The compounding
effect of starting

Why is starting salary so important?

Multiple studies show a direct relationship between your first salary negotiation and the income you may earn over your lifetime.

A $1,000 difference in starting salary can translate into $500,000 or more lost over the course of a career

This is called
The Compounding Effect

The impact is especially detrimental to women, who on average earn

18% less than their male counterparts.

The disparity is even larger for women of color.

Recent data from the National Associations of Colleges and Employers (NACE) demonstrates that the wage gap between men and women starts right out of college.

And it continues to increase over the span of a career, leaving women with a significant lifetime wage deficit relative to men.

Here's an example:

Jack and Jill both graduate from college with bachelor's degrees in business administration. Shortly thereafter, Jack and Jill both accept analyst jobs at the same consulting firm.

Right out of school, Jill is earning approximately 19% less than Jack.

Let's see how their salaries play out over the course of their professional careers:

These figures are based on a modest 3% annual raise. When promotions, new jobs, position changes, and salary negotiations are factored in, you can see how the gap can widen quickly.

Four in ten job seekers say money worries led them to accept the first job offer they received, with 64% of job hunters accepting the first salary figure quoted to them. And money woes push some to accept a salary that may initiate the compounding effect of lower pay all throughout their lifetimes.

This adds up to a lot of people potentially earning less than is fair.

Pay data laws, growing public pressure, and widespread activism have pushed the issue of pay disparity front and center.

Pay equity is a big deal to lots of people and rightfully so. Getting starting salary right is critical to preventing pay inequity and solving the gender wage gap.

The good news is that state-of-the-art tools can ensure that every starting salary offer is an equitable one-an important step in leading the way to fair pay.

Interested in learning more?