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Evaluating Job Offers: Questions To Ask
Before You Say “YES”
Prepared for the American Pharmacists Association by Christina
L.Greathouse, Ph.D., Partner, Strategic Performance Group
In the excitement of receiving an appealing job offer, often the
only thing we remember to ask is, “How much does the job pay?” and,
“When can I start?” However, as savvy job seekers know, there is
much more to consider than simply direct compensation. In addition
to base salary, the difference between a good offer and a great
offer often lies in the indirect compensation or benefits. So before
you sign on the dotted line, make sure you have the answers to the
following 74 questions.
Much of the information concerning health,
disability, life, retirement, and other benefits can be found in the
organization’s standard benefits brochure you may have received in
the interview, or along with your offer letter. Read the material
carefully and ask for clarification or more detail if you can’t
answer the benefits questions listed below that interest you most.
A word of caution: It is not a
good strategy to ask detailed questions about salary or benefits
(questions 1-59) during your initial interviews with the
organization. It will give the impression that you are most
concerned about what you are getting, versus what you have to offer.
Once you have effectively “marketed” yourself to the company and
they are ready to extend an offer, you can probe in more detail on
these issues.
Questions about the working environment
(60-74), however, are appropriate at any stage in the hiring
process, and in fact demonstrate thoughtfulness and depth. Remember,
a good interviewer can tell as much about a candidate by the
questions they ask as by the answers they provide!
Click to print this document as a pdf.
Categories Covered Within this Document
Include:
Medical Insurance
Dental Insurance
Disability Insurance
Life Insurance
Retirement and Savings Plan
Employee Leave
Additional Benefits
Culture / Working Environment
Medical Insurance
When assessing health insurance plans, the more choices the plan
offers, the better. Choices typically include:
§ Health Maintenance Organization
(HMO): Organizations of physicians and other health care
professionals that offer routine medical services at a specific site
for a fixed fee for each employee visit. Often the most
cost-effective, but the employee may not have a choice with regard
to the doctor they see.
§ Preferred Provider Organization (PPO):
A network of doctors similar to an HMO, but the employee is allowed
to choose from a list of participating doctors. PPOs often offer
coverage for a wider variety of services than HMOs (e.g.
chiropractic care and other alternative treatments). Employees often
pay a small fee (referred to as a “co-payment”) for each doctor
visit.
§ Indemnity Plan: This is a
traditional health plan that covers a fixed percentage (usually 80%)
of health care costs. While employees often wind up paying more per
doctor visit, they may select any provider they wish.
§ Flexible Benefits Plan
(also known as a Section 125 or “cafeteria” plan): Under this plan,
employees are offered a basic benefits plan, plus a number of
“credits” or benefits dollars that they can use to purchase whatever
other benefits they need (e.g. dependent coverage, vision care,
orthodontic coverage, supplemental life insurance, long-term care
insurance, etc.). This plan is not in lieu of the choices above, but
rather is a flexible way of administering the benefits plan.
The best health insurance plans will offer a
choice between a traditional indemnity plan, which allow you to
visit any doctor you wish, and a managed care plan, which restricts
your choices of doctors but lowers your out-of-pocket costs. Best of
all is a flexible benefits plan, which allows you to spend your
benefits dollars any way you wish. In addition to flexibility, look
for a plan that offers prescription drug coverage and vision care.
Most organizations require employees to
contribute something toward their health insurance coverage, both
for themselves and/or their dependents. In lieu of high premiums, a
plan may require a higher co-payment, deductible, or maximum
out-of-pocket expenses. Medical costs have skyrocketed in recent
years, and in some fashion or another, employers have had to pass
that cost along to employees. So, look at all costs combined. If the
premiums are low, the co-payments and/or deductible may be high. If
you do not visit the doctor often, this might be preferable.
Conversely, if you make frequent visits or take a lot of costly
medications, a higher premium and lower out-of-pocket costs might be
better for you.
Many organizations will allow you to deduct
your health premiums on a pre-tax basis, meaning that your taxable
income is reduced by the amount of the premium. If you are in a
middle to top tax bracket, the savings can be significant.
1. Please describe the organization’s health
insurance plan (HMO, PPO, Indemnity, Section 125, etc.)
2. When am I eligible to receive health insurance benefits (e.g.
first of month after hire, after 1 month, etc.)?
3. Is health insurance available to part-time employees? If yes,
what are the requirements (minimum of 50% FTE, etc)?
