The famous phrase from the old BT television adverts came to mind last week as I spoke to a new recruit called Peter during a visit to one of my clients.
The young lad had just been appointed full-time in his role and was hugely pleased to have, in his words, “a proper job”.
His satisfaction was a little diminished when he learned his mate had also secured a position but apparently on higher wages. We compared their respective remuneration packages. While Peter’s pal was earning more money, he was not receiving any benefits other than the regulatory workplace pension.
Peter not only received generous pension contributions from his employer but also enjoyed the advantages of group life cover, group income protection (covering his wages in the event of long-term sickness) and private health insurance.
As this was Peter’s first job, he had not appreciated these additional benefits were being provided at no additional cost to him. If his friend wanted to replicate them, he would have to pay from his salary.
Not only were Peter’s benefits supplied at no cost but, with the exception of group private medical insurance, they did not have tax implications. By contrast, his friend would have to purchase the same cover from wages on which he had already paid income tax and national insurance.
Peter also came out on top in the sense that although there was a tax impact on private medical insurance, because the company was able to supply this cover as a group benefit the cost and, therefore, the income tax element was heavily discounted.
As we concluded our conversation, Peter felt distinctly happier about his arrangement.
Up until that point, he had no concept of how much the package was worth to him.
But when roughly working it out with all his benefits taken into consideration, he was actually being paid marginally more than his pal.
It is easy to see how staff who have little knowledge of their employment benefits can often end up moving jobs for an apparent pay rise only to discover it is nothing of the sort.
Employers need to explain things properly, rather than assume employees understand their benefits.
The alternative is to risk losing staff to competitors who are, in truth, offering less “real pay”.
Employees need to ask questions when considering job offers before making a decision.
Yes, on balance, it is good to talk.