This blog continues a two-part series on job seeking. For those readers happily employed or otherwise retired to a life of work-optional, this may not be the most salient read, but it could prove useful for someone else in your life. Otherwise, you can expect us to return to some of our more regular or otherwise “normal financial educational” programming next week.
So last week, we discussed the importance of signals in the job market. As a quick recap: Your qualifications (education and experience) form the foundation of how you show to employers you’re qualified for a position, structuring your application to satisfy both algorithmic and human screening is important, and completing the testing or interviewing process with the principles of signaling in mind is all the more important as you arrive at the penultimate or final hurdles required to receive a job offer.
This week, we’re turning the tables and talking about employer signals: What the sharing or withholding of certain information in a job posting can indicate and what a benefits package can tell you about a company.
What a Job Post Says
There is a popular format for job posts, and I absolutely despise it. It follows this general organizational structure:
- Why this company is awesome and you’d be lucky to work there
- General description of the job that reads like an excel spreadsheet was tortured into a paragraph
- Long list of “requirements/qualifications” that no one on earth has
- Absence of compensation information
- Concludes by sending you to a job portal to transcribe your resume by hand into a company database, while providing no information on the hiring timeline or expectations
It’s easy to see why it’s a despicable arrangement. It emphasizes the importance of the company, gives you very little information about the position itself, intimidates you into not applying, or otherwise encourages the delusional or overconfident to apply, and asks you to put forth effort without a clear understanding of rewards. The worst of these will include useless compensation information. Things like:
- Compensation competitive
- Salary commensurate with experience
- Unlimited earnings potential!!!
- Group Insurance Benefits
- Bonus Program
- Retirement Plan
Pop quiz: Can you tell me what that position will pay, how you earn a bonus, what insurance benefits are available and who they cover and what they cost, and could you describe the retirement plan’s matching and vesting provisions, along with any of the plan costs or funds available for you to save into?
Of course not. Because the job posting is designed to impress you with how awesome the company is while simultaneously asking you to take it on faith that the compensation will be commensurate with their hiring expectations and job performance metrics, which you will not be privy to until the last minute or even after you’ve taken the job!
So what signals are meaningful in a job posting? Let’s break it down.
Compensation (Salaried and otherwise)
Whether the position is in a state like Colorado, where you must post the compensation range by law, or whether you’re applying to a national company or in a state that doesn’t require such transparency, the range of compensation, whether it’s shared at all, and how it’s structured, can be quite telling.
For example, any position posted in 2025 with a salary of less than $58,656, whether in part or as part of a range, indicates that the company may not be familiar with minimum standard salary thresholds. For example, a job post offering a salary range of $50,000 to $70,000 would technically have to pay an hourly calculated rate and maintain overtime eligibility for employees earning less than $58,656. Thus, it’s not surprising to see that many positions offering a salary start with a minimum range above $58,656 to avoid the overtime issue. This can even be a point of negotiation if you’re ever offered a salary below that line (e.g., “Would it not make sense to pay me $59,000 and have me be overtime exempt?”)
Another signal to look for is when there is a posted range, but the range is enormous. For example, a range of $60,000-$120,000 for a position suggests that the company is uncertain of the value a position is supposed to generate, or what the appropriate level of compensation is for someone they might hire. This suggests a somewhat vague or unstructured bit of business planning on the part of the firm. Some might argue that offering a wide range lets you attract a larger range of candidates, but let’s challenge that supposition: Every position in an organization is fundamentally supposed to provide some amount of value, and in turn, every company must budget for the cost necessary to provide that value. Want to hire a person to stock the shelves in a retail business? We’re talking about spending $15-$20 an hour plus taxes and maybe some benefits; in turn, the business needs to generate sales in excess of those wages, taxes, and benefits, for that hire to make sense. In turn, want to hire a senior software engineer? We’re probably looking for around $200,000 in annual salary, with bonus, equity options, and full-stack benefits. Don’t have those to offer? Then you’re hiring someone with fewer qualifications than a senior software engineer. It’s meaningful to understand that when a company can’t appropriately price its compensation package commensurate with the value the role is intended to generate, they’re often struggling with challenges in management or organization.
“Compensation commensurate with experience” or similar phrasing indicates a modestly more nefarious version of the issue above. While too wide of a compensation range can signal that the company doesn’t really know what it wants or needs for a role, a firm declining to share a compensation range indicates a generally realpolitik perspective on paying employees. Rather than having a uniform structure of pay bands and scales for experience or qualification in the various roles within the firm, a failure to share any compensation suggests that the company offers what it thinks candidates will accept. This can lead to very unequal salaries for similar work (sometimes to the extent that it violates applicable federal and state equal wage laws) but more so leads to a bit of a mercenary environment, in which your gain is the company’s loss, and negotiation for compensation is a normal business practice for all the wrong reasons.