4. Does family health insurance include domestic partner coverage?
5. What is the total monthly premium I will pay for self coverage?
Does it vary according to the type of plan I choose?
6. What is the total monthly premium I will pay for dependent
(spouse or family) coverage? Does it vary according to the type of
plan I choose?
7. How much have the premiums increased from year to year (for the
past 5 years)?
8. For each type of plan described above, how much do I pay each
time I visit the doctor (co-payment)? Has that cost increased in the
past five years?
9. For each type of plan described above, what are the annual
deductibles for employee (self) coverage, and for family coverage?
Has that amount increased in the past 5 years?
10. For each type of plan described above, what are the maximum
annual out-of-pocket expenses for employee (self) coverage, and for
family coverage? Has that amount increased in the past 5 years?
11. What is the maximum lifetime benefit per person?
12. How is the health insurance plan funded (fully insured,
partially self-funded, or self-insured)?
13. Does the plan cover prescription drugs? If so, what is the
average cost per prescription to the employee? Is there a
deductible? Is there an annual limit to prescription drug benefits?
14. Does the health plan include vision care? If so, how much do I
pay each time I visit an eye doctor (co-payment)? Does the plan
offer discounted prescription lenses? Does the plan cover laser eye
surgery?
Dental Insurance
Some employers offer dental insurance as part of the overall health
insurance plan. The premiums are included in the premiums employees
pay for medical insurance. Other plans are administered separately
and require an additional premium. The best plans offer
comprehensive dental care, including orthodontia for both children
and adults. When assessing dental insurance plans, think about how
often you visit the dentist and what type of work you have done. If
you are there infrequently, lower premiums and higher out-of-pocket
costs might be most attractive. If you have children who require
orthodontics, you want to look for a plan that provides this
benefit.
15. Please describe the organization’s dental
insurance plan. Choices typically include (see Q1 for description):
a. HMO
b. PPO
c. Indemnity
16. When am I eligible to receive dental
insurance benefits (e.g. first of month after hire, after 1 month,
etc.)?
17. Is dental insurance available to part-time employees? If yes,
what are the requirements (minimum of 50% FTE, etc)?
18. What is the total monthly premium the employee pays for self
coverage?
19. What is the total monthly premium the employee pays for
dependent (spouse or family) coverage?
20. How much do I pay for the following services (referred to as
“co-insurance”):
a. Preventive Care (e.g. cleaning, x-rays)
b. Basic Care (e.g. fillings)
c. Major Care (e.g. crowns, dentures)
d. Orthodontia
21. What is the maximum annual
benefit per person?
22. What is the maximum lifetime benefit per person
(typically applies to orthodontia)?
Disability Insurance
Most people do not give a lot of though to disability insurance,
particularly when they are just starting their careers. However, the
chances that you will need disability insurance are much greater
than the chances of needing life insurance. If you couldn’t work for
a period of time, how would you support yourself?
There are two types of disability insurance,
short-term (STD) and long-term (LTD). STD usually provides salary
continuation for up to 90 days if you were to become ill or have an
accident that prevents you from working. After 90 days, LTD kicks
in. The best plans cover at least 60% of your salary while you are
disabled. Keep in mind, however, that disability benefits are
taxable just like regular income, if the premium is paid by your
employer.
In lieu of STD, some organizations require you
to use sick leave, which can accumulate to 90 days if unused. Since
most employees will not have accumulated 90 days of sick leave at
the time they are disabled, these plans are not as attractive as
standard STD.
When evaluating both STD and LTD, ask about the
waiting period before you start to receive benefits. The best plans
have short waiting periods. The ability to purchase additional LTD
is also attractive, since the coverage offered in the standard plan
might not be adequate to meet your expenses should you become
disabled. Finally, look carefully at the how the plan describes
disability. Inferior plans require that you be totally unable to
work at ANY job, while the best plans simply require you to be
unable to work at your chosen profession.
23. Please describe the organization’s
short-term disability (STD) plan.
24. When am I eligible to receive STD coverage (e.g. first of month
after hire, after 1 month, etc.)?
25. What is the total monthly premium I will pay for STD and LTD?
26. Is STD available to part-time employees?
27. How is the STD plan funded? (insurance, self-funded salary
continuance, or both)
28. What is the waiting period before short-term disability is paid
(e.g. 1st day of accident/8th day of sickness; after all sick leave
is exhausted, etc.)
