Analysts say fresh grads have to 'taper down' salary expectations: CNA

Analysts say that fresh graduates may need to manage their salary expectations amid global uncertainty as wage growth deviates across industries, reported CNA.

CNA cited a Ministry of Manpower (MOM) survey on residents aged 22 to 28, which found that graduates across most disciplines earned less than expected.

Fresh graduates said factors such as workplace environments, career progression, and salaries influenced their decisions to accept job offers.

CNA reported that the MOM's School-to-Work Transition Study found that among university graduates who rejected a job offer, 30.6 per cent did so due to low wages.

26.7 per cent of respondents said they were waiting for better job offers, 11.3 per cent said the job did not interest them, 10 per cent cited unsuitable working environments, and 6.1 per cent noted a lack of advancement opportunities.

Choices reflect cost of living

Professor Lawrence Loh of the Department of Strategy and Policy at NUS Business School told CNA that this reflects the high cost of living.

Loh added that for graduates, it is important to "start at a point as high as possible," as it can be quite difficult to get increments.

Hence, a higher starting point allows for easier upward mobility.

The survey also found that graduates across disciplines were earning less than expected upon entering the job market.

Expectations versus reality

CNA cited MOM figures for average expected and actual earnings.

In engineering sciences, the average expected monthly earnings were S$5,000, while graduates earned an average of S$4,450.

Similarly, for information technology graduates, the expected amount was S$6,000, while what was earned was S$5,150.

The gap was more pronounced in majors such as business administration, where graduates expected S$5,000 but earned S$4,000 on average.

Graduates in the natural and mathematical sciences also saw a gap, with expected earnings at S$5,000 while actual earnings averaged S$3,700.

The only majors that matched or exceeded expectations were law (S$6,500 expected, S$7,500 earned), education (S$3,800 expected, S$4,000 earned), and fine and applied arts, which was exactly as expected at S$3,500.

MOM expects wages to continue rising

CNA reported that MOM expects wages to continue rising, but says companies are more cautious with pay increases due to global uncertainty and inflation risks.

According to CNA's broadcast report, analysts say that graduates have to "taper down their expectations" or face a delay in entering the workforce.

Country lead of recruitment agency Michael Page, Anurag Garg, said candidates may feel frustrated due to a longer job search and may risk missing out on opportunities if their expectations are unrealistic.

Garg said that on the employer side, companies are going after the best candidates and may face higher offer rejection rates, leading to longer hiring times.

Garg added that this could also lead to potential underemployment, where employees are in roles that do not fully utilise their skills.

CNA reported that analysts say employers and graduates will need to find common ground as hiring conditions become more difficult.