Advice for People Early in their Career

The following is a guest post by FMF reader Mike Hunt. Mike has left several excellent comments on this blog and I asked him to give some career advice of his own in a post.

From observation, a number of people reading this blog are about to start their career or are in the early stages of their career.  Many have received a good education from a reputable school in a field that can be applied in their first corporate job.  In my career I have come across many highly impressive business leaders who did not go to college or even finish high school.  A surprising number of these individuals possessed very strong leadership and analytical skills and have worked their way up through their career making it easy to connect with all levels of employees.  The drawback is that they will have trouble changing jobs because some company cultures require higher education to be considered for a senior level position.  So for that reason it’s worthwhile to get an undergrad degree as well as some higher level education.  FMF has written so much about this and there is a strong correlation with an advanced degree earning more income over a career.  I hold a BS & a Masters from two good engineering schools (Johns Hopkins and University of Virginia) and this has helped my in my career.  That said, I’ve seen a lot of people with many degrees from top universities who are completely clueless about life, have no common sense, and / or have the socials skills of Mr. Bean.  So it stands to say that intelligence, higher education and good skills on the job are slightly correlated at best.

The reason I start this post with education is that when starting a career, the school name, degree and reputation along with the GPA is the first thing an employer will screen for and if you can pass this test you will get an interview.  As long as you come across well in the interview, you will likely get the job. In this market jobs are so tight there will be little room to negotiate unless special circumstances are present. So your best bet is to interview in many places and have several offers of which to make a choice.

One important thing you have to realize in starting your career is that when you start working for a company, particularly a big company, the company is losing money on you.  You heard that right -- you are a negative generator of value.  The reason being is that it takes time to train people to use the company systems (email, procurement, intranet or whatever) and for several months you are getting up to speed to learn the products and players in the organization.  Unless you are in a very narrow specialist role this is usually the case and was with me when I started working. 

For this reason you should do all you can to soak up knowledge like a sponge and do your best to come up to speed quickly.  Also take advantage of this to learn additional knowledge so that you can pick up some transferable skills while being paid to learn this.  Let me give one personal example- when I first started working as a Project Engineer, I had some down time and took out a library book to teach myself to touch type without looking at my hands.  Before this I henpecked with two fingers from each hand.  At first it was slow and awkward to learn touch typing but within 2 weeks I had it down and was flying through typing emails.  To date, it was the single best return on investment for personal productivity.

The reason you should learn as much as you can is the reason the company is so generous to hire and train you is because while you are overpaid when you start working, after a few years you will be underpaid by the same employer.  Unless, that is, you are able to make some quick career advancements (how to do this will be covered in another post.)  So a second key to keep in mind early in your career is how can you learn more that you can make yourself valuable to another employer. Learning skills is one thing, but you also need to contribute to the company and make an achievement that is tangible and measurable and can be expressed in business terms.  For example, you improved the procurement system by changing a paper system to electronic saving $43K per year. It’s important to measure your achievements this way as that is the key to find another job.

The last important thing to look at when starting your career is to plan your first job such that it will progress you to your second job.  When I graduated school I got an offer from the Naval Surface Warfare center in NE Virginia to design the guidance system on a cruise missile.  The drawback is it would take 18 months to get the top secret security clearance and during that time I’d be pushing paper.  18 months is an eternity for someone who just got out of school!  I ended up working for AlliedSignal (now Honeywell) as a Project Engineer, a decision that turned out to be great in hindsight.  The reason is that at AlliedSignal I got trained and certified in Six Sigma and picked up some great project management skills.  Also they had very good training programs – this was under Larry Bossidy who was ex-GE.  They were such a well respected company that working for them is still a great feather in the cap even though 10 years have passed since I left!  If you can, pick a company like this as your first job. You won’t go wrong. 

Two other pieces of advice -- all things being equal, take the job that pays the most money, even if the location is less desirable.  It’s worth it to get the highest base salary early in your career that will only compound provided you manage your career well.  And lastly, even if it pays well, don’t pursue a  job that produces something against your values. For example, I could never work for the tobacco industry because I don’t feel good about getting people addicted to nicotine. Money is nice but there is more to life.

Comments

[MC]

This is excellent, particularly the reminder that the company is losing money on you when you are first hired. The other things I would say that early career employees should keep in mind are

1) Learn to be patient. 18 months is not a lifetime! You may be much better off if you can just suck it up and spend the time. Especially since so many other young people refuse to do this--it's a super easy way to set yourself apart from the pack. 10 yrs from now, 20 yrs from now, you'll still be working on your career and those 18 months will have helped to get you the job/career you want. Invest in that future.

2) Pay attention to the details. Yes it's true that the CEO doesn't bother with the details--but you are not the CEO (yet!). Your main value to the company during your first years in an entry level position is directly related to how meticulous you are--be super reliable and people will start to rely on you--and that's the first step towards becoming a valued employee. Do every single thing that you are asked to, do not forget things you were asked to do, never need to be reminded of things, follow company protocols exactly, take notes, be organized, and show up at work every single day on time & dressed appropriately & interact appropriately with others at work.

[Mike Hunt]

MC,

Good feedback.

I have to disagree with you on the CEO not focusing on the details. Believe me, the devil is in the details and the most effective CEO's drill down to where the details need to be understood and use this to build a competitive advantage in their company. I speak from experience here, although I am acting more like a COO by all fairness. That said, developing a strong team is extremely important. But the CEO who has no awareness of the details of his or her business is either in a very well established business with a strong COO, or is moving the focus to strategy or M&A while the core business is healthy.

