So many college graduates are just grateful to get that first job offer that they miss one critical factor: You can negotiate your salary — even for your very first job!
Most employers actually expect to negotiate a salary offer, so they never give you their very best offer at first. That means it's your job to know what you — and this position — are worth and to ask for more money if their offer doesn't match that.
You may not think it's a big deal — how much more are they really going to offer? — but when you consider that a salary is given to you every single year and that any raise you get is on top of that, if you even negotiate $5,000 more in your salary, that's $5,000 every year. That's $10,000 if you stay for two years and $20,000 if you stay for four years. And, any raise you get starts from $5,000 higher.
And these numbers are just in the first few years. In a study at the Grainger College of Engineering at the University of Illinois Urbana-Champaign in 2010, researchers concluded that neglecting to negotiate just $5,000 more could mean the loss of more than $600,000 over the course of a career.
You could actually buy a really nice house for $600,000. Now, when you put it that way, why wouldn't you ask for more money?
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Here's what a lot of college grads don't know about their first job offer
How to negotiate the salary for your first job offer
Some recent grads might say — well, what will they think if I ask for more money? Could it jeopardize the offer if I ask for more?
The answer is absolutely not. No one is going to take away an offer just because you asked for more. (Remember, they assume you will ask for more.) And, if anything, they will think: Here is a person who knows their worth. And they're not afraid to ask for it.
I don't know about you, but that is the kind of person I want on my team. Because if I hire them, they are going to be willing to ask for more for our team and our company. So, when you put it that way, again, why wouldn't you ask for more? You're actually likely to impress, not offend, the hiring manager by asking for more.
Now, just because it's OK to ask for more money doesn't mean just walk in there and say, "I want a million dollars!" You have to do your research — know the typical pay range for this position.
"Do plenty of research on the current job market," said Joseph DiNiso, a senior computer engineering student at Virginia Tech who will be working at Microsoft as a software engineer after graduation.
Students should go into a salary negotiation "prepared with a desired salary," DiNiso said, based on the starting salary in your field. And, although "salaries will vary greatly, this number will give you a ballpark estimate of what you should be making and help you determine your salary goals."
So, what you need to know is not only the typical starting salary for this type of job but the salary range. Don't just settle for the bottom entry-point.
The team at Handshake, a job network for college students, suggests checking on the Bureau of Labor Statistics website and searching for your specific job title to gauge a typical pay range, which will vary by location. (Jobs in New York City, for example, typically pay more than those in more suburban or rural areas just because the cost of living is higher.)
David Paykin, who has amassed over 1.7 million followers on TikTok and has huge followings on other social media, has helped many college students, recent graduates and young professionals in their job search. He suggests doing research across several sites including PayScale, SalaryList, Salary.com, Levels.fyi, Indeed, Glassdoor and other sites to really get a sense of the salary range.
One of the most important things when it comes to applying for jobs and negotiating a salary is to have confidence. Believe in your experience, skills and abilities. Confidence is something many of us struggle with, but it has no place at the negotiating table. If you don't stand up and say – hey, I'm worth it! Who will?
And, what's more, think about that hiring manager on the other side of the table. Do they want to hire someone who is unsure of themselves?
No. They want someone on their team who knows what they're doing and is confident in the job they are doing. So, if you struggle with confidence, that is totally understandable, but check it at the door when you're negotiating for your career.
Rachel Castellino, senior statistics and data science student at California Polytechnic State University (San Luis Obispo) and incoming data scientist at Meta said one good way to build confidence is by "talking to people who are higher up in industry and to people who have a similar background as you; for me it was women of color, to get advice about how to negotiate."
It's hard with your first job offer to not just jump up and down with excitement. But you have to be patient and let the interview and negotiation process occur at a pace that is comfortable for the hiring manager. Remember that you are asking them to give you money (a lot of it) every single year and you actually have no idea what they have on their plate right now besides negotiating with you so stay cool. Speak slowly. Ask thoughtful questions and answer thoughtfully and thoroughly.
And you should wait for the hiring manager to bring up compensation. Don't expect this to happen on the first — or maybe even the second — meeting. But, whenever it is, you have to be ready for it.
Everyone needs to know what the salary range is for the job they are applying for — otherwise, they may wind up getting too low an offer. This is especially crucial for women when you consider that women are paid 83 cents on the dollar for every dollar earned by men, according to the Institute for Women's Policy Research.
"One reason for the lower wage is because women tend not to negotiate," said Cheryl Minnick, career success director at the University of Montana. However, "it is critical to know your professional worth, defend your value, and negotiate your first salary, and every salary thereafter."
So, it's important to not only know the salary range for a job but also to be clear about what you bring to the table — why you are more qualified and will be a bigger asset to the company than any of the other applicants.
Once you are armed with the starting salary and typical range, you have to be prepared for how you would negotiate.
Paykin has provided a variety of free resources available to the public on his website davidpaykin | Beacons mobile website such as his Interview Guide, Resume Template, Networking Templates, Cover Letter Template and Career Cheat Codes.
