Human Resources News & Insights

They’re starting their 1st job — what you need to tell them

People who are right out of school need a different type of orientation than someone who’s walking in the door with 10 years’ experience elsewhere. Specifically, the rookies need help with three major employment issues.

Health insurance
Someone who’s never been sick – or never had to pay the bills for being sick – probably has little understanding of what’s involved with health insurance, much less the definition of “deductible” or “co-pay.” 

Take a little extra time to explain your organization’s plan, if you have one, and health insurance in general. No, it’s not your responsibility to make sure they don’t make a mistake. Yes, it’ll make you a better person. 

Taxes
For most new workers, taxes represent something their parents complain about or some mysterious disappearance of part of their paycheck from last year’s summertime job. Sit with them and go over the responsibilities and realities of filling out IRS Form W-4 and deductions for Social Security, Medicare and state and local taxes. 

And if you do a good job of explaining, they’ll be complaining like their parents in no time at all. 

Retirement
If you come across a 23-year-old who’s given retirement a lot of thought, you’re dealing with either (a) the smartest person in the world or (b) the scariest. Most people who are taking on a first job need a primer on 401(k)s and other types of retirement plans – how they work, who pays for them, and the expected payoff. 

What seems to work best is the use of projections. Show newbies what can happen with a regular contribution to a retirement plan and what happens when they don’t contribute. It’s true that most of the rookies can’t imagine the day they turn 60 and their financial needs on that day. All you can do is make them aware.

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Comments

  1. These are good. I think there are some really practical things they should be informed of as well. Like not spending the day on their cell phone talking to friends (or texting them). Not shopping on-line whenever the whim strikes them (wait for lunch or a break). How to dress for success – or at least for business. What behavior is appropriate in the work environment and what behavior is not so appropriate. This is also a time when mentoring is especially valuable.

  2. Joe Coute says:

    I agree with R.B… However, caution about giving advice regarding W-4 and retirement investments. While you may not be around when they retire, you could make your employer liable should the newbie have a beef about results. What may absolutely be in the employee’s best interest today, might be a sore point down the road. Stick to basic information, usually provided by your 401k provider and the instructions on the W-4.

  3. I have to forward this to my daughter! Just a few years ago, she was that 23 year old. As soon as she was eligible, she maxed out her 401k contribution and started contributing to a ROTH IRA as well. Do assume that they may need some things explained, but don’t assume that they are complete idiots, take the time to find out how knowledgable they are and go from there.

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