Salary

While the term "wage" refers to payment according to the work hours, the term "salary" refers to a regular monthly amount which is paid irrespective of the number of work hours.
Nevertheless, the salary is also made up of different parts, such as:

• Basic salary: regular monthly salary
• Holiday/Christmas bonus: Special payment paid on a certain annual or monthly date.
• Overtime/weekend/night extra pay: Special payment due for additional work performed or work performed outside regular working hours.
• Performance-related bonus: special payment paid for special personal performance; often linked to the achievement of predefined personal goals.
• Profit sharing: special payment linked to the economic success of the employer.
• Capital-forming benefits: Savings bonuses paid by the employer, e.g. payment into a savings contract.
• Special benefits: Benefits that go beyond a purely monetary payment, e.g. company kindergarten, use of a fitness studio, mobile phone/laptop with private use, employee discounts. 

A special form of salary is the "target salary". This consists of a guaranteed basic salary and a variable amount that is paid out depending on the achievement of objectives. The guaranteed salary can be significantly lower than the maximum salary that can be achieved. For this form of salary, therefore, only the guaranteed salary should be compared with any alternative offers in order to rule out the possibility that own expenses will not be covered if the relevant objectives are not or only partially achieved.
In addition to salary, you should also consider other general conditions such as working hours/work/life balance, area of responsibility, further training and promotion opportunities. Such factors can be of varying importance for different people. When looking for a job and defining your salary expectations, you should therefore consider which (further) conditions are important to you personally.
 

In order to determine your desired salary, you should first determine your personal budget. This consists of a minimum budget and a "comfort budget". The minimum budget includes your regular expenses. Please note that these may increase after the end of your studies, e.g. due to insurances, missing student discounts (e.g. semester ticket) and changes in lifestyle (e.g. moving out of the dormitory).

The comfort budget includes other expenses that you want to be able to afford after you finish your studies (vacations, free time activities, etc.) The sum of these two components forms the basis for your desired salary. In most cases this is lower than the actual expected salary.

In the second step, you should therefore determine the salary to be expected for the respective position on the basis of the job description and further research (see below). This is the basis for your negotiation goal. 

Factors influencing the salary

A number of factors in the job description can already have an influence on the expected salary:

• Region: On average, starting salaries in the south and center of Germany are higher than in the rest of the country. 
• Sector: As a rule, starting salaries in industry or the financial sector are higher than in areas such as leisure, culture or education.
• Company size: On average, the larger the company, the higher the salaries.
• Field of study: Graduates in fields such as medicine and engineering can expect a higher starting salary on average than, for example, graduates in the humanities.
• Degree: With a higher degree (Master's/PhD), the expected starting salary usually also increases.
• Occupational field: In the case of subjects that can be pursued in various fields, the occupational field also plays a role. 
• Position: Requirements for the position such as relevant work experience and its contents such as management or budget responsibility as well as a higher proportion of business trips can increase the expected salary. 

In addition, information that is usually not found in the job description can also influence the salary. You should research this separately if necessary:

• Economic situation: The overall economic situation, the situation in the industry, and the individual situation of the company (for example, the number of orders) can have a positive or negative effect on starting salaries.
• Gender: If you find in your research different salaries according to gender, the negotiation target should always be based on the salaries paid to men.

Research: Salary without tariff contract

You can find specific starting salaries, for example by researching suitable websites. You can also obtain relevant salary data by talking to fellow graduates, colleagues, friends and family members in similar positions or in the same industry.
When doing your research, you should take into account the influencing factors from the job description as far as possible. You should also check whether the salaries listed are average salaries with work experience or starting salaries.
Include several sources in your research and then determine the average from the salary data. This gives you a realistic estimate of the salary you can expect in the position in question. Depending on your qualifications and the desired scope for negotiation, it may be useful to add a bonus (approx. 5-10%) to this amount. 

