Gen X Building Workplace Wealth

Gen X: How to Increase Wealth in the Workplace

When I first kicked off my career, I didn’t pay much attention to my company benefits. I was simply trying to pay the least amount per month out of pocket. The longer I stayed in the workforce, the more I realized the importance of paying attention to my employer’s benefit options, as these can greatly influence one’s overall health and financial wellness. Here are a few tips on how to make the most of your employer’s financial offerings.

Maximize your company’s benefits.

We collectively applauded when KPMG increased its 401(k) employer contribution to 6–8 percent, based on job tenure, regardless of employee contributions. Though this may have been propelled by the great resignation, it certainly seemed to be a move in the right direction. Nevertheless, we were left with some questions: Could this be a victory for those in the workforce and for building workplace wealth? Or is this simply a corporate trend or fad to help woo potential employees? With over 2 million people out of the workforce, what needs to change? For those remaining in the workforce or planning to return, how can we use this moment in time favorably? Well, it starts with deciding what you want, and then seeking help from a personal mentor, your professional network, or a trusted financial advisor.

Djuana Beamon, Chief Diversity Officer at People’s United Bank, says, “[My] certified financial planner, Zaneilia Harris, has been instrumental in assisting with salary negotiations and ensuring that I’m not short-selling myself. She has a good pulse on current trends in executive compensation, as well as suggesting other strategies that I may not have [considered].”  Essentially, do your own detective work when researching options. Then, ask for what you want.

Consider the importance of salary negotiation.

Beamon wants to remind others that everything can be negotiated, beyond your base salary.  “Candidates have to realize that their salary package is not just comprised of their base salary. First and foremost, everything is negotiable. You can negotiate your salary,” she says. “Employees also have to take into account all elements of their compensation package including their bonus structure, employer’s 401(k) match, Health Savings Account (HSA) contributions for any healthcare incentives, and any other benefits such as deferred compensation, student loan repayment, and tuition reimbursement. I also consider things like vacation time or PTO. If the salary isn’t exactly aligned to where I would like to be, I would also negotiate my PTO. Having extra time off can be just as beneficial as monetary rewards.”

Because at this stage in life, you are striving to maximize your income. And your unique skillset is your greatest bargaining chip.

“I remember interviewing for a position earlier in my career, and when asked for my salary requirements, I threw out a number and the hiring manager said, ‘No problem,’” Beamon adds. “I immediately said a four-letter word in my mind because I knew I had gone too low.”

Don’t forget about equity, and use it to your advantage.

Many technology companies have been known to offer stock incentives to entice employment, commitment, and loyalty. Stock options give an employee the right to purchase a specific number of shares at a certain price in the future. The benefit, which could be a windfall, is when you, the employee, use your vested options to purchase the stock at a certain price — but then you can sell your stock when its price is higher. This will result in you gaining a profit off the granted stock options.

Remember the late 1990s internet boom? Many start-up employees became wealthy on paper if the company became publicly traded via an initial public offering (IPO). At the time, this was a new way to compensate valuable staff members when a significant salary increase was not an option. Now, you see this compensation offering within other industries, especially when hiring or promoting mid- to senior-level executives.  Beamon states, “I look at what I may be leaving on the table, such as… any unvested stock options.”

Think about additional methods of compensation.

At the senior executive level, other compensation beyond salary and bonuses are on the table. Some companies want to expand their offering of traditional retirement benefits to key employees. One such example is providing profit-sharing. This option allows a company to give employees a share of its profits, and the amount can be based on a percentage of its annual earnings. That’s why it’s crucial to make a habit of connecting your work performance to a financial line item within your organization.

It is absolutely necessary to have a plan and a strategy around your salary package considerations. As for her final thoughts, Beamon emphasizes the importance of starting early.  “Start planning your strategy as soon as you are considering applying for a new opportunity,” she says. “Don’t wait until you are asked for your salary requirements.”  And don’t forget to take advantage of helpful resources such as Salary.com, Glassdoor, LinkedIn, or a skilled headhunter.

Don’t Forget to Spread the Word!

Zaneilia Harris, CFP®, is the President of Harris & Harris Wealth Management Group in Washington, DC. Follow her on Twitter at @hhwealth.