Bonuses and “Unlimited Earnings Potential”
Many positions customarily come with a bonus, incentive compensation, or commission structure. In certain industries, these take a commonplace form, such as stock options for pre-IPO tech companies and RSUs for post-IPO tech companies. In others, bonuses can be entirely discretionary on the part of managers and owners, or may not be clearly aligned to any particular business system or KPI that you have any direct insight into. Still, there are some basic truisms of “variable compensation” as we’ll put it going forward.
The most fundamental truism of variable compensation is this: more base equals less variable, more variable equals less base. Neither is intrinsically better or worse, and it has far more to do with your preferences and sense of motivation. While a high base salary with low variable compensation potential can signal stability or safety, there is no guarantee that your job is protected indefinitely and cannot be laid off, downsized, or outsourced. In turn, just because the company says the position comes with unlimited earning potential, it doesn’t mean that it’s a realistic expectation that you’ll be making as much money as you can imagine.
What matters in terms of each type of compensation differs. In base compensation, it’s important to understand where your base lands in relation to national and regional norms for your role and level of qualification. If the position is underpaid relative to regional or national median figures, then you should anticipate stronger variable compensation or benefits offerings. If neither is obvious and present, then that’s a clear sign to look for opportunities elsewhere. In turn, if a position is offering far greater base pay than is normal for your role, then it’s important to ask about what benefits might be missing (e.g. higher salary with lower benefits) or what the extra pay is paying for.
For example, an associate financial planner (pre-CFP® Certification with about a year of experience) recently asked me if I thought $60,000 was decent compensation for their role and experience. I said it was, but then they clarified that they were working 60-70 hours a week. In that case, certainly not! While $60,000 is a common level of base pay for many entry-level and early-career planning positions in the financial planning world, that typically supposes that you’re working a normal 40-hour work week!
In turn, as variable compensation becomes a bigger part of your take-home compensation package, it’s very important to have a clearer understanding of what goes into calculating what your variable compensation will be! It’s not a meaningful thing to really understand if your bonus is only supposed to be 1%-2% of your annual base compensation. But for those in sales-focused or production-focused roles, variable compensation can often be several hundred percent more than base compensation, and thus, the importance of understanding which levers need to be pushed or pulled to be well-paid, and thus drive your workplace behavior and priorities, is critical. In cases where employers offer a “black box” explanation that it’s somehow rewarded on a holistic evaluation, rather than aligned to clear metrics such as cases closed, clients served, sales made, revenue generated, etc.? Time to look for other opportunities.
Insurance Benefits
There tends to be three or four versions of insurance benefits on offer by companies:
- No benefits at all
- One benefit (QSEHRA, health insurance)
- All benefits are largely at your cost
- All* benefits are covered by the company
For many small businesses, offering benefits doesn’t make sense. Go back to the retail business from our earlier hourly shelf-stocking example. Offering something as simple as health insurance at the business’ cost could easily increase the monthly cost of an employee anywhere from 25%-100% more than their hourly wages alone. Health insurance easily costs a company several hundred, if not more than a thousand, dollars a month per employee, and that’s without getting into family members!
But, as a company grows and begins to seek to have team members or at least certain key employees around for the long term, you will typically see them start to offer a range of benefits. When you get past the “it doesn’t make sense” business reality, then looking at what benefits are offered becomes a material and significant portion of what a company is signaling to its applicants and tells you a lot about what it values.
When a company only offers one specific insurance benefit, that is typically indicative of a “must do” and not a “want to” sort of offering. This could be because the business owner wants to take advantage of the benefit for themselves or their family and offers it sparingly where necessary to others, or could be that they have crossed a federal or state law line requiring them to offer that specific benefit. This signals a business reality in one form or another. Either that the company does not have a compensation philosophy based on strong benefits offerings, that the company cannot financially support such offerings, or that the company doesn’t value such offerings. How relevant this is to you may vary significantly based on your life stage and the composition of your household!
When a company offers a full variety of benefits, that’s something that should be recognized as the sign of a more mature business. That’s not to say anything about a level of revenue, number of employees, or even their compensation philosophy. Simply that businesses of any sort of size at some point will put in place a benefits program to tend to the diverse and varied needs of their current and future team members. A business offering a full variety of benefits typically is going to have a stronger organizational structure and a bit more formality to how they do business.
A key issue then is whether the company offers benefits at your expense, partially at your expense, or entirely at their expense. This is where our earlier “all*” comes in from the list of scenarios above. Simply put, benefits are expensive. Unlike taxes or retirement matching, benefits costs typically don’t scale as a percentage. Thus, benefits offerings are going to be more expensive based on the number of employees rather than relative to their overall compensation package. It costs just as much to give a 30-year-old attorney an ACA gold health insurance plan as it does to offer the same plan to a 30-year-old cashier. Thus, generous coverage of the cost of insurance benefits is more likely to be found in companies with a high revenue-to-employee ratio, more so than those with a low-revenue-to-high-staffing ratio.
