Negotiating Your First Salary, By MoneyGeek Team
Last Updated: 9/13/2021
Talk about an uneven playing field: Every year, freshly minted college grads are unleashed on the job market – with little work experience and no expertise in negotiating pay packages. These newbies go up against corporate recruiters and hiring managers who have been playing the game for decades. But you can level the playing field with a few simple but powerful strategies.
First, do your homework. Learning about salary ranges in your field will help you avoid the common pitfalls that trap rookie negotiators. Second, prepare yourself to negotiate. Scary as that might sound, there’s no need for frantic haggling. A few polite questions can go a long way toward beefing up your pay package. Read on to find tips on how to score a sweet deal in your first salary negotiation.
The Negotiation Process
1. The Resume
This document is your first chance to make a strong impression on an employer. The resume offers a quick summary of your academic achievements and professional skills. Keep in mind that hiring managers are likely to devote only a minute or two to your resume, so one page is the limit. Make sure every word is spelled correctly. It’s OK to boast about your accomplishments but never lie. Emphasize your skills in leadership, communication, teamwork and problem-solving.
2. The First Interview
This might be an informal interview over the phone or by Skype to vet whether it’s worth doing a formal in-person interview. You’ll talk about your work history and educational background, but it’s unlikely that salary will be discussed. It’s possible that an employer will ask how much you expect to make. Career coaches say that you don’t want to be the first to name a number, especially not this early. Deflect by saying something like, “I’d need to know more about what the job entails before I answer that question.”
3. The Formal Interview
This is the time to let your passion, potential and professionalism shine. Don’t be the first to talk about money. Instead, let the employer broach the subject. When an interviewer talks about money and asks how much you expect to make, avoid giving a precise figure. However, do your homework so that if an interviewer presses you, you can give a realistic figure or range. Salaries vary widely by major, field, and size of company. Still, it’s not time to negotiate yet. Be cautious about making ambitious demands that might cost you an offer.
4. The Offer
Congratulations. You’ve got an offer. Now you must engage in the stomach-churning task of asking for more. First things first: Thank the employer for the offer. Next: Graciously say you’d like to ask a few questions to help you understand the full value of the offer. Consider bonuses, health benefits, retirement plans, vacation time and other perks. Make sure the employer lays out the worth of these benefits.
Don’t be shy about bargaining, negotiation experts say, but do it the right way. Be polite, professional and low-key in your negotiations. Confidence is good. Arrogance is bad. Showing too much ego can cause an employer to yank a job offer. If the salary seems low, offer examples from your work history and education that highlight why you’re worth more. If salary surveys support your position, cite them as evidence. If there’s no room to negotiate on base pay, ask if the employer can be more flexible with vacation time, flexible work arrangements and other benefits.
If the pay is less than you’d like but the employer offers a generous package of perks, perhaps you should accept. However, set the stage for a raise by asking for an early performance review, or by indicating that you’d like to revisit your salary in six months or a year. If the offer just isn’t enough, by all means, turn it down. But do so in an emotionless way that doesn’t burn bridges.
A Few Words of Advice
“If the offer is x and you’re trying to get to y, you need to identify why you’re worth it.”
“We’ve had students double their salary by taking an offer in Silicon Valley – but I like to say they just quadrupled their living expenses.”
“You’ll never know unless you ask. Use a level head, non-ego-driven voice and ask, ‘Is the salary negotiable? Too many people just look at salary. Does the employer pay for parking? Do they pay for lunch?”
Know What You Want to Negotiate
Savvy negotiators know preparation is crucial. So do your homework before the negotiation. Start by determining how much money you realistically can command. Find the salary range for entry-level positions in your field. Michigan State University compiles starting salary stats that can help you set a benchmark. The National Association of Colleges and Employers also publishes a starting salary survey. Other sources of salary information include:
- Bureau of Labor Statistics’ Occupational Outlook Handbook
To get a sense of demand for workers in your field, talk to your school’s career counselors. Fields such as engineering, computer science, and accounting tend to offer high starting salaries. Also, consider the cost of living in the area where the job is located. San Francisco and New York are far pricier places to live than Detroit and Indianapolis, so factor that into your calculation. MoneyGeek’s cost-of-living calculator can help you compare up to four cities at a time. In general, the more expensive the area, the more employers are willing to pay to attract talent. Finally, consider what’s important to you. If salary is your main concern, focus on the companies and job descriptions that promise generous paychecks. If work-life balance is a priority, consider sacrificing some pay for perks such as extra vacation time, the flexibility to work from home one or two days a week or something else.
