I’ve watched new graduates trying to figure out how to negotiate salary requirements for their very first job after graduation. For many new grads dealing with the size of an offer (did I ask for too much? did I ask for too little? how much salary can I ask for? should I even try to negotiate salary?) is a painful process indeed – cruelly coming at the end of one of the most painful processes of all, the dreaded job search!
Here you are bright-eyed and bushy-tailed at the beginning of your career with (hopefully) a loooong career ahead of yourself. I’m sure salary negotiation is not what you want to think about. “How much does salary matter?’ gets mixed up with the larger question “What am I worth?” How aggressively should you negotiate your salary offer when what you really want is a chance to show how good you are? Then again, there are those pesky loans to pay off and the small matter of rent and food.
So with all that in mind, how should you approach salary negotiations in your first job??
When Suze Orman Says You Should NOT Negotiate Salary
I was listening to the Suze Orman show tonight, and I heard her say that how much you get paid for your first salary really doesn’t matter. What matters, she stressed, is working your butt off that first year and showing your boss how totally valuable you are. THEN…with something concrete to negotiate with (backing up your undeniable worth to the company)…you can ask for a real salary!
Her take on this is that you shouldn’t even worry about negotiating since the amount of your first salary isn’t what matters – what really matters is busting your butt and becoming invaluable to your new employer. That’s a lot more tangible in the world of dollars and cents than some good grades and a strong internship or two. (Although those things sure help get you in the door.) And once you have that solid experience (and evidence) under your belt, you have something valuable to negotiate with that speaks a language your employer really understands.
Now that said…I have to tell you my initial reaction was: “Is this fairy tale land? What the heck is she telling people!!” Work hard and you’ll get magically rewarded? According to the e-mails I get, employers as a group are not known for nobly rewarding hard work – especially if they can get it for less. And her words were especially surprising in light of what Ms. Orman wrote on Yahoo! Finance not too long ago in her article The Money Talk, where she emphasized the importance of researching salary and standing up for what you deserve. Is she contradicting herself?
In Suze’s words:
If you’re negotiating a salary for a new job, don’t wait for the offer to form your strategy. Go out and research what the going rate is for your field and for someone with your experience. Websites like Salary.com make it easy to get good salary info.
If you’ve done your homework and the offer comes in low, you have the facts to back you up. Don’t settle. Don’t think you’re asking for too much. Trust me, the truth is that women tend to ask for too little! Just hold your ground-politely but firmly. Make it clear you are very interested in the job and the company but you need to be somewhere that values (there’s that word again!) your talent and experience.
Good advice. Of course, that excerpt comes from an article about salaries in general. Tonight she was suggesting that NEW GRADUATES going for their first jobs shouldn’t focus on salary. So it appears she sees your first job in a different light from the rest of your career – basically new grads should find the job they want in the career they want, get their foot in the door (I guess both feet) and then go for it 100%.
Libra that I am, I see at least two ways of looking at this:
#1: First job initial salary offer negotiation: SIZE MATTERS
On one hand, I’ve seen many cases where all subsequent raises are based on that initial salary. So if you come in low, no matter how hard you work, you’ve boxed yourself into a corner. The line you get is: “I’d love to give you a much bigger increase – lord knows you deserve it – but no one got more than 10%. If we do better for you, it will hurt morale.”
Oh crap…I wouldn’t want to hurt morale – even if I’ve been busting my butt taking on (and acing) extra projects and am making less than the guy in the cubicle next to me who takes a 2-hour lunch every day. Don’t get me wrong, morale is important…but I’ve also seen it used to manipulate employees. (Rather than hurting morale, a well-placed raise could be used to motivate others, showing hard work gets rewarded. But too often I’ve seen the argument used the other way – and people do back down.)
And if you decide to find yourself another job so you can finally get yourself a real salary, what you may also find is the next employer using your old salary to low-ball you. It’s a lot easier to negotiate from a higher salary if you aren’t coming from the bargain basement.
Also…there’s a social psychology theory called cognitive consonance that may mean if your boss offers you a higher salary and he doesn’t want to feel like an idiot, then he’ll be looking for ways to help you prove he was right.
Plus…simply negotiating with confidence to begin with (if you do it well) may leave a powerful positive impression that gives you a step up from the git go – and it may even open up other opportunities. Those initial impressions resonate well beyond the negotiation session – both for good and bad.
On the other hand…
#2: First job initial salary offer negotiation: SIZE DOES NOT MATTER
This is Suze’s point of view…taking the long-term career approach where the experiential foundations you lay down at the very beginning are way more important than your first salary. Odds are you won’t even remember how much your first salary was 10 years from now.
Plus…if you are not one of the highly paid hot-shots, you might have a better chance of wowing your employer. Highly paid folks may be expected to out-dazzle their co-workers and in the end, not get a big raise because they are paid well already. Could be your chance to shine if you come in at a lower salary. (Note that the individual company and/or industry can play a role here too. The same actions may be viewed differently depending on where you are. Isn’t this fun?)
And of course, even if you get the “I can’t give you a big raise because of morale” argument, you can always ask for a bonus or extra days off or some other perk you would feel good about. And meanwhile you’ll be laying the foundation for not just a raise, but a real live promotion. [Although the morale argument may rear it's ugly head when the promotion comes too. A friend of mine who graduated two years ago just had that happen.]
But then again, by taking advantage of the right opportunities early on without worrying about (or getting diverted by) salary, you can build your resume (and your brand)…opening you up to more and more future possibilities. So if you focus more on building key skills and experiences at the outset of your career and keep money as a nice afterthought, later on you may be able to position yourself exactly where you’d like your career to be, more than making up for any of those early salary doldrums.
While I can definitely see pluses and minuses on each side, I gotta say that if Suze is right, it sure would help take a lot of the stress out of that first job offer. Like getting on a roller coaster, you just accept the stated amount and hop on the ride!
So what do you think? Does size matter when it comes to your first salary? What salary advice would you offer a new grad?