Are you being paid what you are worth?
Take home salaries must be addressed to ensure that people earn what they are worth. Salary structures are as varied and different as the organisations that pay them. Some are structured to ensure that the employee gains significant financial rewards; others are not.
“It is important for the job seeker to understand if the company is offering a basic pay and benefits or if the company is offering a total package (cost to company),” says Nazlie Samodien, South African Rewards Association (SARA) Exco member. “Take home pay can vary depending on how the company’s remuneration is structured. I’ve seen job seekers earning a basic salary of R15, 000, for example, being offered a total package of R20, 000. They are under the impression that they are being offered an increase of more than 30% without knowing that they must now pay for all the benefits from the total package that is being offered.”
According to Samodien there is no rule of thumb on what to ask for on remuneration, it is dependent on the seniority of the role, the scarcity of skills that the job seeker has, the availability of variable remuneration such as commission and the level of experience that the job seeker has to offer. There are a number of considerations that the employee or job seeker needs to take into consideration before accepting a salary offer.
Establish payment structure
The first is to establish whether or not there is variable pay such as a commission and how the company structures the commission scheme. “I would advise that potential employees ask what the average commission payments have been with other employees in the role over the past six months,” says Samodien. “This will then put them in a better position to understand what measures are used to calculate commission and how hard or easy it will be to earn.”
Consider total earnings
This incorporates any other incentives provided by the business such as bonus payments or long term incentive schemes. An employee can be worse off if they don’t consider these variable pay elements over both the short and long term.
“Depending on what a candidate is sacrificing in their current role they may want to negotiate this on appointment,” says Samodien. “For example, if they are eligible for a bonus with their current employer and the payment is imminent, you can negotiate an on-appointment bonus with the new company. It is also worthwhile asking the new company for a mock payslip so that it is obvious to see what will be paid into the bank account once all the deductions have been made.”
“Depending on the role, the successful candidate may need to do a lot of travel and a company car or fuel card may need to be factored in,” says Samodien. “Then there is medical aid, retirement plans and income protection benefits for the employee in the event of death or disability. It is worth asking what the returns on the retirement funds have been over the past five years and what the taxes on these benefits will be.”
In addition, it is important that the employee establish those aspects of work-life balance that they need to thrive. Many organisations offer gyms, crèches, wellness centres and more, ensuring that their staff have opportunities to unwind or look after their children.
“Some employers have outstanding recognition programmes that are linked to performance and that can include overseas trips and these form part of the employee value proposition,” concludes Samodien. “Job seekers need to consider all of the reward elements that are on offer, especially if the pay element is not quite what was expected, to determine if the long term benefits will outweigh the short term salary sacrifice.”
MEDIA CONTACT: Cathlen Fourie, 012 644 2833, email@example.com, www.atthatpoint.co.za
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