Research: Salary with tariff contract

Tariff contracts are agreements that are usually concluded between employers and trade unions. In addition to salary structures, other working conditions such as weekly working hours and holiday rights are also defined. Whether a Tarif contract and, if so, which one, applies to a particular job can usually be found out either directly from the job description or by searching the Internet.
On the employer's side, each job is assessed according to predefined criteria or a points system within the framework of the tariff contract and thus assigned to a pay group. Graduates are usually assigned to fixed starting pay groups, which can also be determined via Internet searches. In the next step, you can determine the salary expected for this pay group using the relevant pay table. Make sure that you use the pay table for the relevant federal state (location of the job), since these can differ in some cases within a tariff contract. 

Example 1: Tariff contract of IG Metall - metal and electrical industry

The IG Metall tariff contract for the metalworking and electrical industry assigns pay groups 12 and 13 to job starters in Baden-Württemberg, then the monthly salary can be read off from the corresponding salary table and thus the yearly salary can be calculated. Which of the two levels is applied in a specific case depends, among other things, on the above-mentioned factors, such as degree. In addition, special payments and (performance) bonuses can be added. (Source: IG Metall)

Example 2: Tariff contract of the IG Bergbau, Chemie, Energie trade union

In the tariff contract of the IG Bergbau, Chemie, Energie (Mining, Chemical and Energy Industrial Union), Job starters are part of the pay group 11. Here too, any special payments and bonuses may be added. (Source: WSI salary archive)
 

If the job description explicitly requires you to state your salary expectations in your application, you should do so. It is best if you state your desired salary at the end of the cover letter. The following tips apply here:

• Provide exact details: For example, include the weekly working hours corresponding to the desired salary.
• State a concrete number: In the case of a salary range, there is a risk that the lower figure is automatically taken as the reference value.
• Specify the amount: For example, instead of 50,000 €, an amount of 51,500 € might give the impression that the number has been thought through.

Example formulation: "...I am available from 01 January 20xx. My salary requirement is 48,500 € p.a., including special payments at 40 hours per week. "

In Conversation

If there are several rounds of interviews in the application process, the topic of salary is usually only addressed in the last interview. Especially in the first interview you should not ask about it on your own initiative.

If you are asked about your salary expectations in a first interview (e.g. also a telephone/Skype interview), you can usually state them without further explanation.

If the salary issue is not discussed in the last interview either, you can ask whether the salary issue will be addressed today or whether a further interview is planned for this purpose.

Tips & Hints

• The risk of not being considered further in the application process if the salary is too high is rather low. In this case, most employers will contact you and inquire about your willingness to negotiate. Only if the difference between the desired salary and the average salary is too high could this lead to exclusion from the application process. Through careful research, as described above, you can avoid asking for an unrealistic high salary.
• Often (even smaller) companies have set certain starting salaries, so that you do not have to worry too much about receiving an unfair salary. 
• Nevertheless, you should avoid stating an unusually low salary expectation. On the one hand, there is the risk of actually receiving less than the actual starting salary in this case. On the other hand, under certain circumstances, a negative impression may even be created on the part of the potential employer, as it could be assumed, for example, that you have already received many rejections in the previous application process, or that you have not prepared yourself sufficiently for the application or interview. However, this can also be avoided through targeted research.

Preparation: collecting arguments

After analysing the job description and researching relevant salary data, you should have a solid basis for your salary negotiations. However, the most powerful arguments for salary negotiations relate to yourself. You should therefore keep the following questions in mind right from the start:

• What are my professional strengths and specialisation?
• What practical experience have I already gained?
• What are my strengths and talents?
• What examples can I provide to prove my knowledge and skills?

When preparing for a salary interview, you will then adjust these individually for the specific position:

• Which of these talents, knowledge, and experience are relevant to the position and will be of benefit to the company?
• Which characteristics make me a better candidate for this position than other candidates? 

Preparation: Who negotiates?

In most cases, representatives from human resources and specialist departments are involved in salary negotiations; in some cases, e.g. in smaller companies, the management may also be involved. The possible salary range is usually not determined by the HR department alone, but in consultation with the management and/or the specialist managers.