-Mike

[Eric Tyson]

Not sure of this "writer's" background but he's way off base on two points. First, companies aren't losing money on folks in entry level positions. Quite the opposite is often the case unless the company does a lousy job in the hiring process.

Second, the advice to take the highest paying job even if the location is less desirable is horrible advice. This totally neglects cost of living considerations as well as quality of life considerations.

- Eric Tyson
Syndicated Columnist
Best-selling author of Personal Finance for Dummies (Wiley)

[Sylvain]

Nice article. I particularly like the last 2 points: go for the highest base salary and don't go against your values. These are, in my opinion, the most important points to consider when you start your carreer.

[neal@Wealth Pilgrim]

Personally, I'd go a different direction.

When you are young, it makes the most sense to take the most career risk. I'd try to be a big fish in a small pong. Look for a small company where you can work along side the top dogs (they don't eat fish....do they?) and soak up their knowledge. Look for opportunities to open your own shop.

This won't work for everyone but I think it's something to consider.

Neal

[Rajeev Kumar Singh]

Always look to build a career rather than just taking up a job... other than money and growth prospects , i would argue one must do something he/she really loves and is passionate about coz only that will ensure you do it well and make good money off it.

[Pat]

I have to disagree about taking the job with the highest pay to start regardless of location.

I had been offered a job to work in a corn processing plant (ethanol, corn syrup, etc.) in Nebraska starting the September after I graduated (Chem E). Meanwhile, I had a temp/contract position at a medical company in my hometown Minneapolis for the summer months. The medical company quickly made me an offer for full-time employment, but at a base salary of 8K less(I made the mistake of letting it slip how much my offer was in NE...). At the time, I was completely torn. The cost of living in NE was quite a bit less than in MPLS AND the offer was less in MPLS, but I ended up taking it because I would have been miserable in Nebraska, and my wife-to-be felt the same way.

It turns out that with benefits and the bonus structure, I ended up making more at the Medical company than I would have in NE AND I saved thousands my first year by living at home with my parents (saved on cost of living). Not only that, but the market is really going to change for ethanol. It is a farce and there would be no profit if not for subsidies on corn and tariffs on cheaper Brazilian ethanol. Also, non-elective medical devices are pretty economically insensitive. The difference in markets was part of my analysis, the bonus structure was not because it was not guaranteed.

Long story short, I believe that everyone has to make the cost/benefit analysis of pay vs. location not only based on pure dollars, but also quality of life and potential industry/market changes. In my case, I weighed the quality of life higher; the additional financial gain was half luck, half market analysis.

[Andy]

I think the point of taking the highest paying job when you are young is to jump start your salary growth for the rest of your life. Location is important, but in my anecdotal experience, first jobs don't last that long in the grand scheme of things. You only have to put up with a bad location or crumby job for a little while and then use that higher salary as a launching pad for future negotiations. Also, I would argue that salary is more helpful than other benefits at that age. Health insurance, life insurance, vacation, sick time, flexibility, etc are all more useful once you have a family.

[Old Limey]

Great article Mike! My working career had similarities to yours. My third and final career move was to a large aerospace company that made it easy for me to get my Masters by allowing and encouraging part time day release to take classes at a nearby university and by paying 75% of the tuition. I stayed with them for 32 years and helped design and analyze the structures of the Polaris, Poseidon and Trident submarine launched ICBMs.

A subject that I would like to elaborate on is that it seems to me that in both America and in my native England where I earned my Bachelors, there is one particular glaring omission in the high school curriculum.

That omission is that there is no mandatory class on "Personal Finance". I received a wonderful education in Science and Mathematics but not one mention was ever made of the practical aspects of managing one's finances during one's working life. As we have found out in the last couple of years it is essential to have a very good understanding of such things as bank accounts, credit cards, loans, managing credit, budgeting one's income, planning for retirement, pensions, social security, medicare, healthcare insurance, 401K plans, IRAs, life insurance, property and car insurance, income and property taxes, investing in the stock and bond markets, the costs associated with raising children, and later on in life, for many people, comes the difficult task of estate planning.

My ex employer offered a very comprehensive class in personal finance to all impending retirees and their spouses. The class was provided by a company that specialized in this field and consisted of lectures and excellent slides and handouts given all day on four consecutive Saturdays. This class was a great help to me.

For all of these important items you are left to figure it all out on your own and if you are educationally underprivileged you are at the mercy of unscrupulous providers of many of these services. In my own state of California, the high school dropout rate is 24% overall and is 40% for Black students and 30% for Latino students. Thus even if high schools were to have a mandatory class in Personal Finance there would still be a huge number of people falling through the crack and later on becoming victims of poor decisions in their personal finances.

Thus it seems that there is no good solution for the problems facing a large percentage of the population, other than learning the hard way at the school of hard knocks.

[seth]

You fail to mention the most important thing for a young person:

1. Spend less than you earn (develop a plan to get out of debt)

[F]

Mike,

Excellent advice - as always!

Choosing one's first job wisely (so that it leads to a great second one) is sound advice for those who know what they'll do. That wasn't entirely the case for me (graduation 2y ago). I decided I wanted to ditch my engineering degree and be an entrepreneur within a company (focussing on growth/profit). However I didn't know exactly what function that meant in practice - so I embarked in a rotational management program. It was a great experience, esp. working with senior management. Still, I plan to start over my career in industry. In a way it's crazy to leave all this behind, but I've decided banking isn't no-nonsense/bottom-line driven enough for me (esp. the support departments I've been in). So, your advice will come in handy. Advice that is, btw, not exactly new to me, but I love the examples from your own (engineering) career (since that's where I'll likely be going).

I'm already looking forward to your follow-up!