Graduate Pay Crisis: Why Your First Salary Isn’t Getting Any Bigger

It’s a bit of a shocker, isn’t it? You go through years of hard work, sweat through assignments, finally land your first graduate job, and then boom, your first pay check hits and it’s not quite what you pictured. You might be thinking, “Wait a minute, isn’t this supposed to be the reward for all those late nights and library marathons?” You’re not alone.

There’s been a noticeable shift lately and it’s leaving a lot of graduates scratching their heads. Starting salaries are growing at the slowest pace they have in four years. Employers just aren’t as quick to bump up that number as they used to be and there are a few reasons behind it.

Why Are Starting Salaries Stagnating?

The reality is that companies are playing it safe. With economic uncertainties still lingering many businesses are holding back on big salary increases. They’re worried about the future, and that’s making them a bit tight-fisted when it comes to offering generous pay packages. Plus, the sheer volume of graduates entering the market means they’ve got a lot of choice. Why increase salaries when they know there will always be someone willing to take the job for a bit less?

Caution isn’t the only reason at play here. A lot of industries are still bouncing back from the hit they took during the pandemic and they’re not willing to risk overpaying, especially at entry level. Employers are looking at long-term sustainability, and that means keeping costs down where they can.

More Jobs, More Competition

Here’s the kicker. At the same time that salaries are stagnating, the number of permanent positions is actually rising. It sounds great on paper, right? More jobs should mean more opportunities and, naturally, higher pay. But it’s not that simple. Employers can fill vacancies without having to sweeten the deal because there are so many people hunting for work. The market’s saturated with candidates, and that means there’s less pressure to up the wages.

What Can You Do About It?

1. Focus on the Long Game: It’s tempting to fixate on the starting salary, but that’s exactly how you should think of it, a start. Furthermore, entering the job market at a lower wage, can have long-term benefits. Once you’re in, you gain experience, build a network, and start proving your value. This sets you up for future promotions and pay increases. Admittedly, this isn’t guaranteed but remember, it’s much harder to negotiate from outside the workforce.
2. Leverage Non-Monetary Benefits: If the salary doesn’t quite hit the mark, look at the full package. Some employers offer extensive training, mentorship, and career progression opportunities. Others might have great perks like flexible working, healthcare, or generous annual leave. Sometimes these benefits add significant value, even if the pay isn’t quite what you hoped.
3. Invest in Yourself: One of the best ways to break the cycle of low starting salaries is to focus on upskilling. Consider taking short courses or earning certifications that are valued in your field. Employers are more likely to increase pay when they see you’ve invested in making yourself more valuable to the company.
4. Choose Growth Over Salary: At the start of your career, growth potential should outweigh the initial salary. If you’re in a role where you’re learning valuable skills, working with industry leaders, or handling responsibilities that make you more employable down the line, you’re already ahead. The first few years are about building a strong foundation, so don’t stress too much if the salary isn’t massive right away.

Let’s Compare Two Scenarios

Tom is a recent marketing graduate who has struggled to land his dream job. After hundreds of applications and several interviews, he finally receives an offer of employment. However, the salary is lower than expected and slightly below the average for that role.

Scenario 1: He rejects the offer and keeps searching

Tom feels confident that he can land a better paying job. There’s always a chance that his dream role is just around the corner, but there’s also a degree of uncertainty. His search might take just a few weeks, or it could stretch on for much longer. If he continues to chase his ideal salary, he might eventually lower his expectations anyway and end up applying for roles with lower pay. In hindsight, this could be seen as lost income and a missed opportunity to build valuable experience.

Scenario 2: He accepts the offer

After accepting the offer, Tom works for XYZ Company for a year, building up his skills and experience. While in the role, he continues to explore other opportunities. This time, he’s able to apply for roles with a higher salary thanks to the year of experience he has gained. He can keep working and applying for jobs without worrying about a loss of income. When a suitable offer comes along, he has the freedom to choose whether to move on or stay.

This is a hypothetical situation, but the lesson is invaluable. We all have a level of tolerance tied to our expectations. Over time, you may find that making slight adjustments to those expectations is inevitable. You’re still young so trust me, your first job will feel like a distant memory in the future. Accepting a lower salary now to build your experience can set you up for bigger and better opportunities down the line.

Final Thoughts

Your first pay check isn’t the be-all and end-all. Sure, it’s frustrating when it doesn’t quite hit the mark, but it’s just the beginning. Focus on building experience, proving your value and pushing for progression. The salary will come with time, and your future self will thank you for being strategic now.

The job market’s a bit of a rollercoaster now but being aware of what’s happening and why puts you in a stronger position. Keep your chin up, keep learning, and don’t lose sight of where you’re heading. Landing a job even with a modest salary, is better than being stuck on the sidelines waiting for the perfect offer.