In addition to budgets and influencing factors as mentioned above, salary structures within the company are usually also taken into account. In the salary discussion itself, there is therefore often little room for negotiating. In order to be able to push through higher salary demands, very good arguments may therefore be necessary - also to represent a higher salary to other internal people involved. 

Tips for negotiating 

Argumentation

• Arrange your arguments logically:

1. Pay attention to the phrasing of the question: Is an explanation already asked for at this point or is it simply a matter of finding out your desired salary - without evaluation?
2. When asked, present your arguments (step by step)

• Show that you are well prepared for the negotiation and know your market value.
• Base your arguments on personal skills and knowledge and back them up with examples (see preparation). Own expenses (buying a car, high rental costs etc.) are not valid arguments.
• React confidently to stressful questions by presenting your objective arguments.
• Also ask about additional benefits and working conditions and take these into account when making your decision.
• If you receive an offer, it is advisable to ask for a period of reflection for the decision, so that you can weigh up all the conditions again in peace. Especially if the offered salary (strongly) differs from your desired salary, you should make use of this possibility. 

Behaviour and body language

• With direct eye contact as well as a firm voice you show yourself confident. However, avoid appearing arrogant, e.g. through a lack of willingness to negotiate or non-objective argumentation.
• Remain polite and objective even under pressure and when faced with critical questions.
• Do not show excessive gratitude when you have achieved a negotiation goal. Your future salary will be paid to you in return for the services you have provided, which also benefit the company.
   

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The salary does not only concern graduates, but also accompanies you in your further professional life. Below you will therefore find some initial tips for salary interviews after your career start.

• When changing jobs, you should aim for a higher salary. Depending on the position, the difference to your previous salary can be up to 20%.
• If you would like to negotiate a higher salary within your current job, possible increases are usually significantly below this percentage. As a rule, however, a salary increase in the current job is more common than a job change. Over the years, this difference usually evens out.
• Every one or two years, it is appropriate to seek the salary interview. Too frequent demand tends to lead to a negative attitude.
• The first person you should approach for a salary interview is your direct supervisor. If you go directly to the next higher-level manager, your direct manager may feel left out, which can have a negative effect on the negotiation.
• Make an appointment in which you and your counterpart have sufficient time to discuss your concerns. A good opportunity to address the topic of salary is, for example, the annual employee performance review, or if you have just successfully completed a project.
• During the salary interview itself, it is a good idea to first obtain feedback on your own performance. If this is positive - which is a requirement for asking for a higher salary - then you have your first argument for the negotiation. 
• In addition, you should prepare your (further) arguments in advance, namely your own performance and achievements for the company. You should also show that you do not intend to rely only on your past performance, but are willing and motivated to develop further and take on more and more responsibility.
• Familiarise yourself with the economic situation of your company and the industry in advance so that you can react to rejection with further reasonable counter-arguments if necessary.
• The same applies here as at career start: State a concrete number. In this way you show that you have thought about it and know exactly what you want.

Finke C., Touil, S., Straub, J. & Theis, K. (2017). Verdienste auf einen Blick. Statistisches Bundesamt (Destatis).

Hesse, J. & Schrader, H. C. (2005). Das 1x1 der erfolgreichen Bewerbung: perfekte schriftliche Bewerbung; überzeugendes Vorstellungsgespräch; geschickte Gehaltsverhandlung. Frankfurt am Main: Eichborn.

IG Metall (2019). Einstiegsgehälter für Absolvent*innen 2019/20. Informationen der IG Metall für die Metall- und Elektroindustrie.

Püttjer, C. & Schnierda, U. (2009). Souverän im Vorstellungsgespräch. Frankfurt am Main: Campus Verlag.

StepStone Deutschland GmbH (2017). Gehaltsreport 2017 für Absolventen.

Wirtschafts- und Sozialwissenschaftliches Institut (WSI) der Hans-Böckler-Stiftung (2018). WSI-Tarifarchiv.