Salary and Negotiation for New Grads: Data and Insights
Interview season is almost here! Earlier this year, I interviewed around 250 of my fellow recent grads on their offers for employment after college. I compiled results capturing salary and negotiation data for new-grad positions in the tech industry, finance, and consulting. If you are a current student wading into interview season, I hope you find these results helpful when negotiating your offer.
The graph below shows initial, pre-negotiation compensation offers from a wide spectrum of companies. Mid-to-late-stage startups offer the highest base salaries, with an average of $102,513. Public tech companies offer the largest bonuses and greatest overall compensation packages. However, it is worth noting that consulting and finance companies award large performance-based bonuses, while tech companies grant equity packages.
60% of respondents negotiated their offers, even though 62% of respondents had never negotiated a job offer before. Overall, offer negotiation led to a boost in earnings across all industries — an average increase of around $2,600 in base salary and $5,000 in signing bonus. Startups allow the largest salary gains via negotiation, with an average increase of around $12,200 for early-stage startups and an average increase of $5,000 for mid-to-late-stage startups. Companies across the board increased signing bonuses dramatically during negotiation. Mid/late stage tech startups and large finance or consulting firms provided the largest increases in signing bonus.
Tech startups grant equity packages as part of an offer. Earlier-stage tech startups often offer award equity packages containing larger percentages of the company. The graph below shows the average equity grant size for various types of startups. For new-grads joining a post-Series A startup, the average equity package amounted to around 0.79% of the company; however, the median value was around 0.15%. Those joining late-stage startups can only expect to receive an equity package of around 1 or 2 hundredths of a percent of the company.
Equity grants from large tech companies contained shares with an average total value of $107,153. Most equity packages are vested over four years.
Respondents received an average of 2.6 job offers, and had around 4 weeks to decide which company they would join. Overall, respondents rated their negotiation experience a 3.5/5 with regards to stress, indicating that most people felt at least moderately stressed out by the experience.
Among my peers choosing tech companies, around half chose to join a large public company, and half chose to join a startup. 41% of respondents accepted a return offer to a company at which they had previously worked.
Demographic Differences — The Gender Gap
Examining trends across different demographics, I found that women were more likely than their male peers to choose a large, public tech company over a startup. Among all surveyed women entering the tech industry, around 55% chose large tech companies. In contrast, 67% of men entering the tech industry chose startups. The difference is statistically significant (p-value < 0.01) and mirrors other studies’ findings that women are more risk-averse than men.
Looking just at the tech industry, I examined differences in base salary across different demographics. There was no statistically significant difference across races or ethnicities, largely due to low response rates from minorities. However, new-grad women were initially offered almost $10,000 less in base salary than their male peers — before any negotiation. The difference is statistically significant (p-value < 0.01). Upon closer inspection, offers from large tech companies account for the difference. These large, public tech companies offer new-grad women over $10k less than men for new-grad positions (p-value < 0.038).
Across the board, a majority of students are successfully negotiating their new-grad offers. Yet, I was alarmed that large, public tech companies offer new-grad women so much less than new-grad men. This discrepancy anchors salary negotiation at a far lower number for women than for men, placing women at a disadvantage even before negotiation.