This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our PRIVACY POLICY for more information on the cookies we use and how to delete or block them.
  • Job Offer? The Devil is in the Detail
Articles:

Job Offer? The Devil is in the Detail

29 August 2016

By Lesego Mpete, Employee Benefits Corporate Consultant at BDO South Africa

The prospect of starting a new job brings a mixed bag of emotions ranging from excitement, euphoria, a little anxiety, the guilt of leaving your old job; and perhaps even wondering if the organisational culture at your next job will be to your liking. But are you sure the new offer is worthwhile?

Employees often get caught-up in emotions and forget to answer some important questions before agreeing to join a new company. One of those being “am I really getting a better deal, or does the offer only look good on paper?”

Tough questions need to be asked before changing jobs. Make sure you get all the answers before making any decisions. For companies to attract and retain the best talent, corporate benefits have become increasingly important to have. The trick is knowing how far your salary is taking you now, and how far it will take you should you move jobs.

Employee Benefits Corporate Consultant at BDO, Lesego Mpete, says often people are quick to change jobs without knowing exactly what they are getting themselves into. “I cannot stress enough the importance of speaking to a financial planner before changing jobs. Some of the decisions people make when changing jobs are short-sighted.”

“We often come across employees who leave their current job for ‘more money’, only to find that the monetary value of their package is actually not worth the move. This is because some companies do not disclose the type of corporate benefits they offer – if they have any at all,” states Mpete.

When starting a new job, it is important to ask the right questions and probe whether the company you are moving to has any corporate benefits, such as life cover, dread disease cover, pension or provident fund and even funeral cover. “These are the type of probing questions prospective employees should be asking during job interviews,” explains Mpete.

She further elaborates that “Leaving a company that has corporate benefits for one that doesn’t, but pays more, is a massive risk. This is because once you leave behind the benefits you had, you are then forced to go and get them on your own, and this option is likely to cost you more.”

Obtaining life cover, salary protection insurance, or even a funeral cover on your own is likely to be more expensive when compared to getting it as group employee cover. An individual risk assessment will be more expensive as well, because now it is no longer a group of employees that is assessed but the individual. Imagine how high your life cover premium is likely to increase if you are perceived as a high-risk client.

Mpete warns against employees who join companies without corporate benefits. “Your salary is your biggest asset, and if you are working for a company that doesn’t offer salary protection, dread disease cover or life cover, think of what could happen to you or your family should you find yourself in a position where your income is compromised. This means that if you have a bond or a financed car, the bank might be knocking at your doorstep to repossess both. This also means you may not even be able to provide basics such as food, for your family.”

But providing for the immediate is not the only burden that faces every employee, there is also the often ignored, yet unavoidable, retirement age that will come sooner or later in one’s life. Retiring comfortably is something that very few South Africans will ever enjoy. According to the Financial Planning Institute of Southern Africa, only 6% of South Africans can maintain their standards of living during retirement. Alarming! Mpete says to avoid becoming a state burden post-retirement, people need to have a pension fund. “Can you imagine living a comfortable life and once you reach retirement age, you begin to live like a pauper? This is the sad reality that many South Africans face when they reach retirement. A retirement fund can be the difference between a great retirement and a daunting one,” concludes Mpete.

Read more BDO Insights