Advertiser Disclosure

Recent Graduates Are Not Negotiating Salary — Losing Out on Crucial Income

May 6, 2015
Loans, Student Loans
Negotiating Salary
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own.

College students and recent graduates are missing out on valuable income early in their careers by not negotiating first job offers, according to a new study by NerdWallet and Looksharp.

We surveyed almost 8,000 new grads who entered the job market between 2012 and 2015, as well as 700 employers. All are members of Looksharp, a leading platform that helps students and grads launch their careers.

Only 38% of survey respondents negotiated with their employers upon receiving a job offer, even though most hiring managers said they expected to discuss salary at that stage. Three-quarters of employers told us they typically had room to increase their first salary offers by 5% to 10% during negotiations.

As college students prepare to walk across the stage on graduation day this spring, being confident and prepared will clearly be key to taking advantage of an important first-negotiation opportunity.

Scroll to the end or click here to see the detailed breakdown of survey responses.

Key trends and takeaways

  • 84% of employers said an entry-level candidate would not be putting his or her job offer at risk by attempting to negotiate salary.
  • Of the students and graduates who asked for a higher salary, 80% were at least partially successful.
  • There’s a significant gender disparity when it comes to negotiation: 29% more male graduates are negotiating job offers than females.
  • Employers said sales, marketing and engineering departments within their companies were most willing to negotiate with potential employees.

Negotiating SalaryEmbed this on your own site:

Copy and paste the following snippet.

<a href='' ><img src="" alt="Recent Graduates Are Not Negotiating Salary"/></a><br/>
Via:<a href=''>NerdWallet</a>

Salary myths debunked

Our findings challenge assumptions that keep some students and recent grads from negotiating. A full 90% of hiring managers said they had never retracted an offer because an entry-level candidate attempted to negotiate. Only 6% responded that they were never willing to negotiate with entry-level candidates. And 76% said entry-level employees who negotiated appeared confident for doing so.

Successfully negotiating a first job offer could mean a major increase in lifetime earnings for new graduates. An employee who successfully asks for a 5% salary bump on a $40,000 job offer when she is 22, for instance, will make an extra $170,000 by the time she retires at 65, based on average annual salary growth of 3%.

The gender gap

Only 34% of female students and recent graduates negotiated, but 44% of men did. Women are not only less likely than men to negotiate first job offers, but they also report being more uneasy about negotiating salary. When it came to asking for more money, 42% of women said they felt anxious — the most common response among the choices “excited,” “confident,” “indifferent,” “anxious” and “unprepared.” Of the men, 53% said they felt confident, the most common choice among male respondents.

We saw these attitudes bear out in salary expectations. No matter the industry, women were more likely to expect between $25,000 and $44,999 as a starting salary. Men were more likely to expect a higher range, from $45,000 to more than $75,000.

When women did ask for a higher base salary, they had the same level of success — about 80% — as men. Beyond salary, it’s possible that inherent gender bias discourages women from asking or getting alternative types of compensation. Men reported more success negotiating stock options, bigger bonuses and more time off; women said they were more successful negotiating flexible schedules.

What’s next?

Now that you know most employers are willing to negotiate salary with entry-level applicants, start building the courage to show up at the negotiating table. Here are a few key points to keep in mind:

  • Start by researching how much others earn in positions similar to the one you’re applying for. That way, if a hiring manager offers you a salary below the market value of the job, you have the research to back up your request for more.
  • Sit down with a friend, mentor or your college career counselor and practice how you’ll respond once an employer makes you an offer. Make sure your approach is respectful, thoughtful and objective, focused on what value you’ll bring to the company.
  • If your employer isn’t willing to budge, consider asking for other perks such as stock options or the ability to work from home one day a week. You can also suggest you revisit the conversation in six months, once you’ve proven you’re a great employee.

Student survey responses

We asked 7,764 men and women who graduated between 2012 and 2015 a range of questions about negotiating.

Employer survey responses

Our survey includes responses from 708 employers in more than 20 different industries. The most common fields represented were technology (17%), media (11%) and nonprofit (11%).

Survey demographics

Among respondents, 61% of students and recent graduates were female and 39% were male. All were young adults motivated to join Looksharp’s community of internship and job hunters. The employers in the survey use Looksharp to find and engage talent across the country. These employers represent a range of industries including technology, media, consulting and nonprofits.