BE READY TO ANSWER THESE QUESTIONS
- How much do you expect to make?
- Are you considering any other offers?
- How long do you expect to stay in this job?
- Is there any reason you wouldn’t be able to accept this offer?
- What other compensation besides base salary is important to you?
Overcome Challenges With the Right Answers
Employer: “How much do you hope to make in your first job
You: That’s a fair question. Can you tell me what the salary range is for the position?
Employer: “You don’t have enough experience to justify that salary.”
You: During my internships and classwork, I gained valuable experience that was directly related to this position. In addition, I possess technical skills that I know are in demand in today’s job market.
Employer: “Don’t get too focused on the salary alone. We also offer generous health benefits, retirement contributions, and paid time off.”
You: I appreciate that. Please allow me some time to study the offer.
Employer: “That’s as much as I can pay you. My company’s salary schedule simply doesn’t allow me to go any higher.”
You: I appreciate your candor about your company’s guidelines. Is it possible that I could be eligible for a performance review in six months rather than a year? Are there other areas we could talk about, such as time off, work hours, tuition reimbursement, professional dues, or other non-salary items?
Employer: “You’re asking for more than I’m paying experienced people in the same position.”
You: I’m surprised to hear that because I have done some research that shows the range for professionals with my experience is x to y, so I believe I’m asking for a reasonable amount for someone with my education and skills.
Invest Early: The Importance of Internships
Since the Great Recession, employers have run especially lean. Most aren’t keen to teach you everything you need to know to do the job – they much prefer to hire a worker who has a bit of experience and can get to work with minimal direction. Given that reality, internships can be a valuable foot in the door – and a precious negotiating tool. By pointing to on-the-job experience you gained in an internship, you can build your case for a heftier pay package. Look for internships that will give you real-world experience. And while you’re interning, take the opportunity to gather salary intelligence from full-time workers. Find a polite way to ask them about compensation, perks, and negotiating tactics.
How Much is an Internship Worth?
STARTING SALARY OFFERS AND PREVIOUS INTERNSHIP EXPERIENCE
|Unpaid internship with federal government||$40,000|
|Paid internship with federal government||$52,852|
|Paid internship with nonprofit||$35,393|
|Paid internship with for-profit company||$35,393|
Think Outside the Box
Salary is the most obvious part of any compensation package, but it’s not the only thing that can affect your financial life. Most employers offer a variety of benefits and perks that can fatten your total compensation. When weighing two offers, be sure to look beyond just the salary and include the value of extras. Among the other things you can negotiate:
- Annual bonus
Ask your employer to explain the bonus. How much can you expect to receive? How often is it paid? How is it calculated? How likely are you to receive a bonus?
If you take a sales job, commissions likely will make up a big chunk of your salary. Try to negotiate a more generous commission, and ask your employer if you can collect a larger salary in your first months on the job, when commissions are likely to be lean.
Company policy might call for you to receive only one week off your first year, but employers often are willing to sweeten the pot.
Want to work from home on occasion, or prefer to arrive early and leave early? Ask for flexible working arrangements.
- Training costs
Asking for more vacation might make you seem like a slacker, but requesting employer-paid tuition or money to attend professional conferences is a sure way to seem ambitious.
- Other expenses
Some employers reimburse for parking, commuting costs, gym memberships, and other expenses.
When is Negotiation Inappropriate?
Sometimes, there’s no need to negotiate. If, for instance, the initial offer is so generous that asking for more would seem greedy, just accept. Knowledge of the job market and of yourself are crucial to making the right play. By definition, job seekers who lack leverage don’t have much room to negotiate. If you don’t have experience through internships, or if your grades are marginal, or if you’re joining a cash-strapped nonprofit organization, or if you’re trying to break into an industry where applicants far outnumber job openings, you might be wise to just take the job rather than risk alienating an employer. And in some types of jobs, such as government positions and jobs covered by union contracts, pay grades are so stringent that attempts to negotiate are unlikely to yield much improvement in the offer.
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