A separate but equally important issue is whether the company pays for the employee’s benefits (in part or in total) and whether the company extends those benefits to the employee’s family members, e.g. covering health insurance for the whole family or just the employee and adding the family at the employee’s cost. I’ll admit, this is perhaps the single most challenging decision we’ve ever made regarding compensation here at MY Wealth Planners. We ultimately came down on a decision to only cover employee’s benefits; not because we wouldn’t want to cover family members or don’t recognize the significant cost that creates for employees to do, but because that substantial difference in cost creates a general inequality between employees. When hiring, whether someone was single or had a family could become a consideration in whether to hire them (an illegal one, mind you, but let’s not pretend that there aren’t human and financial realities that come into picking employees), and in turn, if family members are covered by the company, that creates a greater level of compensation for a married employee or one with children than one who is single. We ultimately settled on covering employee benefits but leaving the cost of additional coverage for family members to the employee. It’s not the “right” answer, but it’s the one that hedged the risk of the financial conflict of interest when hiring and staffing best for us.
Retirement Plans
The type of retirement plan and the matching or non-elective contributions made by the company can tell their own story. A retirement plan such as a SEP or SIMPLE IRA generally indicates that the company is cost-sensitive. Offering even a startup 401(k) can come out of pocket for an organization in the thousands of dollars annually, above and beyond the costs of profit sharing or matching contributions. SEPs are popular in companies with high employee turnover where retirement isn’t though of as much of a retention tool. SIMPLE IRAs are more popular in organizations that have more time than money; while a SIMPLE IRA can be cheaper on the P&L statement than a 401(k), it often comes at the cost of inefficient staff and payroll processing time.
In turn, more robust ERISA retirement plans such as a 401(k) or 403(b) can signal a more mature business (much as having a full suite of insurance benefits can do). What’s key here is whether the company has structured their plan to place the brunt of the plan’s costs on the business or on the employees. Startup plans typically have high participant costs, and it’s not unheard of for employees to face the equivalent of 2% or more in annual plan fees and costs. Conversely, it is not that expensive for even a small firm to take on the bulk of the plan fees for participants, which platforms such as Guideline offering participant fees as low as 0.15%, and slightly up-market platforms such as Vanguard passing zero fees onto participants other than fund costs.
Ultimately then, whether the plan offers a safe harbor or more complex matching formula matters less than whether there is a vesting schedule attached to contributions. While safe harbor plans don’t generally have a vesting requirement (some may apply a vesting schedule to profit sharing “bonuses” rather than regular per-pay-period matching), non-safe harbor plans can come with cliff or step vesting that takes a substantial amount or even all of the company’s matching contributions back from those employees without sufficient tenure at the firm. So what signal does that send? Well, the short answer is that the company is trying to incentivize longer tenure and retention with the company. For the longer answer, I’ll borrow a metaphor from the original founder of Stickergiant, John Fischer:
“Imagine you go on a date with someone. They offer to pay for all the meals, coffees, and whatnot, but in return, they say that if you break up with them any sooner than 3 years from now, they’re going to ask that you pay them back. Are you interested in that relationship?”
In the Signals, There’s a Story
If there’s a through-line in all of this discussion of signals and benefits, it’s this: The signals a company sends in how they talk about the opportunities to work with them, how they describe compensation, and what details they offer about their compensation, all indicate something or other. The story can be easy to make assumptions about: Low comp, no benefits, no transparency? Must be evil, right? Well maybe not. Maybe they’re a small operation. Maybe they haven’t had the time or energy to put thought into what they’re offering. Maybe they just copied and pasted another job they saw or a template they found and are just going with that because they don’t know what else to do.
What matters isn’t what the company is or isn’t offering, but what that story suggests to you. How you use that to inform your research and applications for a company, how you communicate your value proposition to that firm, and what that firm in turn is likely to do when you present yourself as an ideal candidate, negotiate, or otherwise try to find the best alignment between what they need and what you want.
I recently shared on LinkedIn that in our current recruiting cycle, a candidate failed to signal in a serious way. They submitted a template resume without relevant qualifications or information and attached a letter of recommendation about them from an academic advisor at their school instead of a cover letter addressing the specifics required in the job posting. When we rejected them, they pushed back and asked us to reconsider on their merits (which they did not have). I said it in the post and I’ll say it here: It doesn’t matter how many at-bats you have or how many swings you take if you’re 30 feet away from the plate.
Job seeking and finding the best opportunities can feel like playing the great game of numbers. Sometimes that’s exactly what it is. But you’re far more likely to find success and opportunities that you’re seeking if you align yourself as the best candidate, and align your communications and intentions with the firm to the needs they’re signaling to you. Mismatches won’t end up working together, but finding the right fit can be the best possible outcome for all parties involved.