums, we match their
retirement contributions dollar-for-dollar.
Sure, said the employer. We also pay a year-end bonus: Last year, it
came to five percent of each employees salary.
Thanks, Mr. Employer, said Violet. I think I have some good information
I can use to put this deal together.
So Violet got work. Using a spreadsheet to calculate the value of each
of the company's benefits, she found that the candidate would
actually get a raise by accepting the offer. But how could she
sell it the candidate?
Suddenly, she realized the answer was staring her in the face. So she
called the candidate. Using her spreadsheet, Violet explained the
various offsets, and how they put money in the candidates pocket every
paycheck. And before she knew it, the candidate accepted the job.
Apples, Oranges and Bananas
Of course, it took more than just imagination for Violet to make her
placement; it took some serious number-crunching to find the offsets.
But from that point on, Violet never looked at a compensation packageor
an offerin quite the same way.
She found that lurking beneath the surface are hidden dollars
that can make the difference between acceptance and rejection.
And she also found that if the recruiter doesnt step up and square the
circle, it's a good bet no one else will.
Violet discovered that there are three components in every compensation
package, some of which are hidden:
1.Surface cash. This includes salary, commissions and
bonuses (year-end and sign-on) that can be measured apples-to-apples
against any other package. But theres more: Surface cash can also
include offsets from many different types of benefits and perks.
For example, a company car may be worth $500 or even $1,000 a month that
the candidate wont have to spend on gas, maintenance and insurance. Or,
a company-supplied laptop or cell phone (for business use, of course)
may save an employee a bundle of money, not only in the purchase price,
but also for the upgrades. Other offsets might include free parking,
tuition for higher education or professional development, or even the
cost of a health club membership, if the company has a workout facility.
2.Deferred cash. This includes company stock, retirement
contributions, profit sharing or performance reviews.
3.Phantom cash. Where a person lives, works or travels
all factor into the balance sheet. Sure, its a given that its cheaper to
live in Sandusky than it is to live in Seattle. But what about property
taxes? Or income taxes? Or the cost of private schools, if the public
school system wont meet the familys needs?
A candidate doesnt have to relocate to benefit from phantom cash. A
ten-minute commute (or a telecommuting position) not only costs less in
gas and Starbucks than a two-hour round trip to work; theres a time cost
as well. So a shorter commuteor no commutemight reduce the expenses
related to child care, pet sitting, or meals and entertainment. Even
something as seemingly insignificant as a companys dress code can figure
into the cash equation. New clothes and dry cleaning cost money. Going
casuals not only more comfortable, its more economical as well.
Sure, there are times when you just cant reconcile an offer thats low.
But when you can put asymmetrical components on the tablethe apples,
oranges and bananasand calculate their cash valueyoure more likely to
receive the full fruits of your labor