Thursday, April 17, 2008

Starting Salaries are not all created the same

You might not get rich with a career in engineering, but you can get very comfortable. Starting salaries for engineers with a Bachelors degree are in the $50K to $65K range. Several factors will determine whether you start at the top of that range or the bottom. Here are a few that make a big difference: GPA, CO-OP experience in engineering and/or intern experience, and believe it or not - alma mater.

That's right, getting a degree is important, but where you get that education also makes a difference. And probably not for the reason you might think. Sure managers like to hire from their alma maters, but that doesn't justify adding more money to the starting salary. Without a doubt, some universities have higher quality engineering departments than others, but not all companies are willing to pay for that upfront. No, the reason some schools garner a premium is because those schools are designated as target schools. That’s an inconspicuous way of saying the company wants to hire people from a small select group of schools over all others to enhance diversity.

These types of practices seem to shock the average employee when they first learn of them. Most folks are aware of affirmative action and the push to hire more minorities, but very few realize to what extent this policy has been expanded at many companies nationwide. If this practice is to improve the quality of the workforce, why isn’t this information more widely discussed/published? Good ideas typically withstand scrutiny.

Everyone should know that new hires from target schools command more money, 1000's more, right from the start. If you were a high school senior and you knew that new hires from school A get $5000 more in salary and possibly a couple thousand dollars more in starting bonus than a similarly qualified new hire from school B, which school would you pick?

It's not quite that simple - because of course, you must also be a minority. Not much you can do to change that circumstance in life, however, all is not lost as you can address some of the other salary boosters.

For one, if it is at all possible, get a summer internship at an engineering company. The experience may help you decide your future career path or at least weed out a job that you know you don’t ever want to do again! Another option is to join a CO-OP program - working one semester and then returning to school for the next and so on. Most companies will reward that experience with a higher starting salary.

This past week, I participated in the Carnival of Financial Planning. My article "How much Employer Stock is too much?" was included.

No comments:

Post a Comment