Negotiating Your First Salary

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.

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
• Salary.com
• SalaryExpert.com
• JobStar.org
• Glassdoor.com
• PayScale.com

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.

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.

Source: National Association of Colleges and Employers

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?
• Commissions
  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.
• Vacation
  Company policy might call for you to receive only one week off your first year, but employers often are willing to sweeten the pot.
• Flexibility
  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.

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.