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This story is part of CNBC’s College Money Guide 2023, a series to help students and recent graduates understand their money and start their adult life off on a solid financial path.
Getting your first full-time job out of college is exciting!
It’s thrilling to know that someone wants to hire you for a professional job, that you will be getting a salary and that you are officially entering adulthood. But it’s important to not get so caught up in the “It’s an honor to get the offer” feeling and forget to advocate for yourself.
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Almost three-quarters, 73%, of employers expect candidates to negotiate salary, according to CareerBuilder. But 55% of workers don’t ask for a higher salary when they are offered a new job.
“Yes, absolutely, you should always try to negotiate your first job offer and, in fact, and every job offer,” said Alexandra Carter, a professor at Columbia Law School who teaches negotiation skills. “Employers are expecting you to negotiate.”
Employers try to get you ‘as cheap as they can’
Why is advocating for yourself important? Because what you do with your first job offer is the foundation for all your future roles. Negotiate a higher first salary and when it’s time for your next, you will be starting from a higher level. Fail to negotiate, and you’re starting behind — especially since a company’s first offer may not be its best.
“No employer is just going to offer you the most they’re willing to pay,” said Linda Babcock, professor of economics at Carnegie Mellon University and author of books such as “Women Don’t Ask: The High Cost of Avoiding Negotiation.” “They’re trying to get you as cheap as they can.
“Nothing personal — it’s just business.”
New grads often think they don’t have any leverage to negotiate their first job offer, but that’s not true.
“You have more leverage than you think,” said Carter, who is also the author of “Ask for More: 10 Questions to Negotiate Anything.” “You start by focusing on your strengths.
“Just because you’re short on experience doesn’t mean that you’re short on value,” she added “Part of career success is learning to tell the story of who you are and the kinds of problems you can solve for the company.”
3 tactics in approaching a salary negotiation
Your negotiation starts from the minute you sit down for that first interview, Carter said.
“Negotiating isn’t just about numbers; it’s also about messages,” she said. “You want to be teaching that employer how to value you and how to think about what you bring to the table from that first interaction.”
These three strategies may help:
- Research typical salaries. Go in with an understanding of what the going rate is for the job you are applying for. Companies are increasingly posting salary ranges for jobs, thanks to pay-transparency laws. But it’s also a good idea to do your own homework, using Glassdoor, Salary.com or other job sites that post salaries. It’s also a good idea to reach out to a friend or mentor in the industry to get a sense of the salary for this position. If you know someone at the company you are applying to — even better.
- Set the right tone. You want to come off as confident and friendly in your request for higher pay. Carter says think of that person you are negotiating with as a partner, not an adversary. “I have a saying in negotiation: ‘I never request — I recruit,'” Carter said. “I want to pull that person around to my side of the table so that we are working on a common objective. In this case, it’s ‘Here’s what I’m bringing to the table and here’s what the company is bringing to the table and how can we make this package something that excites us both.'”
- Emphasize your strengths. You may not have a ton of work experience but what you do have is a new degree. And while you might not think of being fresh out of college as an advantage — it is. It means you have been trained on the latest technology and developments in your field, so you could bring skills and competencies to the company that its existing employees don’t have.
How to answer: ‘What is your salary range?’
Everyone tries not to be the first to throw out a number, but then there it is: The recruiter or interviewer asks what salary range you’re looking for. How do you answer that?
“I’d say, ‘Thank you for asking. Tell me more how the company is seeing that range and how a candidate fits within that,'” Carter explained. “In other words, I want to understand first, before I put out a number, the way that the company is valuing various factors.”
For example, if they say $100,000 is for people with two years of experience and $50,000 is for people who are right out of college — that gives you your answer right there, Carter said.
If they say that it’s really a case-by-case basis, then you go back to that advice to focus on your strengths.
“If I’m able to tell a story about how my qualifications, my education, my experiences are going to make a substantial impact right away, then I can go in right away and negotiate for more,” Carter said. “I would not put out a number until I thoroughly understood how the company is viewing that range.”
How to ask: ‘How much does the job pay?’
Yes, you can ask them what the salary range is for this position, but timing is everything. Don’t just blurt out: “How much does this job pay?” Instead, wait until after you’ve asked a lot of information about the role and responsibilities and already talked about what you bring to the table.
Then, Carter suggests saying: “I’ve enjoyed these conversations, and I’d just love to make sure that we are aligned on compensation. Can you tell me more about how the company is thinking about compensation for this role?”
What to do if a job offer is too low
OK. So, now they’ve given you an offer — but it’s not enough. What can you do?
There are some positions where the entry-level salaries are standardized and you may not have that much wiggle room, said Gorick Ng, a Harvard career advisor and author of “The Unspoken Rules.” That could be likely if you get accepted to a leadership development program at a Fortune 500 company or a large bank or accounting or consulting firm. Smaller, less structured organizations will have less rigidity in their salary bands, so you might be able to negotiate for more. It’s important to read the situation.
It can help if you have a competing offer (which is why it’s important to apply to a lot of jobs not just a few dream jobs) or if you have a specialized skill in a hot job market.
“I’ve seen new grads with a specific engineering skill set who’ve gotten multiple job offers — all from companies that are intensely competing against each other — who had the ‘leverage’ to ask for more,” Ng said. So, ask yourself: “Am I a dime a dozen in this role or industry? Or, are there not many graduates with my specific skillset or who are willing to do my specific job?”
“If you’ve done the research to make sure that your number is justifiable based on some metric — your qualifications, or what you’ve seen from other job postings, then you are well within your right to counter even if it’s a significant move,” Carter said.
What you shouldn’t do is bring up outside factors like inflation or personal expenses such as student debt.
“Companies don’t set salaries on what’s convenient for employees,” Carter said. “It’s much more about the value you can provide to the company,” as well as the market rate for that position.
If they are firm in their final offer but it’s low, you can ask about what other benefits there are. Maybe they have a free gym, a travel or training budget or a stipend for home-office equipment if the job is full or partially remote.
“I would not come back after a best and final and ask for $50,000 more,” Carter said. “Come back if you felt strongly — one incremental thing that would make that job right for you.
“Express your appreciation and ask rather than demand.”
Negotiating doesn’t always come easy to everyone but it’s important to do it for your financial future — and for your future at the company.
“When you negotiate on behalf of yourself, you’re showing the company what kind of negotiator you’re going to be on their behalf,” Carter said. “You’re setting yourself up as a leader and someone to be valued from minute one.”
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