Does Size REALLY Matter When It Comes to Your First Salary Offer?

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?

 

About the author…

Ronnie Ann, founder of Work Coach Cafe, bases her real-world advice on her many years as an organizational consultant where she helped interview and hire people, added to a certificate from NYU in Career Planning & Development and her own adventures as a serial job seeker. She can also be found on her new blog, and on Google+.

Comments

  1. the very first full-time job i had, they offered me a pay that i felt was too low. i nervously negotiated with the boss over the phone, explaining why i felt they should revise the offer and he did, though not by much. it wasn’t what i wanted but i thought it’s probably big of him to have done so since i have not proved my potential and i accepted the offer.

    looking back, i have settled for less for convenience. i believe now that the next job i go to (if i ever quit my current one) should be something i am excited about, gives me a reasonable salary (or good perks in lieu of an amount you prefer) and offers potential for me to grow.

    i would say don’t settle for a pay you don’t want unless you really, really want the job. but then again are you sure you want it? i’ve changed jobs many times because it did not turn out to be what i expected. perhaps i gave up too quickly, but if you are someone who wants to stay at least two years in a job, there should be something there that makes you want to stay. if you don’t like the job or the people, at least the money helps you in other ways.

    that said, it’s not all about the money. you should choose a job based on a balance of many factors, money being one of the important ones, i think.

  2. Thanks sulz! Appreciate the words of wisdom from your own job experiences. Nothing like the real world, huh?

    I like your formula “something i am excited about, gives me a reasonable salary (or good perks in lieu of an amount you prefer) and offers potential for me to grow. ”

    Meanwhile, hope the current job works out for you for a long time. And if (ok let’s be honest…when ;-) ) things get a little dull, remember that you can come up with projects you’d like to take on that help the company and also open up the horizon for you.

    Thanks again for the great comment. Always enjoy hearing your “voice”.

    ~ Ronnie Ann

  3. In any public sector environment (schools, colleges, universities, state/provincial governments, federal governments) or even just really big organizations (banks etc), future salary raises are often based on what your original salary was. So it makes sense to get that original salary as high as possible.

    Here’s my question about salary situations. In two job interviews, the interviewer asked me about my salary expectations near the end of the interview. I provided a range that I thought was reasonably based on salary surveys conducted by professional associations. Is that the right move to take?

    The other situation I’ve encountered is cases where job postings instruct applicants to “clearly state salary expectations” in their cover letter. How should one respond to that?

  4. Hi Bruce!

    To your first point…agreed. Unless you’re using a position to enhance your skills to help get you to a new or slightly different career path. Then even a lateral or lower salary may result in more later on. But you absolutely can get hog-tied by coming in too low if you want to move up where you are!

    As for your question…I’m not an expert in this. I always come up with a range for myself using sites like salary.com to investigate similar positions in my area. Plus I nose around to find out what pay ranges look like in the particular company.

    I guess it also depends on how flexible you are and how comfortable you are starting the negotiation (in effect). Whether in person or in writing, I usually say that I’d prefer something in this range ____ or close to ____ (naming a specific amount toward the top of my range), but if I do the latter I then say something like “But I’m flexible. I’m more interested in finding the right job which is why I’m so interested in this one.” And then with a smile something like “But a great salary would make me very happy too.”

    Again, things like this depend on your personality and the way the interview went. So please everyone out there….don’t use my words! Find a way that works for YOU. For most, ranges work better than giving a specific number. Maybe adding with a small smile – “…the upper end of that range would be really nice, of course. ”

    Hope that helps. Good luck!

    ~ Ronnie Ann

  5. My question is, if you’re asked to give your desired salary range or salary expectations in a cover letter, will that box you in? For the job I just interviewed for that’s what I had to do, I have an idea of what a position like that should pay from the many many descriptions that I’ve read that actually provided some idea of the salary that will be paid. So I know that what I put down was about right. However, being that I have no idea what the organization intends to pay, what if it was more than what I put down? What if I accept what’s been offered and find that someone else in the same position started at more than me? Can they really do that? I’m just starting out so I didn’t really think I had any negotiating power whatsoever, but now that I think of it, I won’t be prepared if it comes down to that. And is every offer negotiable?

  6. Hi again Mallory!

    Good questions. Read the post again and you will see at your stage none of this is all that critical – no matter what you read from pundits who try to scare folks with black or white pronouncements.

    You can always try to negotiate when you get the offer – no matter what you said in the cover letter. Best to investigate first, of course, as you did – but rarely does it lock you in if you can give them a good pitch for why you deserve more. And of course….if you start lower than you wished and wow them, you may be able to bargain for a bonus later on in the year if not a raise. (These are things they might not tell you, but it happens in many places quietly.)

    Also best not to worry what everyone else is making since you don’t know all the circumstances. Unless it is waaaaay off, there are ways you can stand up for yourself once you show how invaluable you are – or move on to another company who will pay you more. (Sometimes people do that and come back if it’s the only way to get a raise. But that’s for later on. No need to WORRY now. This is just the beginning of a long career. I am living proof you can make lots of mistakes – they never really are if you learn from them – and still get yourself into good jobs later. ;-) )

    To make up an old saying: If you examine every rock, you are going to find worms.

    Enjoy the rest of the evening. I’m taking a break until tomorrow, making a nice dinner and watching some fun DVDs. Feel free to join me. ;-)

    ~ Ronnie Ann

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