Many students leave college unprepared to negotiate salaries
A new survey from NerdWallet shows how much entry-level hires leave on the table
If a 22-year-old college graduate gets a job offer and says yes to a $40,000 salary, she will earn $170,000 less over the course of her career than if she had negotiated a 5% bump. That’s assuming she retires at 65 and gets a 3% raise per year, on average.
The thing is, most women don’t negotiate on salary when they get a job offer. Most men don’t either, according to a survey by NerdWallet and Looksharp of 8,000 recent graduates who entered the job market in the last three years. But that same study found that out of 700 employers surveyed, three-quarters are willing to up their salary offers by 5-10% as a part of negotiations.
That’s real money being left on the table. And it’s more often left by women than men, 29% more of whom try to get higher entry-level salaries, according to the survey.
James Tarbox is the executive director of Career Services at San Diego State University. He said the university hosts several events throughout the year specifically geared toward women, acknowledging their tendency to avoid money negotiations and making clear the consequences of doing so — lower earnings, yes, but also smaller annual contributions to retirement.
While this year’s economy is looking brighter than the one into which the Class of 2014 entered, career counselors at San Diego State still hear stories about student anxiety at the thought of negotiating salary. Tarbox said that’s a reflection of the economy over the last few years.
“The economy wasn’t good and it’s rebounding, but everybody is kind of tentative about it,” Tarbox said. “Students’ biggest concern is, ‘If I counter this, will I lose this offer?’”
The NerdWallet study found the answer is almost always no. Of hiring managers surveyed, 90% said they had never taken back an entry level job offer because the candidate tried to negotiate a higher salary. Only 16% of those surveyed said an entry-level candidate would be putting his or her job at risk by trying to negotiate.
That’s good news for job-seekers, especially when paired with research from the National Association of Colleges and Employers, which shows plenty of opportunity for the class of 2015. Employers expect to hire 8.3% more new college graduates than they did last year. That’s 8.3% more students to counsel through first job offer negotiations before they become alumni. Besides focusing on women to boost their confidence and preparedness at the negotiating table, Tarbox said career services departments would do well to tailor programming toward students with disabilities.
The national unemployment rate for people with disabilities is double that of people without them. As colleges and universities attempt to reach a diverse student body with career services, Tarbox encourages them to define diversity as broadly as possible, preparing all students for salary negotiation, internships, and anything else they’ll encounter in the job market.
“The programming that you do and the services you provide need to show students that there’s a place for them,” Tarbox said.
With graduation season upon us, career services counselors have just a few more weeks to get in their final bits of advice before 2015 grads enter the world of full-time work. The NerdWallet survey data is prime parting wisdom.
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