Davis Nguyen specializes in helping college students start a career in management consulting.
It’s a historically well-paying industry: even before the pandemic, some of the companies larger ones offered students salaries that often approached six figures.
In today’s market, Nguyen’s clients are doing even better.
“They return with offers of $115. and $140 ,”, says the founder of My Consulting Offer, based in Georgia, USA. “In the current climate, graduates can earn much more money than they did a few years ago.”
Management consulting is one of the sectors in which that graduates are increasingly walking straight out of the classroom into jobs with pay packages that most people will never see in their lives.
Also in Big Tech (technological giants), software engineers often start with such salaries.
In the largest banking corporations, the pay of first-year analysts has skyrocketed almost a 30%, with base salaries of $72,000, in some cases.
In London’s largest law firms, there are newly qualified lawyers starting their careers earning $141,72.
According to Nguyen, “young people years earning $100 , right out of the box” has become increasingly the norm since the pandemic .
Often these Young people join companies where colleagues started with lower salaries and had to work hard for years to reach what they earn immediately.
Firms argue that the hiring crisis makes competition for the talent is fierce; if they want the best candidates willing to work long hours, they have to pay a high price for them.
But will offering graduates big pay packages really bring benefits, like incentivizing more hours or boost work ethic?
Or could it have unintended consequences, both for high-earning youth and the workforce at large?
High Expectations
Graduate salaries have been rising steadily for years.
Getty ImagesAccording to data from 2021 from According to the National Association of Colleges and Employers, a US nonprofit organization, the starting salary for some first-time workers in particular fields has skyrocketed: For example, the average salary for a computer science major has risen 7 % in just one year to $39,173.
Nicholas Bloom, teacher in economics at Stanford University, notes that demand for labor is rapidly outstripping supply in sectors such as technology.
The financial industry, with jobs that often require workweeks of over 70 hours, has also increased starting salaries to hire the best candidates.
“Employees want that your employer It’s considered a prized asset,” adds Rue Dooley, Human Resources Knowledge Advisor at the US-based Society for Human Resource Management (SHRM).
“The employees more young people say they expect to receive high salaries because they are aware of the shortage of talent and know what their price is.”
According to Josh Brenner, executive director of the recruiting market Hired, based in New York, tech workers in the US enjoy an average starting salary of $110,027.
Golden handcuffs and other problems
For Nguyen, “high wages open up opportunities for people who simply would not have had them, and do not take money away from those who started with lower wages.”
But while these high compensation packages have many advantages, they can also have consequences insidious.
Workers can find themselves trapped in jobs they hate, especially if they adopt lifestyles that rely on high pay, a phenomenon often referred to as ‘golden wives’.
At first, happiness, but later, sometimes, dissatisfaction but…
In addition, they can prevent young people from changing to professional careers that are more satisfying to them.
“Some may want eventually move on to teaching or work for a non-profit organization. Previously, that meant they would earn about $50,13 less; today, it’s about $50,000, and that may be enough to deter them,” explains Nguyen.
Sometimes. they can become a psychological burden because they can be intimidating.
“There are those who come from low-income backgrounds and think: ‘What did I do to earn so much more than my parents?’ It can cause impostor syndrome”.
On the other hand, experienced colleagues can feel bad, especially if they earn less money than a recent graduate, despite years of experience. stay with the company.
“It can create wage disparity issues“, says Dooley.
In addition, the companies themselves may not necessarily get what they pay for. While sky-high salaries can effectively “buy” a candidate’s willingness to regularly log unpaid overtime, it does not necessarily guarantee a better work ethic.
“The The risk is that employers assume that staff will be highly motivated because of their high pay, when in fact their employees take it for granted,” says Tomas Chamorro, professor of business psychology at University College London.
“High salaries can feel good when they get the job, but once they start, they usually want much more: the effects of a good salary are ‘used up’ psychologically”.
If you can, take advantage
With the job market the way it is, six-figure starting salaries will probably remain the norm in certain industries with high salaries. But it is unlikely that there will be a large trickle-down effect for workers in less elite sectors.
…if you are one of the lucky ones to whom it is offered Take advantage, says an expert.
Rather than raising wages across the board, the astronomical wages of a subset of ultra-privileged employees may deepen wage inequalities.
“What what we are clearly seeing is an increase in inequality and the gap continues to grow,” says Bloom. “If you have a degree in computer science, you can earn $576,000 to the 25, while if you leave school at 16, you could end up earning $25,, ten times less”.
The gap is likely to continue to grow, even if the labor market shrinks in terms of supply and demand.
Bloom explains that salaries they hardly ever go down.
A telling example is management consulting, says Nguyen, which has long withstood the rigors of the recession . “companies restructure salaries, but they never get rid of the six-figure”.
Therefore, given their resistance to the ebb and flow of the market, it is likely that the salaries of six-figure graduates figures not only take root more and more, but increase even more.
And if jobs are scarce due to the normalization of the labor market , these salary packages will be increasingly out of reach for most people.
“Six-figure starting salaries are here to stay and if growth cools it will mean they will be even more hard to come by,” says Bloom. “These are jobs that the privileged few who can do it should grab and not let go.”
You can read the original note on BBC Worklife (in Englishit’s here.
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