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Millennials: Not Negotiating Your First Job Offer Will Cost You (up to $0.5M)
Posted on 9/12/14 at 10:04 pm
Posted on 9/12/14 at 10:04 pm
quote:
Failing To Negotiate Your First Salary Could Cost You Half A Million Dollars
Yet curiously, members of Gen Y are missing a huge opportunity to increase their pay: They are not negotiating their first salaries.
In an exclusive survey of 548 millennials in the U.S., 82% said they did not negotiate their first salaries because they either didn't feel comfortable (38%) or didn't know they were allowed to do so (44%).
Since your first salary is the baseline for all future raises, the impact of starting out behind is huge. "Not negotiating your first salary in a low-wage job can amount to a sacrifice of half a million dollars over the course of your career," says Sara Laschever, a negotiating expert and the author of "Ask For It." "In a higher-wage job, that loss is magnified."
quote:
Not Negotiating Your First Job Offer Will Cost You
A person who accepts a $35,000 starting offer for an entry-level job isn’t just making $7,000 less than a colleague who negotiated a $42,000 starting salary. The person who negotiated stands to make hundreds of thousands of dollars more during her lifetime—and that’s before retirement is taken into account.
Let’s crunch some numbers: Say you start out your career making $42,000. The average annual raise for professionals is around 3% (for simplicity’s sake, we’ll assume that’s the only pay increase you get). After 10 years, you’ll be making about $54,800 per year. If you start your career with the lower salary of $35,000, you’ll be making about $45,700 after ten years. What was once a $7,000 gap is now around $9,000. Over that ten years, the higher wage would have added up to about $80,000 more in your bank account. According to personal finance expert Ramit Sethi, even a $5,000 higher starting salary can be worth $1 million over time, once factors like increased retirement, bonuses, and investment contributions are added in.
Posted on 9/12/14 at 10:19 pm to saintforlife1
this makes no sense. most people will not stay at their first job and the next job will be a heavy pay bump
Posted on 9/13/14 at 12:00 am to saintforlife1
I've read this before.
It's just really, really tough to negotiate in a shitty job market when you have no experience.
It's just really, really tough to negotiate in a shitty job market when you have no experience.
Posted on 9/13/14 at 9:28 am to saintforlife1
Yeah I really struggle with how a new grad is supposed to negotiate. I mean I get it but as an employer you are rolling the dice already. So if you have a few candidates, it would be a bit of a turn off as the person may jump ship at a simple income bump. I'd say the top 10% of new grads can likely negotiate but after that it would be pissing into the wind.
Posted on 9/13/14 at 10:28 am to saintforlife1
There are plenty of jobs that don't base salary offers off of past salaries. I started out with a very low salary straight out of school, but now 4 years later I'm making more than 3 times what my starting salary was (two job changes and two promotions later) . This study may make sense if you don't aggressively seek out the best opportunities out there for you. If you're satisfied with mediocre salary, you'll make a mediocre salary.
Posted on 9/13/14 at 10:32 am to saintforlife1
The thing this article doesn't take into account is that many large companies out there start all undergrad hires in the same division/unit out at the same exact salary. There is no negotiating for many first jobs. My first job started all first year associates at 58K regardless of school or gpa. There was no negotiating that salary. If you said no, then my company really didn't care; just move on to one of the hundred others who interviewed.
Posted on 9/13/14 at 11:46 am to saintforlife1
More made up numbers to generate clicks or sell something.
Posted on 9/13/14 at 3:26 pm to saintforlife1
quote:
The average annual raise for professionals is around 3% (for simplicity’s sake, we’ll assume that’s the only pay increase you get).
Except for many people, is just not true. Pay raises come in fits and spurts, especially in careers that have a natural career progression to higher and higher levels.
Further, as several others on here have said, many companies that hire large amounts of college grads pay them all essentially the same amount for the same job (with possible geographic adjustments). Moving from company to company tends to ensure that your salary is always around "market" - assuming you know how to negotiate for it.
It's like the NFL... you make your money on the second contract.
Posted on 9/14/14 at 8:16 am to saintforlife1
I think I'd laugh at a new grad with no experience trying to negotiate salary with me.
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