Today’s Job Search: Salary Requirements
This article is part of a new series. The tough economic times are a concern for everyone, but the job market can be especially intimidating for inexperienced college students. That’s why the Career Services Network asked students what their top concerns were and then directed the questions to career experts both within and outside of the network. Each article will have a student question with three expert answers. Read on for the second installment.
Student Question:
“Should my salary requirements reflect the current economy?”
Lauren Chomiuk, Professional Writing, Class of 2009 _____________________________________________________________________________________________________
Expert Answers:
1) Salary Research
“In an early October 2008 survey, employers made it clear that they did not intend to lower starting salaries for new college graduates; however, 80% said they had no plans to raise salaries. Since the survey was taken, the economy has continued to weaken and employers could have responded by making salary adjustments, but probably not. Starting salaries are determined by three things:
1. Supply and demand. Right now there are many more graduates than available jobs; thus, employers do not have to increase salaries. In some areas, such as computer science and nursing, there are fewer candidates available than open positions. In this case you might see salaries rise slightly.
2. Skills and competencies. What employers pay for are skills and competencies: the more valuable a particular skill is to the employer, the more they will pay for it. Companies that find themselves in a competitive global environment will want to identify the best talent they can to ensure that the company is positioned accordingly when the economy turns around. In this case employers will pay top dollar. Because employers are targeting the same talent, some individuals will graduate with high salaries. Overall, I expect the top end of the market to contract with more employers configuring salaries closer to the historical mean.
3. Location. Cost of living can affect salaries, particularly in the northeast, metro DC, and California- Chicago is also expensive. These factors may not come into play as significantly this year because housing costs are down across the country. Two factors would drive salaries down: If we enter a period of deflation where prices for goods and services drop, then employers will ask for salary adjustments so as not to go out of business. A total collapse of the labor market would send salaries cascading downward. The unemployment rate is still below 10% for college educated; until it reaches 20% we should be okay.”
Phil Gardner, Director of Collegiate Employment Research Institute (CERI), gardnerp@msu.edu
2) Stay Informed
“Yes, a student looking for a full-time or internship opportunity needs to be cognizant of what is going on in the economy. That means different things for different disciplines, because some skill sets are in higher demand than others. Students should be very clear with their potential employers about what is important to them: salary, work environment, dress code, work-life balance, etc. There are still lots of employers where there is flexibility in these areas, but there are others who might be less flexible right now. Sometimes employers may not be able to accommodate new employee requests based on current or anticipated business needs and conditions. So yes, students should be cognizant of what is going on in the economy before making any type of requests of their potential employers; however, they should still make decisions based on what is important to them in their internship or full-time role.”
Jason Luring, Abbott Labs, Senior Manager, University Relations and Talent Acquisition
3) Look for Other Benefits; Be Grateful for a Job Offer
“Salary is what salary is…a means to buy things. It is also something that ebbs and flows and is based on economy, location, industry, position, and timing. Salary is negotiable and can change significantly over time.
Today’s economy will have an effect on salary, with many employers holding offers down to their lowest levels (little if any increase from last year), and controlling the number of offers and signing bonuses.
To ensure their best offer, students should know the field, industry, location, and position averages (with minimums and maximums). They also should be aware of the standards for benefits, vacation, tuition reimbursement, etc. Although salaries will be very inflexible this year, the opportunity to negotiate an additional benefit or opportunity may be fair game. If the company truly wants to hire you but has no room to raise salary, non-compensation benefits may be available, such as a more flexible work schedule, immediate vacation time, and time/assistance to pursue an advanced degree.
Finally, in a tough economy, the job seeker must showcase a certain amount of respect and gratitude for a job offer. With so many companies going bankrupt, laying off workers, and/or rescinding offers, today’s college graduate must enter the workforce a bit humbled for the opportunity to work right out of college and with the drive to work hard to show that the employer was correct in offering the position. This will lead to faster advancement and salary increases as the company and economy rebound.”
Garth Motschenbacher, Director of Employer Relations in the College of Engineering, motschen@egr.msu.edu
