This is the question that we get asked the most by our clients at DigitalGrads: What salary should you pay a graduate?
Our answer is always that it depends on the role type, the industry and the location.
But there are some standard norms that we advise companies, so I’ve put this guide together to act as an aid for setting a junior salary.
When you first create your job spec it’s important that you understand what’s the legal minimum you can pay, you are comfortable with what’s a fair salary, and what’s normal to pay for certain roles in the tech industry.
The legal minimum
UK Employment Law states that all workers and employees are entitled to be paid the National Living Wage or National Minimum Wage at the relevant rate for their age.
The National Minimum Wage for adults aged 21-24, which is what most graduates will be is £7.70 an hour and aged over 25 it’s £8.21 and called the National Living Wage.
This is the minimum you will legally be required to pay an intern or junior in your business, and it’s then up to you to decide if you feel happy with that and if someone who lives in London (as many of our candidates do) can afford to live on that.
The hourly rates above equate to an annual salary of £15,015.00 or £16,009.50 respectively, calculated on full-time hours of 37.5 hours per week.
The Real Living Wage
93% of University students want to work for Real Living Wage employers.
The Real Living Wage, is different from the National Living Wage and is a rate that has been championed by charity – the Living Wage Foundation who DigitalGrads are a supporter of. At DigitalGrads we pay all of our juniors the Real Living Wage and we encourage all our clients to do the same.
The Real Living Wage rates are based on how much people actually need to live. This championed wage rate is different if you live and work in or outside of London. This is to reflect the higher expense of living in London.
The Real Living Wage is suggested for adults over the age of 18 and is £9 outside of London and £10.55 inside London, which equates to an annual salary of £17,550.00 or £20,572.50 respectively, again using a 37.5 hour week.
When might you pay an intern the legal minimum?
We find that it’s more common amongst employers to pay the National Living Wage to an intern or a junior who has very little practical industry experience and who you may be paying to train. If, for example, they are joining you for a 3-month stint to gain much-needed industry experience so that they can put something on their CV to make them more attractive for permanent roles later.
Another instance of companies paying the legal minimum is when they are start-ups and are cash-strapped. Often young people with a desire to work in start-ups and in tech will accept the legal minimum in exchange for the experience of being at the coalface or being employee no 2 in a start-up.
Things to watch out for if you pay the legal minimum
There are two things to watch out for if you pay your junior the legal minimum. The first is the annual National Minimum Wage revision which happens every April.
And the second thing to be aware of is your employee’s birthday - when they turn 21 or 25 they will be entitled to more money.
In both these instances, you could fall foul of employment law and without realising it end up paying your employee below National Minimum Wage which is illegal and could get you a fine.
Common salary rates for different role types
Tech companies tend to hire juniors in two categories: technical and commercial. These salary bands reflect what we see across our clients who are based in London. If you are outside of London you can expect these to be reduced by 10-20%.
Junior technical roles
Commercial / growth roles
Sales development reps
25k basic with OTE £25k-30k
25k basic (these roles can also attract commission or bonus)
Customer success execs
25k basic (these roles can also attract commission or bonus)
These salary rates are our estimates for the role types based on the employers who post roles on our platform and they may well vary across industry types and company size.
Start-ups and flexible working with juniors
We’ve been running DigitalGrads for 18-months now and we’ve spoken to many start-ups who haven’t been able to use our permanent recruitment service because they are so early in their journey that they can’t yet afford a full-time salary, or can’t yet commit to PAYE employment.
Similarly, there are a plethora of recent graduates who don’t yet have enough industry experience for larger employers, and who would relish the chance of gaining some work experience. In the old days, as a recent graduate, you would work for a company for free for a while to gain that experience. That’s what I did when I was straight out of uni, back in 2002.
However, employment law has changed and introduced the National Minimum Wage as we addressed earlier, so that’s not legal any more.
So what if you need an extra pair of hands for a project and you like the idea of helping a young person get their first taste of the working world. You may like to consider taking on a junior on a part-time or short-term
contract. We find that many grads will jump at the chance of working with you.
And that way you are not tied into a permanent employment agreement and don’t have a big salary commitment each month.
Make sure you are aware of the National Minimum Wage rates and the legal minimum you can pay a junior worker.
Choose a wage rate that your business can afford and that you feel comfortable with.
Try to pay the Living Wage Campaign rates if you can, as most university students would prefer to work for a Living Wage employer, and you may just get that bit more commitment from them.
Consider flexible working, remote working and part-time and short-term contracts as they can benefit both parties.
If you need more info on this, hit the web chat bubble to contact us or email firstname.lastname@example.org
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