BLOG: Graduating BBA – Remember this when negotiating salaries

On the cusp of graduation, many BBAs are actively looking for work or negotiating their future job with their employer. Whether you’re actively employed, or just paving your way into the job market, all graduates are no doubt interested about the effects of graduation on your career and salary development, as well as what other things should be thought about when negotiating for salaries.

The criteria for determining the salary depends on where you work

In many sectors, collective agreements govern the salaries by setting the minimum salaries for different job duties. For the employers who adhere to a collective agreement, there are also annual raises that are collectively negotiated for, which lead to raises in each employee’s salary. In addition, collective agreements may list situations, in which personal raises are mandated, for example when the job description changes to a more demanding direction.

The employer can always provide a salary that is higher than the collectively negotiated minimum. In these cases the salary is negotiated partly on a personal basis. In practice, this means putting in your own salary request when applying for work, and having personal salary negotiations with the employer during the employment.

All sectors don’t have a collective agreement. In these cases, salaries are always negotiated on a personal level, at the start of the employment and during it. However, the employer organization should have  a cohesive salary system, which means that the employees’ salaries must be in line with the demandingness and requirements of their job.

The employer’s salary policy has an effect on your salary development during employment by determining the criteria for personal salary raises. The criteria must be equal and fair for everyone. If the employer doesn’t openly share this criteria, you can discuss salaries with your colleagues or elected personnel representatives, i.e. shop stewards.

The level of demand defines the salary

Whether the salary is determined based on a collective agreement or a personal salary negotiation,, the primary basis for determining salary is always the level of difficulty of the job tasks: the more demanding the job task, the higher the salary that is generally paid for it. The employee's completed degree is not usually a primary factor for determining the salary level, but the employee's educational background has a significant impact on the types of jobs they seek and are employed in during their career. In addition to the difficulty of the tasks, the employee's level of competence is impactful  in determining the salary. Education naturally also contributes to this.

Consider the employer's perspective in salary negotiations

If you’re already employed when graduating, your employer might not consider your completed degree alone to be a sufficient reason for a salary increase. While it's common to have salary negotiations  upon graduation, you should also prepare other arguments to support your request for a raise. A degree provides valuable skills and qualifications for the workplace, but employers typically tie salary increases to concrete evidence of increased contributions to the company.

Typically, salary increases are a result of job responsibilities becoming  more demanding and the development of professional skills. It's important to consider the employer's perspective when preparing for salary negotiations. Think about how you can justify the idea that the value your employer gets from your work has increased. Completing a degree can be part of this equation, but it’s rarely the only significant argument when negotiating for salaries.

Some collective agreements also contain clauses on how the completion of a degree affects an employee's salary. It's worth checking this if your workplace follows a collective agreement. Even if there's no specific clause about this in the collective agreement, you can still request to negotiate your salary when you graduate. Typically, salary negotiations are conducted with your closest supervisor."

Understand the basis of salary determination and your employer's salary policy

Taking care of your own salary development during your career requires knowledge of the basis of salary determination. This information can be obtained simply by asking your employer - every employee has the right to do so.

Most collective agreements are national and therefore public. Even if a company has its own collective agreement, it must be made available to the company's employees. If a different salary system is applied in the workplace, the employer must also provide information about it.

Understanding the employer's salary policy is also important for salary development. It is essential to know on what grounds the employer grants personal salary increases - so called merit raises -  and what kind of professional development and work performance is expected in one's own role for the salary to increase. It’s also good to know if a salary increase is only possible when moving on to a more demanding position. These matters can be discussed with your own supervisor, for example, during a performance review.

You can contact our salary counseling service if you need help with preparing for a salary negotiation and determining an appropriate salary level, whether it’s for a new job or one you already have. Our salary estimates are based on our annual member survey, where we gather statistics about the salaries of BBA and MBA degree holders.