The US, being a prosperous country always faces labor shortages. This makes all state, federal, and local statutes to recruit manpower and creatively engage them by providing attractive benefits. Even the US law states, an employee irrespective of for whom he works should get benefits from the company apart from his salary or wages. This is mainly to protect workers and their health and well-being.
Federal jobs or private jobs, each have their job profile and follow their employee benefits plans and schemes. Few benefits are mandatory and some benefits the employer will provide voluntarily. There will not be any voluntary benefits from federal jobs as they strictly follow the government norms. But in private sectors, the employer has the full right to give additional benefit as per his wish.
Benefits of Federal jobs Vs. Private jobs
People will always compare job benefits between federal jobs and private jobs. Some people are attracted by government jobs as they have more benefits comparing to private jobs. But the real fact is both the jobs have their ups and downs. Let us compare the benefits of both the sectors in detail.
Wages of federal Vs private
The federal government employee will receive a total compensation up to $130000 that includes fringe benefits but a private employee will get his total compensation up to $70000. And this amount varies according to the job profile. Here, the government employee cannot negotiate much on his wages. All pay is set according to the grades and the pay increases according to the seniority of employment. No individual performance will be recognized in the government sector.
The salary growth is exponential in the private sectors. All you need is to prove yourself. Your performance will be graded and you will be paid accordingly. Your increment depends upon your performance and this will motivate the employees to compete with others and be more creative. All they want is to grab the attention of the management towards them. The employee can sit and chat with the HR department of the company and negotiate on his pay. Employees can expect a favorable reply from the management as the management doesn’t stick on to the rules and regulations alone.
Health benefits of Federal vs. private
Health insurance and its plans are almost the same for the federal and private sectors. But the federal employees are likely to enjoy the benefits than the private sector. Since the law states that the employer who has less than 50 employees may not have health insurance, it is up to the employer to provide health insurance to his employees. But in the federal government, it is mandatory. This is why only 60% of private employees are enrolled in a health insurance plan.
Every health insurance plan comes with the choice of plans. Only 43% of private employees will get the chance of selecting the plans of their choice but in contract, 100% of federal employees can select their plan. This liberty of choosing the plan is highly enjoyed by the federal government employees, not by the private employees.
Retirement benefits of Federal vs. Private
Every employee will expect a successful retirement from his company he works for. He needs sweet farewells that will let him have extraordinary job completion satisfaction. Around 94% of the full-time federal employees will enjoy the retirement benefits while only 74% of private employees are entitled to retirement benefits. In both cases, employees need to contribute from their end to avail of the retirement benefits. The average contribution from an individual will be 5.2% of his earnings and this percentage will vary according to the job profile.
Few private companies will not expect the employee to contribute as they alone will contribute to the whole. But still If interested the private employee can also contribute which is not compulsory. The retirement amount will be higher for the employee who has contributed comparing to the one that doesn’t contribute and it is quite obvious. The average retirement age is 55 years or 30years of service. The government can choose for early retirement and still can get the same benefits but if a private employee goes for early retirement then the benefits he receives may decrease.
Pension benefits of Federal vs. Private
Pension is the main reason why people show more interest in joining government jobs. 100% of federal employees can avail of pension benefits. The private sector may or may not provide pension benefits. A very large organizations may give pensions to their employees but in small or medium organizations, the employer will decide whether to give or not. Even if they decide to give the payout will be meager while comparing to government employees.
On average, a government employee may receive $27600 as his annual pension and in contrast, the private employee may get $13100 that too if the employer wishes to. It is also stated that only 16% of private employees is getting the pension in the US. The rest of the private workers rely on 401(K) and they will not know what amount they get out of it. This is why private employees at the time of earning should invest well and should have a safer old age.
Incentives & employee referral bonus benefits of Federal vs. Private
Private sectors never fail to delight their employees with new schemes and plans that can get them more earnings apart from their salary. The real motivation will be on sales. If you bring more sales you can earn good incentives. And also recruitment is a tedious process and every HR department in the private sector finds it difficult in placing the right candidate. So it encourages its employees to refer candidates to work in the company. If people join through another employee then that employee will be eligible for an employee referral bonus.
These types of benefits cannot be found in the federal sector. Recruiting is a lengthy process where every citizen needs to pass through many examinations and should undergo a medical tests and then the concerned department will place the right candidate. Also, federal staff cannot expect attractive incentives from the government