Graduation season is upon us, so we invited Jim Hopkinson, author of the book “Salary Tutor: Learn The Salary Negotiation Secrets No One Ever Taught You” to share his advice on prepping recent college grads for entering the job market and mastering the art of salary negotiation.
Since the day your child was born, you’ve worried about his or her health, education, and behavior – and that will never change. With great pride (and a lot of stress), you've watched them grow up so fast, survive the rocky adolescence years, excel academically in high school, and make it into college.
Now after four years (or sometimes more), they've wrapped up a college degree, received their diploma, and are about to enter the real world. There's only one thing to say, which is: Congratulations!
So now what? Is the worrying over? Probably not.
If they're like most graduates, they're saddled with tens of thousands in student loan debt, and as they start to go on interviews, you're thinking … Just do anything to get a job! Any job! And whatever you do, don't do anything risky that might lose it, such as negotiating the salary.
If that's your way of thinking, you may be doing them more harm than good.
Five Facts you Need to Know
1. Their career advisor probably didn't teach them how to negotiate.
While their career center advisors probably spent hours talking about the font on their resume, the proper way to shake hands, and how to answer the question, “What is your greatest weakness?” they might have left out one crucial skill – what to do when asked the following question: “Soooo …. what were you thinking in terms of salary?”
Let me let you in on a secret: A career center advisor's objective is often straightforward: to help get their graduates jobs. Therefore, their primary focus is, “Did they get a job or not”? If they urge students to take a slight risk and negotiate, there's a chance some small percentage will come on too strong and lose an offer. This hurts the relationship between the college and the recruiting company, and makes the student, the advisor, and the college look bad.
However, your child will be facing risk/reward scenarios their entire life, so it’s a great time to get started. Make sure that, when appropriate, your child isn’t simply accepting a job offer straight up just to avoid any semblance of risk.
As an example, bestselling author Tim Ferriss tells the story of how his high school counselor talked him out of applying to top tier schools like Princeton University, urging him to move up his “safety schools” to be his “first choice.” Ferriss refused to do so and ultimately got into Princeton. He later realized that his advisor's performance criteria was being judged by “the number of graduates that got into their first choice school,” thus their goals weren’t in sync.
2. Most companies expect you to negotiate.
Companies negotiate every single day! In fact a study by NerdWallet and Looksharp showed that 84 percent of companies expect candidates to negotiate! (That includes your child.) When you negotiate effectively, it shows initiative, knowledge of the market, and business savvy, all qualities that make for a great employee.
3. Developing a negotiation mindset is a lifelong skill.
Learning and developing a negotiation mindset isn't just something that you can use in your first job – it's something that can be used again and again throughout your career.
Why is this important? Let me ask you this: When you look back at your entire career, how many jobs did you have? Three? Five? Maybe seven?
It's time to brace yourself because not only is job-hopping not viewed as a detriment, it's often seen as an advantage. Each time is an opportunity to develop new skills, along with a boost in salary. Become good at it, and you'll be able to see it in the bottom line.
4. Negotiation can be even tougher for women.
In her widely-publicized TED talk, "Lean In" author and Facebook COO Sheryl Sandberg quotes a study that showed fifty-seven percent of men negotiate a higher salary for their first job, while only seven percent of women do the same.
While great strides have been made with Equal Pay Day, focusing on gender equality in hiring, and steering women into more highly-paid STEM fields, it's still an ongoing issue.
5. It's going to pay off – big time.
Let's assume your son or daughter starts working at age 21 at a salary of $40,000, and earns the standard raise of three percent over their career. Annualized over their career, they'll earn $3.5 million dollars. Not too bad.
But now let's say that they learn to negotiate their salary and can get just a bit more and receive five percent raises. That increase will lead to $6.5 million dollars over their career – an increase of $2.5 million through negotiation alone.
OK. So you understand the importance and want to help. Here are three quick tips to pass along to your child:
1. Know your worth in today’s market.
An associate marketing manager in Sandpoint, Idaho ($49,388) and a software engineer in San Francisco, CA ($82,805) are not going to be looking at the same entry-level offer.
Then again, $80k won't go too far when a nice one-bedroom apartment with a view of the Golden Gate Bridge will probably cost them more than you paid for your first car. No matter where they end up, it's critical that they know what their skills are worth on the market.
2. Learn how to avoid low-ball offers on job boards and online forms.
Does your son/daughter spend all day scouring online ads and firing off resumes shotgun style?
Bad news … these days, not many jobs are landed that way (since up to 80 percent of jobs are found through networking) and it's going to kill their negotiation advantage. Negotiation doesn't start when the offer is presented, it starts early in the interview process, so it's crucial to get it right.
3. It's critical to do things the right way.
If you're afraid your son/daughter will trigger the “E” word – ENTITLED – in front of human resources when asking for more money, you might be right.
There's absolutely a right way and a wrong way to ask for more, and asking for special treatment, expecting this new job to pave the financial path out of your basement and into their first apartment could be a recipe for disaster – and a withdrawn job offer. However, if done correctly, not only will the hiring manager not be offended, they'll be impressed and set your son/daughter up on the fast track to career success.
What Parents Can Do
Find out what your child already knows about the negotiation process. What did they learn in school and how do they plan on addressing any questions around salary?
Hint, the following answers are not ideal:
- “I have no idea.”
- “I'm just going to choose a large number.”
- “I'm going to immediately accept whatever they offer.”
Encourage them to do their homework without pressuring them. Think back on how your son/daughter learns the best. Do they prefer to research online, watch videos, talk to friends, work one-on-one, or yes, maybe even hear the advice of dear old mom or dad?
Get them the help they need. Look, you spent thousands on coaching for their sports teams, their music lessons, and hiring a tutor to help them with the college entrance exams. The thinking there is that investing in the expertise of a professional will quickly get them to the knowledge needed to advance.
As a parent, the truth is, you're you’re never going to completely stop worrying about your child. But with some solid advice, you could put them on a straighter path to financial independence and make everyone worry just a bit less.
This post originally appeared in the Kuder Blog May 22, 2015.
About the Author
Jim Hopkinson, the Salary Tutor, helps ambitious students negotiate their first job offer by giving them confidence, guiding them through the hiring process, and teaching them exactly what to say. He has an online salary negotiation course targeted specifically to students, and also works 1:1 to tutor first time job-seekers how to ask for more and get paid what they’re worth.
- tips for parents
- tips for recent grads