55k is a good salary in Boston
Salary 2014: "At the age of 30 you decide who has a career"
Significantly higher expectations of graduates with the same salary
How have salaries developed?
Conrad Pramböck: A distinction has to be made here between the income of graduates and general development. The starting salaries of the graduates have remained relatively stable over the past 10 to 15 years. On the other hand, prices have increased significantly. Furthermore, the requirements of the companies have increased relatively sharply. I've been in the business for 16 years now, and in my time, every graduate student had a job pretty soon. Today graduates are expected not only to have a master’s degree, but also to have several part-time internships, to have professional and international experience and to speak perfect English. All of this makes it much more difficult for young people to enter professional life.
"Young people can make a career much faster these days"
Is there also a ray of hope for today's graduates?
Conrad Pramböck: Yes, there is. In fact, the salary increases for top people are significantly higher than in my time. This means that young people can make a career much faster today. If I'm in an age group around 30 years old and good, I already earn between 40,000 and 50,000 euros gross per year. So there are very interesting salary increases and career developments possible.
In which industries do graduates earn the most?
Conrad Pramböck: There are very large differences in salaries between but also within the industries. Pharmaceutical companies or the oil industry, for example, pay particularly well; on the other hand, there are social enterprises, retailers and the construction industry. Tourism also pays very poorly. To prove the whole thing with figures: Starting salaries for academics in the social sector are around 25,000 euros gross per year, on the other hand, large management consultants such as the Boston Consulting Group or McKinsey pay over 60,000 euros for master’s graduates. So there are huge industry differences here.
Masters graduate earns between 30,000 and 40,000 euros
The top graduate who earns the most: what does he look like?
Conrad Pramböck: These are the aforementioned management consultants and investment bankers. They are at starting salaries of up to 60,000 euros gross per year. That is far from the average, which is between 30,000 and 35,000 euros for master’s graduates. Anyone who earns over 40,000 euros is already very well paid if they have no professional experience. The third option for earning a lot in the long term is in the technology sector. Top people earn between 40,000 and 50,000 euros when they start their careers.
"In the first two to five professional years, careers are mostly similar"
How do the graduates react to this situation?
Conrad Pramböck: It just takes a few years for a graduate to have enough practical experience in addition to his theoretical knowledge. For many people in their early 30s, it is how their careers develop. Some say that working life doesn't interest me that much anyway, I'd rather have more free time and be content with earning a little less. The question of children also plays a role here. Then there is the group that finds joy and fulfillment in their job and then pursues a career as a highly paid specialist or manager. In the first two to five years of work, careers tend to be very similar and in a well-regulated manner, from the age of 30 the gap then goes apart.
"We are fine, but not great"
How are salaries in general?
Conrad Pramböck: In general, salaries increase by an average of three to four percent per year. That is in the middle range. In the boom years between 2006 and 2008 the average increase was over five percent, on the other hand in the crisis years of 2009 you could be happy to get a raise at all. Our surveys have shown that 80 percent didn't get a raise at all this year, but were happy to have a job. So we're in a phase where things are going well, but not great.
What is your forecast for the future of salaries?
Conrad Pramböck: I am currently positive. When I ask around about how companies are doing, there are several developments. On the one hand, of course, the cost pressure across all industries is extremely extreme. In most companies, personnel costs are the largest block that is particularly in the focus of cost reductions. On the other hand, the best people are in demand at all times: whether in times of crisis or in times when the economy is doing well.
Which industries are doing well and which are less?
Are there any industries that have developed particularly well in recent years?
Conrad Pramböck: It has become particularly difficult with banks. In my opinion, insurance companies will also tend to be characterized by downsizing in the coming years, even if they are now feeling even less of it. In the case of industrial companies, it depends very much on the company in question. It is generally difficult in the media sector because the industry is currently in a state of upheaval. Things are going well for business consultants, for example, but also for the oil industry.
About the person: Conrad Pramböck
Dr. Conrad Pramböck is an expert on salary and career issues at Pedersen & Partners. He advises companies around the world on the subject of salaries and is a lecturer at various universities and technical colleges on salary and personnel issues. He is the author of the book “Jobstars” and author of the weekly columns “Career Paths” and “Salary Concrete”.
Photo credit: Dr. Cloud / source Shutterstock, Pedersen / Partners, Greg Epperson / source Shutterstock, vasylshepella / source Shutterstock, Emeraldchik / source Shutterstock
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