Dos and don’ts for graduates negotiating a starting salary

Graduates who have to negotiate their starting salary are often daunted by the prospect of telling an interviewer what they think they are worth, since they have only a university degree and usually no experience to base their salary on.

Young people who have to find work after graduating from university seldom have the experience companies desire and may therefore feel they have little power to negotiate a better starting salary.

“While it is true that having a degree, like an MBA, does not mean they will automatically be paid more, graduates are not without options,” says Nicol Mullins, master rewards specialist and president of the South African Reward Association (SARA).

Mullins made a list of the dos and don’ts for graduates who want to improve their salary outlook:

DO research salary ranges. There are various sources, formal and informal, where information can be gathered and some are more reliable than others. Sources like Google, career sites, recruiters and even ChatGPT, given the right prompt, can reveal the upper and lower salary limits to expect in the position you apply for. This knowledge can help you decide if an eventual offer is favourable or worth turning down. Your first role will probably be the most difficult role to fill.

DO consider context. Starting off at a smaller organisation may mean your package will be closer to the lower margin of your earnings range. By the same token, applying to a larger organisation could see you starting with a higher than average income. Industry and company type, a professional designation, certifications and other factors also determine your power to negotiate. Most things in life are trade-offs. Starting in a smaller organisation may provide faster growth and learning opportunities in contrast to larger organisation, where work is typically more siloed.

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DON’T start with salary. Interviews naturally settle into salary negotiations. However, this may only happen after the initial interview or even the second interview if you are fortunate enough to be shortlisted. Therefore, let the interviewer broach the subject in due course and avoid immediately launching into negotiations before discussing the position itself.

DO demonstrate your value. Salary negotiations may only occur later but initial interviews determine if they will happen at all. Focus fully on demonstrating the value you will bring to the position. Marketing yourself confidently is fine but if you cannot back it up with technical competence, you will come over as arrogant. Rather work with the interviewer to establish your fitness for the role as this breeds a sense of teamwork and collaboration, both prized in organisations.

DO go high at first. It is much harder to negotiate up than down. When discussions around salary finally start, an important anchoring technique is to suggest a relatively higher salary and benefits expectations and then retreat to your actual desired package. Negotiators who believe you are willing to compromise will often reciprocate.

DON’T focus on salary alone. A total reward package consists of a fixed and variable portion, including benefits like medical aid and health insurance, a pension, vehicle or travel allowance, an expense account, incentive schemes, good work-life balance and many other potential offerings. Negotiating strictly on salary could mean overlooking important benefits. It also may be prudent to settle for a lower fixed income if greater value could be derived from stronger benefits that offer financial advantages or supplement your shortfall.

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DON’T overlook career prospects. A lower starting salary may also be worth it if the organisation provides opportunities for career growth and consequently higher future earnings. For example, a position at a head office affords greater visibility among top management to demonstrate your strategic value and therefore a chance to climb the corporate ladder faster. Therefore, as a springboard to a brighter future, a lower initial package might be worth gold.

DO play the field. Treating any salary negotiation as an all-or-nothing proposition can rob you of better opportunities. If you are unhappy with an offer, do not be afraid to walk away from the table to pursue promising alternatives. However, if opportunities are few and far between, it may be wiser to take the position to gain experience that will serve you well when a more desirable offer eventually comes along.

Mullins says it is important to know your worth and remember that negotiating a salary is a normal part of the hiring process and employers expect candidates to engage in it.

“By preparing well, showcasing your value and maintaining a professional approach, you increase your chances of securing a salary that aligns with your qualifications and aspirations,” Mullins says.