I always wonder about articles like this one from the Wall Street Journal's Career Journal section entitled, The Declining Value of Your College Degree. What are they trying to say? That your college degree isn't worth getting anymore? Don't worry, just get your high school diploma, right?
Here's the reality that is buried deep down in the piece:
To be sure, the average American with a college diploma still earns about 75% more than a worker with a high-school diploma and is less likely to be unemployed.
The reason I think these articles are written is because they are controversial. It's almost always a ploy to get people to read more rather than a true treatise on the state of compensation. The anecdotal stories don't necessarily roll up into the experience of everyone.
Springraise is built to answer many of these questions. This is precisely why we collect the education and compensation information that we do. As we scale to collect millions of profiles, we'll be able to tell you the value of a bachelor's degree, but YOUR bachelor's degree. We'll tell you how much a BA degree from the University of Michigan is worth versus one from Harvard. We'll tell you how much a person who works in pharma sales should make with a particular background.
The great news? You have the power to make this all possible. Just add your profile to Springraise and immediately you can see how your career progression stacks up to others with our background. The more people we have, the better the data. It's in your hands.
And by the way, if you are in college right now and read that article, think twice before dropping out.
The average salary is probably one of the most common numbers used in a salary negotiation. Like all averages, it is probably not used because it is the best number, but rather because it is the easiest number to calculate.
The average is figured out by creating some number of buckets of types of people out there and dropping each person into that bucket. The salaries in the bucket are added up and divided by the number of people in that bucket. What most people like about it is that it gives them one number to remember when they are thinking about what a person gets paid. We all know like any other average, there is a lot more to it than that one number. Just like the average price for a gallon of gas across the United States is nothing close to what I paid for gas this morning, the calculated “average salary for you” may be a lot less than what you really should get paid.
There are a few things to consider when thinking about average salaries.
1. There are not that many buckets and there can be a lot of people in them that don’t really compare to your situation. There may be a bucket called “Mechanical Technician with 3 years of experience”. This doesn’t at all consider the range of experiences, education, geography or even industry for the people in that bucket.
2. Average Salaries don’t adequately consider that those salaries are a part of an overall compensation package that may have included bonuses, stock options, healthcare benefits, etc. Your overall situation will likely be different from the averages and you shouldn’t be penalized because of that.
3. Average Salaries can lump together multiple years worth of salaries. This means that “today’s average salary” can be based upon salaries from people that negotiated their salaries 10 years ago. If you just think about what the world was like 10 years ago, you will instantly realize that things are very different so your salary negotiation should also be very different.
But here is the biggest problem – the average salary is for the average person. You are not the average person, you are much better than the average person. The fact that you have made efforts to study and understand the salary negotiation process puts you at the top end of professionals out there. Most people are comfortable sitting back and letting a job tell them what they deserve. You are going to go out there and make sure that you know and get what you deserve.
Clearly salary and education are related. You got to have an education in this world in order to demand a reasonable salary and guarantee that you maintain a certain standard of living. An undergraduate degree is a must and a masters or better is becoming more and more in demand for the highest paying jobs.
So what should you do? What degree should you pursue? Do I need a masters degree? These questions are key and can be answered looking inside and out. First inside, you have to know what you want to do . At least have an idea what intersests you so that you can try it out and get paid for it. If you don't like it, at least you have the solid education to fall back on to try something else. That's the luxury of having that bachelor's degree.
The same goes for a masters or professional degree. Go for what you want and the money will follow. Some careers are more lucrative than others, but believe me, money doesn't buy happiness. It does buy great vacations, so if you can bear having a miserable job for those 2-3 weeks of awesome vacation a year, then go for it.
Check out this powerful video on how I was able to turn getting MBA into a 180% compensation increase from what I earned before getting the degree!
Looking outside, there are resources that can help you understand which careers are most suited for you and your goals. The first step is to have a goal. You'll see that everywhere on this site. After that, it's about analysis. Get your data together.
We're biased, but we think Springraise.com is the best resource out there to get longitudinal career salary information. You can match your background and compare your career to others just like you. You can even see salary progressions of people on your career path, but further along, so you can anticipate how much you will make if you stay on the same path.
This type of scenario play is unprecedented and only available at Springraise.com. It's free to join, of course, so check it out. You'll find other people like you who want to connect and compare notes. Good luck!
Salary and gender go hand-in-hand. We all have heard of the statistics that women get paid less than men for the same job. That needs to change.
