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How Much Money?

Tony Beshara

Tip #53

So, You Want How Much Money? Oh My!

So, You Want How Much Money? Oh My!

A recent college poll found that 77% of the college graduates expect to be millionaires. Oh, my!

Salary negotiations are always difficult no matter what level of position you are seeking. Until you reach the 20 year experience level, in one particular profession, you are never going to be quite sure exactly what you are worth. Even then, studies show that money is the fourth or fifth “motivator” for professionals.

As a relatively inexperienced person, with a new degree, keep in mind that you really don’t have a lot of bargaining power. You don’t have a lot of “performance” to leverage. You are selling your “potential” as a professional based on very little experience.

If you have graduated, with an engineering degree,cum laude from MIT, you know what you are worth in the market. Even if you have a new degree in engineering or technology and decent grades from even a less than top 10 university, you have a pretty good idea of what your starting salary might be. If companies and industry have been recruiting (i.e. really hiring) from your school, you have a good bench mark for what your starting earnings might be.

But for the rest of us mortals, knowing what to ask for salary-wise, in your first job, is very difficult. After you have had a number of interviews in the particular part of the country you wish to work and in a number of different professions or industries, you are going to have a pretty good idea about what your skills and market value are.

Do lots of research. The web offers many comparative salary formulas and surveys. However, employers don’t read those things. In fact, very few people really know how the research used for these surveys is done. There is often a vast difference between what some Human Resources Manager puts down on the survey sent to him or her by the state university and what the company really pays. I have known investment banking firms to publish starting salaries when they hadn’t hired anyone in two years. So, don’t put all of your faith in the most recent survey you have read or found on the web. They can mislead you.

Whatever you do don’t go into an interview and, when asked about the salary you desire, say something stupid like, “Well, the last salary survey I read stated that I should receive $XXXX to start.” Or, something like, “The University Placement office told me I should be getting $XXXX to start.” A smart employer will tell you to go let the University Placement office hire you. When asked about salary, you have to state, “At this point, I am more concerned about the job, the company and what I am going to learn. I’m sure whoever hires me is going to make a fair offer.”

Here are some valuable tips:

  • Remember that 69% of the companies in the U.S. have less than 100 people in them. The hiring authorities, owners and managers don’t read salary surveys.
  • Benefits should be part of your consideration. But keep in mind that you are not likely to be at this job more than 2.5 to 3 years. Employers will often make a big deal about the fact that their benefits are an additional 30% of an employee’s salary earnings. That is the way a“traditionalist” and/or “boomer” might think. Of course, you need to know what the benefits are, but it is not likely that the benefits of a company are going to make a difference in which job you take.
  • The experience you are going to get in your first job is more important than the initial money you will earn. Not that you shouldn’t consider the money you will earn, but it should take a back seat to the experience you will gain, kind of company, culture of company, etc.
  • None of us has any intrinsic “worth.” No matter where we start, we still have to prove ourselves. If you are grossly overpaid or slightly underpaid both you and your employer will know it real quickly. If you are grossly overpaid and don’t perform, you will be fired. If you are underpaid and perform, the competition will come after you within two to three years or you will catch on that youare underpaidand change jobs.
  • You are going to “take home” 28% less than your gross pay.
  • Good news…The Department of Labor says that college graduate hiring is increasing 13% this year over last and will continue to increase over the next few years. Technology grads are getting the highest pay, up 4% to 6% over last year.
  • Size of company, the industry/profession they are in and location will all have a significant impact on the starting salaries. Don’t expect a bank in New York, one in St. Louis, one in Omaha, and one in Bozeman to pay the same.
  • Do your homework. No one can tell you what percentage of your decision should be made regarding money. It is a personal decision. Don’t rely on anyone but yourself.
  • Save specific salary or earnings discussion until the very end of the interviewing process.

Remember, the better you sell yourself, the better the monetary offer will be. The more and better reasons you give an employer to hire you, the more reasons he or she will give you to go to work there…and money is one of them. The outcome has to be a win/win deal for both of you. Practice, practice, practice selling yourself and interviewing well!

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