Low starting salary?

October 13, 2009 3:58 AM

Recent MSc graduate offered low starting salary. Now what?

I just graduated with a Masters in a science field whose degrees are very much sought after this year. I was offered a really nice job in this company that I would like to work for, however, the starting salary is about 10-20% lower than what it would be in other companies. That being said, I am grateful for any job. There was a real crunch in the industry a couple of months ago, where employers were heavily cutting back on their budgets and hence not recruiting then.

Are my expectations too high for an entry-level job? Or should I try to negotiate for more? If so, how would I do so? Keep in mind that I am in a science and technology field where people with my degree are very, very heavily in demand. I got several other interviews lined up -- only, the starting date for these jobs are a year from now, and I can't wait that long without a proper job (I have student debts to pay).

Another caveat: While this company pays a low starting salary, bonuses are fairly generous, and there are a lot of perks like business-class travel only (while most other companies allow entry-level employees to only fly economy class).

posted by moiraine to work & money (17 comments total)

If you were more specific about what field you're in, people who know about that field could give you better answers about the current state of the industry.

My first question is: have you tried to negotiate, or is this their first offer? It never hurts to at least try to negotiate your salary. Give them a number slightly higher than your expected starting salary and see if they'll raise their offer.

However, I would imagine the starting salary for the job that starts right now is lower because unemployment is affecting everyone, even those in your ordinarily high-paying industry, and as a results they are getting desperate people with job experience applying for entry-level positions. If you turn them down, they may easily find someone else who will take the lower salary because they need a job right now. If you really have the luxury of waiting a year to start a job at your expected salary, I guess you should go for it. But what if you don't get any of those other jobs you have interviews for? How long can you go without a job?
posted by hydropsyche at 4:21 AM on October 13

Keep in mind that a perk you otherwise wouldn't use shouldn't really be factored in to your salary. For instance, if you would be flying economy class normally, and be fine with it, getting bumped into business is a nice perk, but isn't saving you any money. A perk like paying for public transit, or gas, or lunch every day, or something like that where it would be a normal expense anyway, would be.

Without knowing your field, the company, or their offer, it's hard to answer your question. Are you confident that your salary expectations are in line with an entry level job in your field?

That being said, you have an offer now. You have positions that start in a year. Would it be terrible to take the job now, still keep your options open, and possibly move to another position when it opens up?
posted by CharlesV42 at 4:23 AM on October 13

It sounds as if you're stuck on what you expected to be true rather than accepting of what is true. The idea that "people with my degree are very, very heavily in demand" does not jive with "there was a real crunch in the industry a couple of months ago, where employers were heavily cutting back," or with "the starting date for these [other] jobs are a year from now." Your qualifications may have been in high demand in the past, and may be again in the future. But you live in the present. There is no magic trick to learn here. Take the best of the jobs that's actually available to you. If a better opportunity blooms in a year, then your employer may have to renegotiate your salary to keep you. That's then. This is now.
posted by jon1270 at 4:24 AM on October 13

Okay, I guess I have to elaborate a little further. This is the oil industry, and when oil was $30 a barrel last December, a lot of the companies panicked and cut exploration budgets.

But now oil is $70 a barrel, and anything about $40 - $50/ barrel makes a worthwhile case for exploration. So now people with my Masters degree are being heavily recruited.

I have attended two other interviews beside this one so far, and I got one job offer already, and waiting for a reply from the other one. The one job offer is a major oil services company, so their pay is 2/3rds of that of oil exploration and production companies.

I have not negotiated, and this is their first offer.
posted by moiraine at 4:37 AM on October 13

So you're asking whether it's okay to negotiate? Or, perhaps, how to do so? It's always okay. You do it by demonstrating that somebody else is willing to give you a better offer. Better offers that you can't actually take (because, for example, they're a year off) don't count. Better offers that aren't actually better (because, for example, they require more work or have fewer fringe benefits) also don't count.

If salaries at 'oil services companies' are typically 2/3 of salaries at 'oil exploration and production companies,' then there's probably a reason for that. Is the work at the latter sort of company more demanding? Does it require more travel? Is that the sort of life you want? Because if you don't mind the additional demands then a higher salary is a win. If you'd rather avoid those demands then the additional cash might be something of a wash.

Also, if salaries in the segment of the industry where you've got a real offer are typically 2/3 lower, but your offer is only 10-20% lower, then the offer you got is above average for that segment of the industry and may not be very elastic.
posted by jon1270 at 4:57 AM on October 13

Ooops. 1/3 lower.
posted by jon1270 at 4:58 AM on October 13

Negotiate. It doesn't matter what industry you're in; if they offered you the job, they want you. They're expecting you to negotiate, so their initial offer is probably on the low side anyway. Ask for more, but expect to settle somewhere in the middle.
posted by willpie at 4:59 AM on October 13

The oil prize has recovered, but my friends in oil services companies haven't received raises or bonuses this year. Just a datapoint. (my friends are all in the first three years of employment, so they're at most one level above entry)
posted by atrazine at 5:00 AM on October 13

I recommend you negotiate, and if the other interviewer offers you a job, use that competing offer to leverage for more money.

To keep your options open in future I'd also recommend working for the exploraton/production companies directly if it's possible (and not the services companies). I'm told that moving from a services company -> production/exploration company is a bit more difficult compared to the other way around.
posted by the_ancient_mariner at 7:17 AM on October 13

Maybe you could research other companies or the general trends of salaries in your industry, and then print those out. When you go to negotiate with your employer, having actual data to back you up may help make your argument stronger.

