Salary vs. True Compensation

formsofcompensation

While earning money is great, it should never be the only form of compensation you receive. In fact, there are actually many formats of compensation, including, but not limited to, intellectual stimulation, learning valuable skills, gaining important experience, enjoyment, meeting interesting people (perhaps life-long friends), seeing interesting places, feeling fulfilled, etc. 

So, when reviewing the compensation for your current job or one that you’re considering, be sure to include the value of the intangibles you receive as well. If you do this, you just might realize that a job is, in fact, offering fair compensation.  It’s hard to assign a dollar value to intangibles like feeling fulfilled or meeting stimulating people, but I believe these items are often much more valuable than any money received.

There are lots of high paying jobs that provide no additional value (or formats of compensation). Those jobs are often the ones that are the least satisfying and the one that people can only tolerate for short periods of time. The highest paying jobs are definitely not always the most satisfying. Conversely, jobs that offer a sufficient salary plus a mix of less tangible benefits are usually the best ones. As we all know, money doesn’t buy happiness. While a job is not always associated with happiness, I have found the greatest contentment in the workplace when I’m doing something that offers varied compensation.

Here are some examples of roles with successful compensation mixes:

  • Airlines are perfect examples of workplaces that offer a mix of good benefits, but usually pay lower salaries. People working at airlines are usually very intentional about working in a place that allows them to travel inexpensively (high value benefit) – which creates amazing experiences and memories. These people concede a little bit on salary but gain a lot via travel and flight benefits. Combine the value of being able to inexpensively travel with an airline salary and you have a big total compensation package.
  • Teaching school is another example of a job with a higher value mixed compensation package. While teacher salaries are not very high, when you add the value of summers and school holidays off, the total compensation for these people is actually quite high. Many people would accept 25% less salary in their regular jobs if they could take the summer months off.   Think of all the things you would do and see with your summers free.
  • I have been in the ad agency world for a long time. Once we figured the business out, we realized that certain clients made our jobs more interesting, even if they paid less. So, we started selecting those clients only, which made all of us much more interested in our work, despite losing some percentage of billable revenue. The new clients provided a much more broad and ‘rich’ experience for all of us and that added to the overall compensation we received.
  • My wife is an optometrist who always worked full-time for the same clinic. Working at the same clinic, while the most lucrative way to practice, was not ideal for her. So, she decided to become a contractor who fills in at several clinics around town and even in other states. In this way, she was able to meet new people, learn new clinic styles and experience different cities. She also gained full control of her schedule. She definitely earned less, but she was happier going to work. Her compensation while contracting included a number of intangibles that combined to be much more than the pure high salary that she left as a full-time doctor.
  • A friend of mine is an Emergency Room doctor who, in addition to working standard ER shifts, travels a lot speaking on public health matters. He doesn’t make money when he travels for speaking engagement, but he gets to see the world, meet interesting people and interact in a unique manner. If he worked more shifts in the ER (instead of traveling/speaking), he’d make much more money, but, to him, his mixed compensation while traveling and working in clinics is ultimately much richer, because he’s happiest and gains in other ways.

There are lots of examples of this type of ‘mixed’ compensation. I’m sure you can think of a number of scenarios. Ultimately, we all need to earn enough money and we should always be financially responsible. I’m only suggesting that you consider a broader definition of compensation before you condemn one job or another. And, perhaps this thinking will help reinvigorate you about your current job.

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