Job offers tend to be take-it-or-leave-it, with the employer dictating virtually every aspect of the job and even seemingly unrelated things such as your health care and retirement plans. If you have a valuable skill set, you may be able to negotiate a slightly higher salary, or get a bit more equity - but that's really it. There is almost no negotiation around the structure of compensation, and many other important aspects of the job - and that's a shame. For companies that are competing for talent, there are a lot of ways that they can give employees a better deal, without having to spend more money. Here are a few:
Americans work too much, and despite our good intentions, it's actually not even good for us. I personally feel guilty taking vacation and as a result only took 2 days off in my last job, which I was at for the better part of a year. If a standard worker gets 10 federal holidays and 3 weeks of vacation, that means they are working 47 weeks per year. I wonder how many people would opt for a 10% pay cut to get an extra 4.7 weeks of vacation per year? If it were more socially acceptable, and my employer didn't think lesser of me I'd take that in a heart beat. Similarly, it would be great to be able to choose to work less hours per week, say leaving at 3pm instead of 6pm every day, in exchange for less money. Finally, only 21 of Fortune's 100 best places to work offer employees the chance to take a sabbatical. This is a benefit that doesn't really cost an employer anything if they are sufficiently organized, but could make a huge difference in the life on an employee and their family to get a few months to travel while still having the security of a job to come home to.
Contractor vs Employee
The choice to become a full fledged employee or an independent contractor should be just that - a choice. There are lots of benefits and drawbacks to each route, but this isn't usually even on the table for jobs I've interviewed for in the past. For companies, either way they would be paying the same money - either via a consulting agreement, or via salary, equity, benefits and payroll taxes. Companies should be much more open to paying their employees as consultants. Offer letters should be an explicit choice to either take an outlined employee compensation package or an equivalent outlined consulting package.
The employer provided healthcare system is far from ideal, but is a reality that we are stuck with for the time being. This means that any money an employer puts towards their employees health care is not taxable income. However, most employers don't cover 100% of their employees health expenditures, causing people to have to use post-tax income to pay for visits to the doctor or prescriptions. I'd much rather get my employer to cover all of my heath care needs, and take a lesser salary as a result. In this scenario for the same cost to the employer, the employee would also gain a surplus of their marginal tax rate times the amount they used to spend on health care out of pocket. Conversly, for employees who are young and healthy, they should be allowed to get cheaper health care plans in exchange for more salary. Either way, this should all be part of a negotiation, with the employer figuring out a way get each employee the optimal level of health care.
Similar to the tax benefits of health care, there are also huge tax benefits to saving for retirement via an employer sponsored 401k account. There are zero taxes owed for all employer contributions to an employee's 401k account, unlike employee contributions, which are subject to FICA taxes. The most common 401k match is for the employer to match any contributions an employee makes, up to 6% of the employee's salary. This to me seems absurdly partly. Employers are allowed to contribute up to $34,500 per year to an employee's account. I would love to be able to take a lower salary in exchange for a higher employer 401k contribution, maybe even maxing out! Furthermore, the idea having employer matches vest over a period of time should definitely be up for negotiation. I'd rather get either a lower match that vests immediately, or switch any longevity based compensation to regular income or company stock and have my 401k matches vest immediately.
Buffer is a very interesting company, with transparent salaries and cap table. They give each employee the option of reducing their equity stake in exchange for $10,000 more salary. This is awesome, but it is all too rare. People should be able to choose exactly the balance of equity and cash they are compensated in - determining their tolerance of risk, their need for immediate cash, and the differing tax treatments of each type of compensation. Furthermore, similar to 401k match vesting, the standard 1 year cliff with a 4 year vesting period for equity grants should be open to negotiation.
Attending conferences can be a great way to learn about your field, network with industry luminaries, and even promote your company. There are probably a half dozen or so conferences that I could personally attend and get a lot out of. I'd actually be willing to accept less money in exchange for my employer paying for my attendance at these conferences. Like health care and 401k, if my employer pays for me attending a conference, it is not taxable income, so it makes more sense for them to pay than me paying out of pocket. Since it cost the same to employers to either pay me in cash, or pay me in a bit less cash plus conferences, they should have no problem with this kind of negotiation.
Some extremely successful tech companies such as Github, Basecamp, and Automattic are 100% distributed and thriving. This allows companies to save money by not having an office, and of course for employees working remotely is amazing and highly productive. Some distributed companies like Buffer take the savings they accrue from not having an office into paying for multiple international employee retreats per year so that people get to know each other. To me, being able to work remotely is perhaps the ultimate benefit, and should without a doubt be on the table for negotiation.
1. "Unlike your contributions, the match is not subject to Social Security tax" source. Also note that contributions to 401k are technically tax deferred, since income taxes will be paid upon withdrawal years or decades later. ↩
2. 52,000 total limit - $17,500 individual limit source: IRS ↩
3. http://online.wsj.com/articles/SB10001424053111904491704576573031077286372 ↩
4. http://open.bufferapp.com/introducing-open-salaries-at-buffer-including-our-transparent-formula-and-all-individual-salaries/ ↩