Strategies for Young Professionals in Salary Negotiations

Salary negotiation is a key factor in getting one’s career off to the right start. In fact, the first salary discussion often sets the tone and track for future success. Research has shown that professionals who do not discuss their salary often enter the industry with a much lower salary than their counterparts who do negotiate. This is particularly true for today’s young professionals and recent graduates.

Wage disparity is an important issue that must be addressed to ensure today’s insurance professionals start their careers off on the right foot. So what is the state of compensation for young professionals and graduates? How can these individuals successfully negotiate their starting salaries?

The State of Workplace Compensation

Having experienced deteriorating wages in the midst of the recession, young professionals still find themselves earning less than their predecessors. According to the National Association of Colleges and Employers, the average starting salary for college graduates increased just 1.2 percent in 2014 – placing the median 2014 salary at nearly 16 percent lower than the average starting salary in 2002.

In addition, salaries for young professionals have grown at only half the rate of all workers in the United States since the recession. Between 2006 and 2013, median earnings for recent graduates rose only 6 percent, 7 percent lower than the earnings growth for the workforce at large. Despite recent gains, young professionals are struggling to reach the median starting salaries of their pre-recession counterparts.

Negotiation and the Wage Gap

Many young professionals do not understand the key role that salary negotiation can play in bridging the wage gap. Individuals who do not negotiate their starting salaries stand to lose hundreds of thousands of dollars over the course of their careers.

With concern over landing their first professional position, recent graduates and job seekers worry that negotiating their salary or pushing too hard will result in a potential employer rescinding the offer. As a result, young professionals are the least likely to negotiate their salaries compared to more experienced professionals.

A perceived lack of job skills and applicable experience are the top impediments to salary negotiation among recent graduates, who often believe that several years of experience is required in order to ask for a higher starting salary. By jumping on the first offer provided, they often undervalue their true market worth.

Successful Salary Negotiation

Salary negotiation has become a standard part of the employment offer process. In fact, many employers build room for negotiation into their initial offers. Yet negotiating a salary can be intimidating, especially for recent graduates and young professionals who have not done so previously.

Young professionals looking to enter the workforce or move to a new opportunity must take the time to fully understand their value to an employer. They must research to determine reasonable salary expectations for their roles. Comparing average salaries and pay scales in their area will provide a base line. A thorough self-evaluation and appraisal of the skills and experiences they are bringing to the table will allow them to build upon that base line. Young professionals must be prepared to articulate how their accomplishments and job history can translate to success in their desired roles.

Recent graduates and young professionals must avoid using their peers as benchmarks – salaries and compensations very widely depending on industry, job role and experience. They must be realistic about their salary history and experience.

Negotiations should be seen as a collaboration – a conversation between both parties. If there is little flexibility in regards to starting salary, there may be room to negotiate other portions of the total compensation package, so the key is understanding the package. What else is being included along with the base salary? What are the benefits? Is there bonus potential? Is there a flexible work option? How does the PTO policy compare with the industry standard? Negotiating for flex time, more vacation days and telecommuting options can be a great way to supplement a lower starting salary.

Preparation is key to success. By doing the necessary research and self-evaluation, young professionals can enter the salary negotiation stage from a position of strength and knowledge. It is from this position that they can negotiate an advantageous starting point upon which to build a lucrative insurance career.

Topics Talent