Should you take a salary lower than expected for your first job?
It’s not ideal, but it may make sense to take a job that pays below your market value.
Sorry to break it to you, but you may have to take a pay cut for your first job.
Research by PricewaterhouseCoopers found 72% of millennials say they’ve made compromises to enter the workforce, with one-third taking a salary lower than what they expected. Unless your degree and skills are in extremely high demand, you may find yourself among the underpaid.
Even small docks in pay can sting in the long term, says Seattle-based job interview coach Lewis Lin. “The difference between a $40,000 and $45,000 salary might seem inconsequential, but it can substantially impact what you make over the course of your career,” says Lin, author of Five Minutes to a Higher Salary: Over 60 Brilliant Salary Negotiation Scripts for Getting More.
But there are some cases where it makes sense to start out making less. Ask yourself these questions to determine whether taking a lower-paying first job is the right move for you.
“What’s my bottom line?”
Take a close look at your finances. Calculate your monthly expenses to determine what’s the lowest possible salary you can earn and still be able to support yourself so you don’t waste time applying to jobs that aren’t financially feasible.
“What am I truly worth?”
Robin Pinkley, co-author of Get Paid What You're Worth: The Expert Negotiators' Guide to Salary and Compensation, says many people—millennials in particular—falsely estimate their market value. Get a realistic idea of what you should be earning by taking the average of what calculators on Salary.com, PayScale.com, and SalaryExpert.com say you’re worth.
Additionally, get first-person insight on what your starting salary should be, says Los Angeles-based millennial career coach Crystal Marsh. “Talk to someone who has taken the career path you’re hoping to take,” says Marsh. Lin recommends reaching out to headhunters in your industry since they have firsthand knowledge of what employers are offering.
“Will the location lower my living expenses?”
It may make sense geographically to take a lower-paying job if you’re moving to an area where the cost of living is cheaper. “A job in Alabama isn’t going to pay as much as one in New York City, but it’s all relative,” says Beth Carroll of the Society for Human Resource Management.
“Am I in a position to negotiate?”
The short answer: Absolutely. And, as long as you negotiate professionally, there should be no harm in asking for more money. “Employers aren’t going to rescind the offer if you’re reasonable with your request,” says Carroll, so be realistic. “If you walk in asking for $65,000, and the job posting says the range caps at $55,000, that can be off-putting to a hiring manager.”
A good indicator that there’s more money in the budget is if the advertised salary range is higher than what you’re being offered. Granted, you’ll still need to be an effective negotiator if you want the hiring manager to bump up the offer. The wrong move: Focusing on your personal financial needs. “Don’t say, ‘I can’t live on that size salary,’” advises Carroll. “It’s not the hiring manager’s job to manage your personal budget.”
“Is salary most important to me?”
Evaluate your priorities before you start job searching. Recent research by Ernst & Young found that millennials are the most likely generation to say they would take a pay cut to have work flexibility. Thus, determine what matters most to you. If working from home is what makes you happy, you may need to take a slightly lower-paying job that offers telecommuting options, says Lin.
“Will this company open the door to earning more later?”
Some companies carry more clout than others. Depending on your industry, starting at a big-name employer that pays less could make your resume stand out when seeking future job opportunities. “Contrary to common belief, many larger firms can get away with paying below market value because they have a well-respected brand name,” says Carroll.
“Am I just in it for the job title?”
Choosing to start your career at a smaller firm—one that pays less—simply because you get a fancy job title won’t don’t you any favors. “If you’re a 21-year-old vice president of sales, recruiters are going to see through that,” says Lin. Focus on what matters most: Developing the skills and expertise that will increase your market value to future employers.
“What else is on the table?”
No wiggle room in the salary department? Ask for other financial perks, such as a signing bonus, reimbursement for relocation expenses, or transportation stipend; in those areas, there’s often more room for flexibility, says Lin.
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