You will be able to give each benefit and working condition a yearly cash value you can add or subtract.
The HR person on Hui Min's call for the S$4,000 job says the benefits package is "worth about S$3,000 a year". It sounds generous. It also sounds like a number someone in HR worked out to make the package look good, and Hui Min has no idea how they got it.
A benefit has a cash value, but the employer's figure is rarely the right one for you. This lesson shows you how to price benefits, leave and working hours yourself, so they go into your comparison as numbers you can defend. As before, the figures are made-up examples.
The test for any benefit is one question: if the job did not give you this, what would you spend to get the same thing?
Take a flexible benefits allowance of S$600 a year that can go on a gym, dental work or a health screening. If you would happily pay S$400 a year for a health screening and a few gym sessions anyway, the allowance saves you about S$400. The other S$200 is only worth something if you would have bought it with your own money. If you would never set foot in a gym, a gym subsidy is worth close to nothing to you, whatever it costs the company.
Outpatient cover works the same way. Hui Min sees a GP perhaps three times a year. At an example cost of S$40 a visit, cover that pays for those visits is worth about S$120 to her. Dental cover for one check-up and scaling a year might be worth S$150 at the price she would otherwise pay. Group hospital cover is harder to price, because you hope never to use it. Module 3 looks at what it covers and where it stops; for now, note it as a benefit and come back to it.
Write the assumption next to each figure. "S$120: three GP visits at S$40" can be checked and changed later. "S$120" on its own can't.
Annual leave is paid time off, so extra days are worth what you are paid for a day. A simple way to get your daily rate is to divide yearly base pay by the number of working days in a year. With a five-day week, that is about 260 days.
The S$4,000 job pays S$48,000 a year in base salary. Divided by 260, that is about S$184.62 a day. It offers five more days of leave than the S$4,200 job, so the extra leave is worth about 5 times S$184.62, or roughly S$923 a year.
Some people value leave higher, because time off matters to them more than the cash. That's a fair choice. Write down which figure you used and why.
Monthly salary hides the hours behind it. Ask both employers what a normal week looks like, and if you can, ask someone who works there. Then work out what you earn per hour.
Hui Min hears that the S$4,200 team usually works about 55 hours a week, and the S$4,000 team about 44. The S$4,200 job pays S$50,400 a year in guaranteed cash. Divided by 55 hours times 52 weeks, that is about S$17.62 an hour. The S$4,000 job, with its contractual AWS, pays S$52,000 a year. Over 44 hours a week it works out to about S$22.73 an hour.
Add the commute and the gap widens. The S$4,200 office is 75 minutes each way from her home in Woodlands, so about 12.5 hours a week on the train. The other office is 30 minutes away, about 5 hours a week. Count those hours and the rates fall to about S$14.36 and S$20.41. The job with the bigger salary pays less for each hour of her life it takes up.
You do not have to subtract hours from your total compensation figure. Keep pay per hour as a separate line, because it answers a different question: what am I giving up to earn this?
Some employers sponsor a course or a certification and ask you to sign a bond: an agreement to stay for a set period or repay some of the cost if you leave early. A bond is a liability, so it goes in the costs column, not the benefits.
Note three things: the length, the amount, and how the repayment falls over time. Say a company pays S$8,000 for a course with a two-year bond, and the amount you repay falls in equal monthly steps. Leave after nine months and you owe 15 of the 24 months' worth, which is S$5,000. The course may still be worth doing. What matters is that you know the figure before you sign, because it limits your options if a better job comes along.
None of these figures will be exact, and they do not need to be. A number with a reason beside it beats a precise-looking number nobody can explain, including the one HR quoted Hui Min. Your own offer is next.
Estimate a yearly cash value for five benefits or conditions in your offer and write down the assumption behind each.
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