But to figure out where we are, we have to keep up on the research. There is a recent article in the Washington Post called "Salary, Gender, and the Social Cost of Haggling". The point of the article is to enumerate how social dynamics dictate whether men and women should negotiate for raises and higher pay. So who's better, men or women?
The answer is both. The goal in salary negotiation is often to maximize your compensation given your circumstances.
Men
What the academic researchers in the article suggest is that men often feel more comfortable asking for more money because they correctly believe that they won't be penalized for doing so. That's a cultural norm that leads to discrimination in overall compensation. Breaking that won't be easy for any manager. Awareness is the key.
Women
Women, conversely, have the social recognition that their penalty for asking for more money is much higher than that of men. Therefore, they are maximizing their salaries often by NOT asking for more money. It's this cultural norm that's so troublesome. How can we both encourage women to negotiation while not penalizing them from the other side of the table? This double-edge leads to depressed salaries for women.
So what does all this mean to salary negotiation? I believe it indicates that when you can justify a higher starting salary or better raise, then you MUST try. On average, you will get more money (7.4% more according to the article). If you perform up to the value, then no one will think twice about paying your price. Asking for higher compensation without compelling justification can result in greater penalty because the perception of the hiring agent could be that you are driven first by greed rather than the goals of the company. Often companies see that as a red flag, man or woman. Prepare, prepare, prepare.
Yes. Salary and weight are connected. This can be a taboo subject. I've been reading up on social norms and discrimination lately (don't ask why), and I came across some very interesting data regarding career ascension and weight. According to Carol Graham, PhD (U. Wisconsin, Brookings Institute), being obese negatively correlates with upward income mobility. This finding directly shows that being too overweight can cost us economically in addition to the physical toll on our bodies. The explanation is that there's a stigma attached to being obese in high income positions. Therefore, whether it's discrimination or low expectations of advancement among obese people, carrying too much weight can affect our ability to advance our careers. This is serious when you consider that 60 million people in the United States are considered obese by the CDC (BMI over 30).
I wonder if anyone has completed a study calculating lost lifetime income for every 1 BMI point above 30? I'm sure it's on some health economist's desk. That kind of data could begin to stem the tide of epidemic obesity has on the nation. It's a question of providing the right motivation along with the right support and clearly there aren't answers.
Over the past 30 years, the obesity rate has jumped so significantly, correlated with the plummeting price of high calorie food, fast food proliferation, and technological advances. You would expect a burgeoning waistline based on this rate of progress. Our jobs are more sedentary. How much time do you spend in front of a computer everyday? Ultimately it's up to us to stay in shape, but now we have an idea that it can truly "cost" more to gain weight. On that note, I'm going for a run.
A Salary Calculator is a very useful tool for going into a negotiation but there are definitely a lot of pro’s and con’s with leaning too heavily on what you learn from a salary calculator.
Pros:
1. Salary Calculators are an easy way to get a quick datapoint on what you should be earning. They can be fast and easy to get access to (often free).
2. Lots of smaller companies that don’t have access to more expensive data or don’t have comparable hires to you will rely heavily on salary calculators. Although you may disagree with the number that they are thinking about, it is vital to know what they are thinking.
Cons:
1. Salary Calculators are based upon survey data in order to figure out the industry averages. Depending upon the depth of the research, the averages can often ignore a lot of the smaller companies. It is much harder to get data on companies with less than 100 employees (they often don’t report their data and the data can be harder to find). This means that salary calculators are not always based upon data that is appropriate for the company that you are talking to.
2. Salary Calculators are usually only based upon titles and years spent at a job. Often companies will inflate or deflate titles to make up for lower or higher salaries. We all know that an assistant manager position at a Fortune 500 company is a lot different from an assistant manager position at a two-year old startup. Salary calculators can lump all of this together and not necessarily give you the information that you need.
3. Salary calculators can be difficult to us in negotiations because there are so many of them out there and other than the summary data, you usually cannot get access to the underlying data or a sense of how accurate it can be. The other person across the table from you could have a different salary calculator based upon a different set of data as well.
You should definitely look for a salary calculator as another data point, but you still need to do the additional homework in order to figure out what benchmarks are most appropriate for your personal situation. Your goal is to walk into a negotiation with appropriate salary information that represents you. With that kind of information, you will have a lot easier time getting what YOU deserve.