29. How much does STD pay (e.g. percentage of salary, flat amount,
etc.)?
30. Please describe the organization’s long-term disability (LTD)
plan.
31. When am I eligible to receive LTD coverage?
32. Is LTD available to part-time employees?
33. What is the waiting period before long-term disability is paid
(e.g. 30 days, 60 days, 90 days, etc.)
34. How much does LTD pay (e.g. percentage of salary, flat amount,
etc.)?
35. What is the maximum monthly benefit?
36. Can I purchase additional LTD insurance?
Life Insurance
Evaluating life insurance is fairly simple. The more the plan pays
should you die, the better. The ability to purchase additional life
insurance is also attractive, since many people want more coverage
that what is provided in the standard plan, particularly if they are
the sole breadwinners in their family.
37. Please describe the organization’s life
insurance plan.
38. When am I eligible to receive life insurance coverage (e.g.
first of month after hire, after 1 month, etc.)?
39. Is life insurance available to part-time employees?
40. What is the total monthly premium the employee pays for life
insurance?
41. What is the maximum life insurance benefit (e.g. annual base
salary, 2X annual base salary, etc).
42. Can I purchase additional life insurance? If so, what is the
maximum amount? How much does it cost?
43. Does the organization offer accidental death and dismemberment
insurance? If so, what is the maximum benefit?
Retirement and Savings Plans
Retirement plans are often challenging to evaluate, since they can
be complex. But, a good retirement plan can be worth 10% of more of
your salary, so it is well worth your time to analyze it carefully.
The keys to a good retirement plan are flexibility and portability.
In addition, the most attractive plans include a significant
employer contribution, with or without the requirement that you
contribute as well. Accessibility to the funds in your account is
also important. Referred to as “vesting”, some organizations allow
the employee to own the fund immediately, others require 5 years
employment with the organization before the employee owns 100% of
the employer contributions.
Companies often offer one or more of the
following plans:
§ Defined benefit pension plan:
The retirement income an employee receives is determined by a
specific formula such as years of service, average earnings during a
specific period, and age at retirement. The benefit to this plan is
that it is entirely funded by the employer; you don’t have to make
any contributions. The disadvantage is that the plans often require
a long period of employment (e.g. 20 years) before you own the fund.
Should you leave prior to that, you lose the benefit.
§ Defined contribution plan:
The retirement income an employee receives is determined by the
funds accumulated in their account at the time of retirement.
Contributions may be made by both employees, employers, or both (as
defined by the plan). The advantage to this plan is that you have
more control over how much is in the fund, since you can typically
make contributions. You may also be able to choose how the money is
invested (e.g. choice of mutual funds). If you leave the company
before you retire, you are still entitled to some or all of the
retirement benefits if you are vested at the time of termination.
§ Section 401(k) or Section 403(b)
plan: These tax-deferred pension plans allow employees to
save through payroll deductions that are made before the employee’s
wages are taxed. Employee contributions are often matched to a
certain extent by employers. 401(k) plans are most common, but some
non-profits offer 403(b) plans which operate the same way (until
recently, non-profits were prohibited from offering 401(k) plans).
Employee contributions are often matched by employers. The main
advantage is that they are portable, meaning that you can take the
money with you when you go. You also have more control over how the
money is invested (e.g. choice of mutual funds) than you would have
in a defined benefit pension plan. Plus, some plans allow you to
borrow funds against your account. However, there are often limits
concerning how much you can save each year ($10,000 or the maximum
permitted by the plan), which makes them less generous than some
defined contribution plans. In addition, there are penalties for
withdrawing funds prior to retirement.
One other element to consider when evaluating
retirement plans is how they are funded. In theory, defined benefit
pension provide more predictability and security because you are
guaranteed benefits based on the plan’s payout formula. However, as
scandals like Enron demonstrate, pension funds of some organizations
are not adequate to cover their obligations. Similarly, defined
contribution and 401(k) plans guarantee nothing. The accumulation of
funds depends entirely on how much money goes into the fund and the
rate of return on investments, which as we know during the most
recent recession has been negative.
44. Please describe the organization’s
retirement plan (defined benefit, defined contribution, 401(k),
other).
45. When am I eligible to start participating in the retirement plan
(e.g. first of month after hire, after 1 month, after 1 year, etc.)?
46. Is the retirement plan available to part-time employees?
47. How much may I contribute to the plan?
48. How much does the organization contribute to the plan? Must I
contribute before the organization will contribute?
