How to Maximize Your Starting Salary
Get a Better Offer Than What's Currently on the Table
An employee's starting salary is the fixed amount of money that an employer is willing to pay a new employee to perform a particular job. Starting salary is dependent on a number of factors, but it is usually determined by:
- Market pay rates for people who are doing similar work
- Market pay rates in similar industries
- The pay ranges in the region in which the job is located
- The experience of the individual to whom you are making a job offer
- The education of the individual to whom you are making a job offer
- Pay rates and salary ranges established by an individual employer for current employees
- The availability of potential employees to perform a specific job in the employer's region and location
Starting salary is raised when an examination of these factors indicates the need for a change. For example, the starting salary of computer science majors who are hired into development positions increases regularly. Employers who hire employees in software development, mobile development, and other related fields can expect to research starting salaries annually.
Other jobs are more predictable. For example, the pay for an HR Assistant in the Midwest has held steady at $35 to 40,000 for a number of years.
Get the Most Out of Your Starting Salary
Everyone wants to earn as much as possible for a particular job. You can do a few things to ensure that your salary is as high as possible. Remember, most raises, including promotional raises, are based on a percentage of your current salary. So, a higher salary today means a higher salary tomorrow.
Do your research. Before you even apply for a job, do some research into what a reasonable salary is for such a position. Don't show up with shrugged shoulders and no idea. This approach prevents you from making an unreasonable salary demand.
Being unreasonable can eliminate you from consideration. Additionally, if you don't do your research, you may accept a lot less money than they would have been willing to pay you.
Negotiate. If they say, “We'd like to offer you the position of HR Assistant at $35,000 a year,” you can just say, “okay,” but you'll likely lose out — not just for this position, but for raises in the future, too.
Now, some managers (and some companies) don't negotiate salary — it's a one and done offer. However, many rational managers are not offended by a salary negotiation. So, take that same $35,000 a year offer and ask for $38,500. Asking for $45,000 is ridiculous, but asking for 5 to 10 percent more is normal and appropriate. If they say no, they say no. Then, you can make your decision.
Be prepared to demonstrate your skills. Most jobs have a list of critical skills that the employer is seeking. The new hire must be capable of doing all of these things. Usually, an employer also has a list of nice to have skills.
If you have any of these nice-to-haves, make sure that you bring them up when you're negotiating salary. For instance, do you speak another language? Can you do statistical analysis? Do you have a certificate in an additional programming language? Depending on the job, these extras may well bump your starting salary up.
Keep other perks in mind. Sure, you want a high starting salary, but is there something else that you value more? Some people valuable flexibility, or extra vacation, or the option of telecommuting more than a high salary.
Some companies may allow for the negotiation of free parking, subsidized bus passes or a gym membership. These perks don't put cash in your wallet, but they keep cash in your wallet.
If you planned to buy a gym membership anyway, a freebie from the company is like a little raise. Tuition reimbursement is another huge perk that not only gets you free schooling but makes you qualified for the next bump up the career ladder.
For Managers Only
The key to starting salary is to keep your compensation competitive so that you attract and retain the most qualified employees who fit your culture. You can try to save money by skimping on starting salary, but it will hurt you in the long run. You want the best people, and the best people are worth more.