Jan 17, 2019
Repaying Student Loans 101
Learn how to repay your Discover Student Loans in four simple steps.
Getting your first job after college can be exciting — and a little scary.
So before you put your foot on the career ladder, there's one thing you need to do first: learn how to negotiate key employment benefits. Salary negotiation is particularly important.
"When you get your first starting salary, it will often serve as the base for future raises," says Rich Franklin, founder and CEO of Bay Area staffing agency KBC Staffing. "A higher starting salary not only makes you more money today, but it often makes you more money in the future as well."
Skipping out on a salary negotiation could result in leaving money on the table, says Ewa Zakrzewska, human resources specialist at global career advice website Zety. It's a step you don't want to miss, especially if you're leaving school with student loans in tow.
"Starting off with a good salary option will take the edge off financial commitments and let you focus on exploring your career path," Zakrzewska says.
As you navigate the interview circuit with prospective employers, use these four tips to master the art of negotiation.
Learning how to negotiate a salary should be your first priority but it's not the only thing that may be up for discussion.
"New grads should always be thinking about their entire package, rather than simply their salaries when conducting a negotiation," Franklin says. "This is important not only because other aspects of a contract beyond pay tend to affect your life, but also because it makes negotiating easier."
For instance, you might agree to a lower salary for an extra week of vacation, flexible working arrangements that allow you to stay home one or two days per week, a signing bonus, relocation, clothing and vehicle allowances or repayment assistance for your student loans. Only 4 percent of US companies offered student loan repayment in 2018, according to the Society for Human Resource Management, but it could be worth asking your employer about if you graduated with debt.
Bottom line, knowing what's up for grabs can help you negotiate a better deal.
When interviewing for your first job after college, it's tempting to take the first salary offer you receive but that can hamstring your negotiations. "The number one mistake new grads make is feeling grateful for a job offer of any kind and accepting the first salary number that's provided to them," Franklin says. "Employers know that new grads often make this mistake and are well positioned to take advantage of it."
He says the most important negotiation skill to learn is anchoring.
"When you're in a negotiation, the first number offered by either side often serves as the anchor for future offers, so it's always best to start high," Franklin says. "If you're asked what type of salary you're expecting, add 10 percent to whatever you think is reasonable."
Anchoring yourself higher can keep you from selling yourself short. Even if you're not asked directly about salary expectations, you can set an anchor point based on the entry-level salary that's typical of the position you're seeking. If a prospective employer's initial offer is below this baseline, you can decide whether it's worth it to continue negotiations or walk away.
For example, if an employer offers you 5 percent less than what you wanted but you have a chance at getting a 1-2 percent raise after your probationary period, that could help make up for the lower initial offer. But if an employer is undercutting your target salary by 10 or 15 percent, with nothing to balance that out in terms of benefits or an eventual step-up in pay, you may be better off looking for a company with salary offerings that are closer to your goal.
Educate yourself on typical entry-level salary in your field so you have a frame of reference to work with when choosing an anchor point. The Department of Labor's Occupational Outlook Handbook can provide insight in entry-level salaries for a wide range of careers. You can also find salary information on career sites like Glassdoor and PayScale.
Zakrzewska says people do themselves an injustice when they downplay salary expectations just to get a foot in the door. "It's like admitting that your skills and engagement aren't worth much," she says. You're better off approaching a salary negotiation with confidence and a clear idea of what constitutes fair compensation.
Getting your first job after college may mean negotiating salary and benefits with more than one company simultaneously. It's critical that you know how to use that to your advantage.
Aaron Whitaker, an account coordinator with Silicon Valley-based public relations firm The Hoffman Agency, found himself juggling job offers from two companies after graduating from Boston University in 2017. He compared salary and benefits for both offers to determine what was more suited to his needs. When it was time to negotiate, he had a strategy.
"I leveraged the salary of the first company that gave me an offer to try and up the ante for the second company," Whitaker says. He shared the first salary offer he received with the second company, which then offered a higher salary. He went back to the first company and asked them to match that higher offer. They agreed to increase their initial salary offer and he accepted the job.
"Don't be afraid to negotiate a higher salary," Whitaker says, "but don't be too aggressive either." If you come off as arrogant or inflexible, that may result in losing out on an offer altogether.
You may not have an extensive work history as a new graduate, but you likely have other strengths that make you an attractive candidate. You might have solid soft skills, for example, being an excellent communicator or knowing how to read people. Or, you might already have some business experience from an internship or running a side hustle to make extra cash. It's all ripe material for negotiating a job offer.
"At this stage of the interview process, the hiring managers have already invested a significant amount of time and effort to meet with you," Zakrzewska says. "If you've been chosen from hundreds of other candidates, they must have appreciated a specific set of skills and might be willing to invest in having you on board."
Even if it's your very first job interview, "you start off with the same right to negotiate salary as anybody else," reiterates Zakrzewska. Make sure a prospective employer is aware of any relevant experience you have that could make you better suited to the job — and deserving of a higher salary.
This includes playing up special classes you've taken, internships you've completed, volunteer stints and travel experiences — anything that might increase your value as a prospective employee. And if nothing else, "pitch your enthusiasm and work ethic and at the very least, ask for 10 percent more than what you're offered," she says.
It's important to know how to negotiate a salary but it's equally important to remain flexible to avoid a missed opportunity. Zakrzewska says if salary negotiations don't produce a 100 percent satisfying result, to consider whether the job might compensate you in other ways.
For example, the company may be short on salary but offer the kind of workplace culture you're looking for. The job itself might speak to what you're passionate about or give you a chance to spread your wings and learn some new skills. Or you might be able to snag some nice perks, like the option to work from home or free meals and snacks in the break room. And of course, working for a well-known company can open doors for when you look for new opportunities. In other words, try to see the big picture when considering a job offer and don't lose sight of the potential long-term benefits that aren't part of your salary.
"Money should not be your priority for your first job," Whitaker says, "but rather which company will provide the best learning and growing experience to further your career."
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