My ex-colleague and I were randomly chatting about our pay when she mentioned what she earned.
$3000.
My jaw dropped when I heard that. How could it be possible that she was earning 20% less than me, even though she had direct experience working in Singapore, and all the experience I had was in the U.K.?
Later, I realised that I was earning even more than a senior who had worked there for 8 years longer than I had.
For full disclosure, I earned $3600 in my first year, and later got bumped up to $3690 in my second year. This salary increase of 2.5% was something I asked for, not something automatic.
By no means is 3690 a high number, but it does demonstrate how much lower others were valuing their work.
Hearing these experiences led me to see the plight facing many fresh graduates, who tended to underestimate their experiences, therefore asking for much less.
Know the environment
As a fresh graduate, you’re in a catch-22. Ask for too much, and you will find yourself rejected for most jobs.
Ask for too little, and you will find yourself leaving money on the table.
Ideally, you want to be in a place where you’re pushing the boundaries of what’s possible pay-wise, and not leaving money on the table.
It thus helps for you to know what others are earning. The 2021 MOE Graduate Employment Survey (GES), was published 2 months ago. It’s probably to convince people to still go to university, especially when you see reports talking about how even university graduates can’t get a job.
Or you might read of Zuckerberg dropping out of college to start Facebook, and you’re convinced that you should do the same.
Before you resign from college, hold on.
The numbers from the survey below can help you have a rough gauge of how much you should ask for.
But if I were you, I wouldn’t base my asking solely off these numbers.
Places like Glassdoor can also give you an idea of the past salaries of others who’ve worked there. What you need to understand is that Human Resource personnel are often the ones handling your pay package, not the hiring manager.
This has two implications. It’s not only about impressing your hiring manager, but actually convincing HR why you’re worth more than the packages they have offered others, especially when you’re fresh. Showing previous work experiences, and especially the value you’ve added in the past is a great way.
As Google recommends in their own CV course, they often tell applicants to write:
Achieved X by doing Y over Z months
This can help you demonstrate your value.
Know what you want
Money may not be the most important thing to you. If you believe in what your company is doing, you may not even care about how much money they give you.
You just want to go in!
What you need to reflect on is why you’re entering the job. If you’re entering the job as a weigh-station job, as a way for you to find time to figure out what you want to to do, money may not be the most important.
Instead, just having a paycheck that can support your needs may be the best way.
When I first started in the social services, the money was comfortable as a fresh graduate. But eventually I left to start a business because I realised the job didn’t suit the way I saw myself making impact in the world.
Even though starting a business meant that my pay dropped precariously from $3690 to $800 in the first few months, it gave me the freedom and autonomy that I desired.
Understanding what you want can help you to match your salary expectations with your life expectations.
The fresh graduate salary is a proxy for the value you can add
If you earn $5000 a month, be prepared to produce at least $25,000 in value for the company.
Going into any negotiation, be clear about the value you can provide. Usually, before a business takes on someone, they need to be sure that the employee can produce at least 5 times the value they are paid.
This means that you should ideally demonstrate how you’ve produced significant economic value in the past.
You may think,
I’m a fresh graduate who’s just been an intern at most! How can I show how much value I’ve produced?
That’s why if you’ve yet to graduate, you should constantly be looking at how you can get hard numbers on the impact you’ve made. Say you’ve written a content piece as an intern.
- How did that do?
- How did that convert into sales?
- What value did it provide to the company you were working for?
Don’t be shy about money
That said, money is important.
I’ve seen many young people seem almost sheepish with how they talk about their salaries, almost as if it’s a crime to earn money for what you do.
For this, I think you should take a lesson from an intern I supervised. In the second month, he asked for a 20% pay rise!
Whilst I’m not asking you to model his example, it hardly hurts to be clear about what you’re worth.
BATNA
That’s why it helps to have an inner BATNA.
BATNA is Best Alternative to Negotiated Agreement, a concept introduced by Roger Fisher and William Ury in their 1981 book, “Getting to Yes: Negotiating Without Giving In.”
Knowing what your alternative is, when you’re faced with an offer, gives you the option to walk away, when you don’t like the money they are giving you.
Having been on both sides of the negotiating table, both in terms of offering salaries, and asking for salaries, I’ve seen that those who can afford to walk away are often the ones who get the higher pay. As a startup, I know that there are certain pays I can’t give.
Thus, it’s often the case that I would have a lower number in mind, knowing that it may not be close to the market rates.
Those candidates who are willing and able to walk away are those that have the upper hand. I can’t keep them.
Negotiate with a range, rather than a number
Having a range, rather than a number can give the HR options in terms of thinking of how to employ you. You should always put the starting range at what you would ideally like to get, rather than what you think they will give.
Start at what you want, not what they want.
Know your worth
At the end of the day, no one can tell you how much you’re worth except you. You need to know within how much you’re worth.
If you don’t recognise your own value, no one else will.