49. When does the money in the plan belong to me (vesting)?
Employee Leave
There are two key questions to consider when evaluating leave
policies: how many days are offered, and can leave be accumulated
and carried over and/or be converted to cash? In addition, you may
want to inquire about special leave such as for jury duty,
bereavement, maternity/paternity, etc. Progressive organizations
often offer combined vacation, sick and other leave, which they
simply call “paid time off” (PTO). This provides more flexibility,
allowing employees to use leave according to their needs.
50. Please describe the organization’s
vacation policy. How many days per year of service are offered? How
does vacation accrue (e.g. 4 hours per pay period, 1 day per month,
etc.)?
51. Can employees accumulate vacation? If so, how much can they
carry to the following year?
52. What is the company’s policy regarding compensation for unused
vacation leave if I leave the company? Can employees convert unused
vacation leave to additional compensation?
53. Please describe the organization’s sick leave policy. How many
days per year of service are offered? How does sick accrue (e.g. 4
hours per pay period, 1 day per month, etc.)?
54. Can employees accumulate sick leave? If so, how much can they
carry to the following year?
55. What is the company’s policy regarding compensation for unused
sick leave if I leave the company? Can employees convert unused sick
leave to additional compensation?
56. What other types of leave does the organization offer (e.g.
holidays, jury duty, bereavement leave, personal days, paid or
unpaid maternity leave, paid or unpaid paternity leave, etc.)
57. Does the organization offer compensatory leave (paid time off in
lieu of compensation for working overtime, which applies to exempt
employees only)?
58. What is the procedure for requesting time off? Do I have to
arrange for my own replacement?
Additional Benefits
There are a host of other benefits employers may offer, which should
be evaluated according to your needs and interests. For example, if
you work in a city and parking is at a premium, paid parking may be
worth up to $200 a month. Similarly, if you are earning a degree or
obtaining additional skills, tuition reimbursement might be a
critical benefit to you. Less tangible but perhaps just as valuable
are benefits like telecommuting, a flexible work schedule, and/or
casual dress.
Finally, before wrapping up your analysis, you
should find out if any of the benefits offered by the organization
are expected to change significantly in the next two to three years.
It would be an unpleasant surprise to find out one to two years into
the job that the benefits you were counting are no longer as
generous.
59. Does the organization offer any of the
following benefits? If so, please describe:
a. Sign-on incentives: What type of employment
requirement is required?; how is it paid out?; what is the
employee’s responsibility for repayment if they don’t meet the
employment criteria?
b. Relocation incentives: What expenses do they cover?; are the
payments a lump sum or exact amount only?; are the payments adjusted
to offset tax implications?
c. Incentive compensation (bonuses)
d. Stock option programs: What are they, and if offered, how are
they structured?
e. Company car
f. Transportation allowance
g. Parking
h. Health/fitness club membership
i. Tuition reimbursement
j. Professional certification fees (e.g. certificate training, NISPC,
BPS)
k. Professional licensure fees
l. Professional society or association dues: Does the employer
reimburse for all or part of annual dues?
m. Professional meeting attendance and organizational participation
n. Promotion of interaction with other health professionals and the
community (e.g. talks to the public, detailing physicians, etc.)
o. Severance pay
p. Unpaid leave of absence/sabbatical
q. Computer equipment for home
r. Cell phone
s. Child care
t. Casual / business dress
u. Telecommuting
v. Flexible work schedule
60. Are there any benefits you currently offer
that will be eliminated or reduced in the near future?
61. Are there any benefits you currently offer that will be enhanced
in the near future? Do you plan to add any new benefits?
Culture/Working Environment
62. How would you describe the culture of the
organization?
63. What do people like about working here?
64. What do people wish they could change about the organization?
65. How long is a typical work week?
66. What is a typical work schedule?
67. How strong is the team/department that I will be working with
(are they technically competent, do they have good management
skills, etc.)
Management Style (ask the person to
whom you would report):
68. Describe your management style.
69. How will I know I have been successful at this job after I have
been here a year? What are your performance expectations?
70. What do you most value in an employee?
71. What bothers you the most?
72. May I see a copy of the performance review form you use?
73. How do you decide how to award salary increases? Promotions?
74. If I do a great job, where can I expect to be in 3 years? In 5
years?
75. Why do you like working here?
76. What frustrates you?
77. What do you consider to be the key selling points of the job?
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