Negotiating a better package for your graduate job
Many graduate training schemes have set starting salaries but there are some jobs where you’ll need to exercise your negotiating skills. This will be a unique opportunity to position yourself as a valuable asset in the organisation and to set your level of remuneration accordingly. To achieve this, you need to establish an appropriate asking price – and it is wise to think about this early in case it should come up during your interview or even in the application.
Some graduate employers will state that the salary is ‘negotiable’ or will ask about your salary expectations, either in the application, at interview or when offering you the job. Job adverts sometimes carry salary ranges to give applicants an idea of the boundaries of the negotiation. The rest of this article explains how to prepare for and handle the negotiation.
More usually, however, salaries for entry-level and graduate jobs are fixed and there is less room for negotiation than for a more senior role where candidates may have varying levels of experience and expertise to offer the employer. It is normal for everyone starting the same graduate scheme to be paid the same. The salary will either be clearly shown on the job advert or labelled ‘competitive’, meaning it should be in line with what similar organisations offer graduates in the same location and you will be told what it is at job offer stage. If you are not given the opportunity to negotiate salary, it is generally best to accept what is offered; you probably don’t have enough experience to offer at this stage in your career to persuade the employer to change their mind, and you don’t want to start your role with the company on the wrong foot.
You might decide to try negotiating for a higher salary despite it not being initiated by the employer if you have some exceptional experience that you believe would make you a more valuable hire, but this is unlikely as a fresh graduate. If you choose to do this, be sure to leave this until you have a job offer and, if they say no, leave it there. You should also plan beforehand what you will do if they say no: do you still want to work for the company?
It’s best to leave salary discussions until the point at which you are offered the job – unless the employer asks you about it sooner. Many recruiters ask for salary expectations and details of current salary early in the process. If this is the case, you may need to spend some time researching the question of salary (see the section below) at the application stage or before the first interview. Alternatively, when asked on the application form about your current salary or salary expectations you could put either TBD (to be discussed) or NA (non-applicable), but you should still be prepared to discuss salary expectations later in the process.
- If the question of pay comes up during an interview, our article on how to answer ‘What are your salary expectations?’ gives advice on how you can approach this in a way that’s likely to lead to the best outcome for you.
Whether you are giving your salary expectations early in the recruitment process (eg on an application form), or you’re negotiating during an interview or when you have a job offer, time invested in research is always well spent. In this way, you can argue your case logically and professionally. This will require you to think carefully about your aspirations in terms of salary, balance this with your experience or training needs for your future career and consider what the company could realistically offer. Familiarise yourself with the company itself, as well as the range of salary and benefit options.
When you are going for a job, you are effectively a salesperson promoting a product and it is up to you to demonstrate that the ‘product’ is valuable, high quality and superior to anything a competitor could offer. Potential employers or ‘buyers’ are looking for the best value for their money, so will be driving the deal in the opposite direction. However, if you have positioned yourself well and made a good impression at interview, they won't want to risk losing you and will be prepared to settle at the top of the market rather than at the bottom. If you know what the employer can afford and typical salaries for the sector, you will automatically gain an advantage.
Four tips for researching salaries:
- Look at the range of packages offered for similar positions in the adverts online or in the jobs pages.
- Ask for advice from people in your professional and personal network.
- Ask a contact in the industry to advise you – or use their network to access the information.
- If you are a member of a union, it will have information on acceptable salary ranges for your profession.
You can put off a prospective employer by pitching too high or too low, so it is important to get your level right. Get a feel for the market rate by drawing information from the above sources. You will also find listings on the internet that can help you.
There are no hard and fast rules about how and when to conduct your negotiation. Every situation is different and each employer will have their own set of thresholds. Understanding the context in which your negotiation is going to take place and being sensitive to the culture of the organisation is therefore essential. Having said that, there are some practical steps you can take to position yourself sensibly.
- Be calm and assertive in your arguments.
- Be prepared to compromise.
- Ask for the agreed terms and conditions to be confirmed in writing as soon as possible if you are successful in your negotiations.
- Discuss the benefits package and negotiate for an early pay review instead, if the salary offered is less than you had hoped for. For instance, if you demonstrate your worth against certain criteria in the first six months of your employment, they will agree to a particular salary increase. Ensure that the criteria are clearly set, though, and that they are included in your contract of employment.
- Appear too eager or too laid back. Either approach can portray overconfidence or a lack of professionalism and damage your case.
- Avoid doing your research. It is a common, misguided belief that requesting a high salary will convey a greater sense of your worth. The prospective employer will naturally ask you why you think you are worth so much. If you don’t have a rational argument, you will look ill-prepared and unprofessional.
- Bluff in your negotiation and try to play off fictitious job offers against the real one you’re hoping to get. Employers generally don’t respond well to this kind of pressure, and instead of receiving a speedy offer, you’re likely to be left with nothing. However, if you do genuinely have another offer, be candid about what you are being offered (without giving away the other organisation's name).