Within his interview guide, Paykin provides many tips for all kinds of scenarios one might encounter in an interview situation. For example, if you are pushed to give a number you would like for a salary he suggests to "multiply the bottom of the range by 1.2 to give yourself cushion in case you encounter a company that is trying to give you the low end of the range." This is because "if they do give you the low end of the range, that cushion will cause you to be paid more towards the middle of the range which is significant when looking over the course of your career."
In the guide, he gives an example: "Let's say that your research shows the range to be somewhere between $50,000 to $75,000." If this was so, then the salary you would provide to the recruiter would be $50,000*1.2 which would be "$61,000 for the bottom of the range and $77,000 for the top of the range."
That way, even if you get the bottom of your range, it's still $11,000 more than you would have gotten if you left it at the range you found online. And again, do the math there because your salary is every year. So, that's $11,000 in one year, $22,000 in two years and $44,000 in four years. You can get a really nice brand-new car for that amount of money.
So, once again: Why wouldn't you ask for more?
The worst that happens is they say no. The best that happens is you get a nice extra chunk of change every single year.
And, when you're negotiating for a full-time staff position, it's generally more than just your salary.
"Benefits are as important as researching and negotiating your first job offer," Minnick said.
"Medical benefits can be priceless especially if they include dental, wellness, vision, pharmacy, paid-time off (PTO), and employee assistance programs," Minnick said.
There may be other benefits that add to your compensation package such as a signing bonus, annual bonus, paid time off, 401(k) matching, compensation for relocation expenses, free or discounted child care, parking and tuition reimbursement, just to name a few.
So, it's always important to consider the whole package — salary plus benefits — when making your decision. You might find a job with a lower salary, but when you factor in the benefits, it's worth more.
Remember: It never hurts to ask.
"New grads (and the rest of us) are often worried that if we negotiate, we will seem greedy or ungrateful —that the negotiation won't succeed, or the offer may be even taken away," said Kristin Brennan, executive director of Career Exploration and Development at Bowdoin College and Career Coach at Harvard Business School. But "if you approach the conversation well-informed, respectfully and thoughtfully, that shouldn't be a concern."
Glassdoor also has a great piece of advice: Never apologize for asking for more.
"Negotiating is uncomfortable, and our natural tendency is to try to smooth the edges on a difficult conversation," Glassdoor's career advice team advises in their blog on negotiation secrets. "Saying 'sorry' could signal to the recruiter or hiring manager that you might be willing to back down, and that could be expensive."
And again, when you think about it from the hiring manager's perspective, would they want to hire someone who backs down? No.
Paykin also provides a list of ways of how to bring up tough conversations such as salary negotiation in his interview guide. One of the ways he suggests is to say something along the lines of, "Before discussing compensation, I would like to learn more about this role and what it entails. I have researched this company extensively and am certain that if we are a good fit, we'll come to an agreement on a fair and competitive salary."
I don't know about you, but that sounds like someone I'd want on my team.
You are negotiating for your future — your salary will dictate all kinds of things from where you live to what you can afford to buy and how much you save. So, don't just wing it. Practice, practice, practice.
So, grab a roommate, friend, family member, career counselor or other advisor and ask them to role-play some different negotiation scenarios.
This will help improve your ability to be "objective, persuasive and strategic," said the National Association of Colleges and Employers. And, ask them for feedback to help you improve both what you are saying — and your body language. Sometimes, especially when we're nervous, we don't realize what our body is doing. You may be fidgeting, toe-tapping or sending some other signal that you are uncomfortable. If you get that feedback and you've rehearsed, it will help you be more relaxed and natural.
And you should also go in with a bulleted list of talking points — and your accomplishments.
Brennan suggests keeping "a running journal of your projects, what you've learned, what you've contributed" as well as "a folder where you store praise from bosses and colleagues."
"Not only is that folder a great place to go when you could use a boost of self-confidence, but themes can emerge about your performance," she said, that you could then use when negotiating a raise — or the salary for your next job.
Of course, there's always the possibility that you get an offer for a job you love, but the salary isn't where you want it to be.
In this scenario, you should "ask your potential boss whether she has any flexibility," Harvard Business School Professor Deepak Malhotra writes in the Harvard Business Review. See if they are willing to go a little higher.
It's possible they may like you and think you deserve it but for whatever reason are unable to give you any more, Malhotra said. So, this is where you look to that overall compensation package and see if they are willing to be flexible on anything else — start date, job title, time off, bonus, etc.
And, of course, throughout the process, but especially when you are asking for more, be sure to convey "how excited you are about the opportunity itself," Brennan said. That way, the company has "the motivation to hang in there with you and find an arrangement that will work better for you, if one can be found."
It's good to be specific about what you like about the company — this shows not only that you have done your homework but that you are a good fit in the company culture. And connect the dots: Be sure to discuss what you would bring to the table and why you would be an asset to the team and the company.
″College Money 101″ is a guide written by college students to help the class of 2022 learn about big money issues they will face in life — from student loans to budgeting and getting their first apartment — and make smart money decisions. And, even if you're still in school, you can start using this guide right now so you are financially savvy when you graduate and start your adult life on a great financial track. Allison Martin is a three-term intern with CNBC's product and technology team. She is a senior at Virginia Commonwealth University, pursuing a dual degree program in computer science with a concentration in data science and psychology with a double minor in actuarial science and mathematics. The guide is edited by Cindy Perman.
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