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Business and engineering students from the United States will be among the most expensive to hire this year, according to a study from employer branding firm Universum.
The Stockholm-based company released its annual Cost of Talent survey report based on feedback from 580,397 business and engineering university students from 57 countries.
The cost of talent is a key factor in employment considerations and particularly so for companies operating in multiple global markets or thinking about expanding across borders.
"It is important that companies understand the cost of both average and star talent in their hiring markets so they remain competitive," said Dustin Clinard, managing director for Universum Americas, based in the Boston area. "In most cases, talent will not work for a below-market salary simply because of a strong employer reputation. But on the other hand, a strong employer brand can enable a company to pay market salaries and get the best talent in the market."
[SHRM members-only Q&A: What is a compensation philosophy?]
Universum asked the students, "What salary do you expect to earn in your first job after graduation?"
Swiss business and engineering students expect the highest starting salaries from among the countries studied, at $79,000 per year. Respondents also expecting generous salaries include those from Denmark (between $58,000 and $61,000) and the United States (between $52,000 and $63,000).
In stark contrast to the highest-earning nations, Egyptian, Romanian and Vietnamese business and engineering grads expect to earn between $6,000 and $8,000 per year.
Gender Pay Gap
The survey found that men in both fields of study expect to earn significantly more than their female counterparts, although the gender gap in pay expectations varies by field and market. Male business students in the U.S. expect to make about $54,000, while female business students in the U.S. expect to make about $49,000. There is more parity among engineering students in the U.S., with men expecting to make on average about $61,000, while women expect to make about $59,000. Out of the 57 countries that took part in the research, only Kenya, Morocco and the United Arab Emirates were contrary to this trend of men expecting to earn more than women.
"On the engineering side of things, the disproportion in the ratio between male and female talent studying engineering could be one of the key factors affecting the pay gap," said Daniel Eckert, research project manager for Universum. "Despite the increasing numbers of women studying engineering, they are still greatly outnumbered by their male counterparts. Being the majority enables male engineering students to better compare their own expectations to the salaries of their recently graduated peers." In other words, students may be more likely to compare salaries with colleagues of the same gender.
Clinard recommended that employers aim to attract more women in these fields by understanding and offering what female employees frequently report that they want from an employer.
"Show examples of women that have balanced life and work and link the reason your company is making money to a higher purpose," he said. "Work/life balance consistently ranks high with both men and women, and research is showing that a company with a higher-order purpose is driving top female talent decisions."
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