- Seem more interested in the package than in the role you are being recruited for. Every employer knows that you will want a fair deal, but you need to demonstrate that your financial concerns are balanced by a genuine desire for the job.
Salary, benefits and incentives: a jargon buster
Discover the benefits you could receive when you start your first graduate job.
It’s not just about salary and progression; many graduate jobs also offer a range of other benefits. A number of large graduate employers also allow you to customise or ‘choose your own’ perks from a range of options. We’ve put together a guide to popular perks you might be offered at work, their true value and which to choose if your employer is flexible.
- Bonus. It's pretty obvious... bonuses are extra payments. They're often related to the company's performance, but some are awarded for individual excellence. Many companies give a Christmas bonus, which can be useful for buying presents or if you want to soak up some winter sunshine.
- Commission. If you work in sales or marketing, you may get commission. You have a basic salary and for every sale you make you get a percentage of the profit. The more you sell, the more you earn. You have more motivation, which is good for you and for the company.
- Company car. A free car from your new employer? Sounds fantastic... what's the catch? Bear in mind that there are financial implications – for example, if you use the car for personal use, you will be expected to pay income tax – and so investigate all of your obligations before accepting. Some employers will offer you a car allowance, paid with your salary, if you decide not to take a company car.
- Golden hello. A golden hello is a special bonus awarded when you join a company. Employers realise that moving and starting a new job can be expensive, so a golden hello is designed to help you settle in to your new position. You could use the money to buy new clothes for your new job, as a rental deposit on a house or flat, or for a season ticket.
- Health insurance. Private health insurance means you'll be able to have consultations, tests and operations without joining the end of an NHS waiting list. It's just like any other health insurance, but you don't have to pay for it. In some cases the insurance will cover your immediate family as well. Again, bear in mind that you will have to pay income tax on the cash value of the health insurance. There may also be 'excesses' on some forms of treatment.
- Pension plan. It may seem ridiculous to start saving for your old age when you're starting your first job, but it's not. Really. All companies must now offer some form of pension scheme and they must pay at least the minimum contribution. If you are earning more than £10,000 and are aged over 22, your employer will automatically enrol you in its pension scheme, though it is possible to opt out if you want to. Usually you put in a little money each month, your company puts some in too and the government pays back the tax you paid on it. If you decide to opt out, you are effectively rejecting an extra bit of money your employer wants to give you. But, of course, you have to make an informed decision on the best action for you at any given time.
- Mobile phone, laptop and/or other devices. Some companies provide you with communications equipment for work. This is particularly useful if your job entails lots of time out of the office or you work from home. Some are exclusively for work-related use, but your employer may cover some personal use as well.
Some other incentives you may also come across include:
- Free gym membership. This does what it says on the tin but, if this is an important part of the package for you, it is worth checking that the chosen gym will meet your needs and is in a convenient location for you. Some offices, particularly in the City, will have their own in-house gym.
- Free breakfast. Some companies advertise free breakfast when it is in fact just free fruit. Other companies do offer a legitimate version of breakfast. If you think you might rely on this, maybe check out informally with some of the employees how substantial it is!
- Subsidised café/canteen. If it doesn’t offer you free food, an employer may well subsidise the purchase of lunch, snacks and coffee by subsidising its in-house restaurant.
- Retail discounts/vouchers. A number of employers have corporate agreements with certain brands or retailers to offer you money off purchases. These could include entertainment venues, such as specific cinema chains or theme parks, too. A definite advantage if you’re a shopaholic!
- Travelcards or season ticket loan. Some employers may either subsidise or help you manage your commute on public transport. Sometimes they will offer a London Underground Travelcard or a 16-25 railcard or a season ticket; sometimes they will offer an interest-free season ticket loan, which you usually repay in instalments out of your salary each month. Obviously, these perks will not help you if you plan to drive to work!
- Cycle to work scheme. This government initiative aims to encourage more people to commute by bike. The cost of a bicycle and cycling equipment is deducted from your payslip over a number of months so you don’t pay tax or national insurance on these.
- Wellbeing initiatives. Some large companies have on-site counsellors and masseuses for their employees or offer employees a ‘wellness budget’ that they can spend on an activity that enhances their wellbeing. While a 3.00 pm shoulder rub might sound nice, this might well reflect a stressful environment or long working hours.
- Holiday-related choices. Every full-time worker and employee is entitled to 28 days’ holiday per year, but this number can include bank holidays. Many employers allow you to ‘buy’ extra holiday, sacrificing some of your holiday, and a few even give you your birthday off as an extra day of leave if it falls during the week. It was widely reported in the news that a few employees actually give you a limitless holiday allowance. However, don’t think this means you can work two weeks a month; companies tend to do this when they’re confident that you will be invested in your work enough to be sensible with your annual leave.
- Volunteering days. Some companies offer a certain number of hours or days each year as paid time off to do voluntary work. They enable you to give something back to the local community or a charity without taking up time from your holiday allowance or weekends.