Also, is the salary they offer you enough to live comfortably on for the next few years? You should assess your 5-year goals as far as expenditures (e.g. do you plan to buy a house, start a family, etc) and see if your current salary will support that comfortably -- OR see if there are opportunities for promotion along the line.

If you don't think you'll be able to earn enough over the years to support whatever your 5-year goals may be, you should consider leaving. If your salary WILL support you comfortably, then it's ok if it's not super high.
posted by starpoint at 8:00 AM on October 13

It's a tough economy and they're going to use it to their advantage. As long as you're ok with it, I wouldn't worry. 10-20% lower isn't too bad.

Try BA/MA back in 94--I made $19k and only bumped up $5k a piece, if that, due to "give us your salary history" for 13 years. Then I realized I was screwed all along. By the time I was making $40k, everyone else with the same amount of skills and obvious salary knowledge was making $65k+.

Talk about being pissssssssed.

These young punks these days and their over $40k starting salaries. Grrr.
posted by stormpooper at 8:19 AM on October 13 [1 favorite has favorites]

Seconding all the comments about figuring out your financial goals and what you need right now.

Also, consider your hourly rate. Do the math and see what you would be making per hour. A lot of investment banker types I know who just started their first job do this and realize that they are actually making shit money per hour compared to someone who works a lot less but makes less.

You just need to figure out how important money is to you.

That and don't be afraid to negotiate. If you've done the research on starting pay for this year in your area and it shows they are coming in that much lower--show them the data.
posted by Elminster24 at 8:35 AM on October 13

I wouldn't turn it down unless you actually get a better offer. The economy is rough, and you are entry-level. Putting field-related experience on your resumé is worth a lot in its own right. So is having a job at all.

You can negotiate, but unless you have another better offer, you're just bluffing. It's OK to at least try and see if they fold or call your bluff. It sounds like they hold all the cards though, and they probably know it.

When it comes down to it, what you're "supposed" to be paid is a construct based on what people are actually paying. If no one is offering that much, you need to revise your expectations. Maybe it will go up later, and you can either renegotiate or take a new offer. If it doesn't, turning down this job isn't going to do you any favors.
posted by cj_ at 9:17 AM on October 13

I work in the industry in one of the leading oil-field service companies, currently based in Houston. The first half of the year was difficult for everyone, primarily the service companies who laid off a bunch of people, but also a lot of the operators who laid off personnel or froze hiring. Check out the rig utilizations if you doubt what I'm saying. There's been no annual raises this year for a lot of people, and salary cuts for a lot of people, but that's a small price to pay to keep your job. I think your expectations are based on last year's data, not the retrenchment that's been happening in the last 12 months, and is still ongoing in some companies.

It's starting to turn around in the US, but globally the lay-offs are in progress. Typically the US is the first to react and the first to turn around. We're seeing recruitment starting to increase now, but more for experienced industry hires, not fresh graduates beyond the usual milk-round hiring (and those are often being asked to delay their start date).

Negotiation for a fresh graduate may be limited as they would most likely have a starting scale and you progress up from that depending on performance. I used to work in the personnel function so know a fair bit about how it works.

Movement between service companies and operators is fluid in both directions depending on your area of expertise. I work with operator personnel who used to work for service companies and vice versa. In my experience, progression tends to be quicker in the service companies than with the operators.

Since this is the only offer you currently have on the table for a job starting now, I'd take it and start paying down your student debt. Then if it's not working for you or a better opportunity comes up next year, feel free to move (but leave on good terms, no bridge burning). Either way it's good experience and adds to your resume. MeFi mail me if you want more advice. Congratulations on the job offer.
posted by arcticseal at 10:15 AM on October 13

Also, your $40-50/bbl assumption is incorrect. Cost of extraction varies widely between onshore, shelf and deepwater projects.
posted by arcticseal at 10:17 AM on October 13

I wouldn't turn it down unless you actually get a better offer. The economy is rough, and you are entry-level. Putting field-related experience on your resumé is worth a lot in its own right. So is having a job at all.

cj_ has it nailed here. I just got my first big kid job right out of school and was sort of disappointed that the pay was about $10K less than I was expecting. Am I still disappointed? No way. This job rocks. Whatever I'm not making in wage, I'm making up for by gaining valuable skills and contacts I didn't have before. Had I held out for something better, I'd still be making cappuccinos for a living. YMMV, obviously. Either way, good luck and congratulations on the job offer!
posted by futureisunwritten at 11:22 AM on October 13

Take the job. When you're at the job, do a really good job, learn as much as you can, and try to ethically become a valuable member of the team that they won't want to lose. When you're not at the job, look for a new job in the field that will pay you more. When you find one, give your current job a chance to bump your pay (and title and responsibility, hopefully), letting them know you'd rather stay because you like the company and the job and the people so much, but you have to make sure your career is a mobile one and that the new opportunity is too good to pass up. Take the raise/etc they offer if it's good enough, otherwise take the new job.

Lather, rinse, repeat. This is how you build a successful career in any field.

If it helps, think of it this way: school got you in the door, and your first job (or two) in the field will teach you how to work. You're being paid in experience and credibility as you prove yourself. Have at it.
posted by davejay at 12:21 PM on October 13