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The Graduate Student Job-Search

The Graduate Student Job-Search. Random Topics and Musings, By Kevin Buell September 19, 2005 kbuell@umich.edu. Life, What Matters To You?. Time can not be created, we can not ‘make time’ Time can not be stored, we can not ‘save time’ All we can do is spend it.

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The Graduate Student Job-Search

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  1. The Graduate Student Job-Search • Random Topics and Musings, • By Kevin Buell • September 19, 2005 • kbuell@umich.edu

  2. Life, What Matters To You? Time can not be created, we can not ‘make time’ Time can not be stored, we can not ‘save time’ All we can do is spend it. How we choose to spend it should represent what matters to us in life. Hours left 7 Days a week = 168 hr/w 168 Sleeping = 56 hr/w 112 (168-56) Average Commute = 5 hr/w 107 Household Chores = 9 hr/w 98 Eating = 9 hr/w 89 Average Work Week = 46 hr/w 43 Total Time for everything else left in your life which matters to you* Approx 43 hours *Parenting your child, brushing your teeth, talking with your wife, grocery shopping, reading a book, religious activities, learning French. Happiness in life basically boils down to two things, Happiness in Love and Happiness in Work. -S. Freud (Paraphrased) American Time Use Survey http://www.bls.gov/tus/

  3. Finding Jobs:Mark Your Calendars! Have your Resume’s & Business Cards Ready! CAREER FAIR • The Twenty First Annual University of Michigan Engineering Career Fair, sponsored by Tau Beta Pi (TBP), the National Engineering Honor Society and the Society of Women Engineers (SWE) will be held on Monday, September 26, 2005 and Tuesday, September 27, 2005 from 10:00 a.m. to 4:00 p.m. • Be an internet stalker and see what companies you are interested in ahead of time! http://www.umich.edu/~engincf UofM CAREER Center • Must submit resume in fall, then if there is a specific job you are interested in you must re-submit- applying for that specific job about 3 weeks before the interviews/recruiters for that company are visiting campus. • IMHO Waste of time, except for following up on companies you like from Career Fair. CONFERENCES • 10 business cards & e-mail addresses • Informational interviewing. RADLAB • Professors/ Advisors • Job Listings E-mail (IE, Rebeiz) • Job Board Announcement Note: This is industry-focused, academia is quite different- and not something I really know anything useful about.

  4. Timing your Job SearchWhen do people get job offers? Number of Job Offers received Per month. From the RadLab Salary Survey. Companies seem to want to make offers between 6-3 months before you can start. They don’t really plan farther ahead than that, and less than 3 months is hard to make happen.

  5. National EE MS & PhD New-Graduate Hires Many More Job Offers reported in April-September than in Oct-March Source: NACE quarterly Reports

  6. Interviews Suck! There are many types of Interviews, and you need to learn to be good at each. • Traditional • Behavioral • Telephone Interviews • Technical • ‘BrainTeasers’ • Selection Vs. Screening For Sample Questions for Traditional and Behavioral Interviews, Review ‘STAR’ Technique, Behavioral & Traditional Interviewing Strategies See: http://www.quintcareers.com/job_interviews.html

  7. Dealing With Offers Qs: Who decides whether to make you an offer? How do they decide how much money to offer? And who can you negotiate with? As: The person who will be your direct manager decides whether to make you a job offer or not. This manager tells the HR people to put together a job offer package. The HR people decide what amount to offer based on a spreadsheet calculation with your degree, experience, cost of living in the area and comparisons of what other companies in the industry are paying, and what other people in the company itself who are of the same ‘grade (IE Engineer level 7)’ are making they get an idea of what the ‘JOB IN PLACE’ costs. Essentially the HR people are asking themselves ‘How much would it cost to hire someone else to do the same job?’ From this information, they create a ‘range’ approximately $10k wide- and they make an offer somewhere in that range. They will not deviate from that range, but with good negotiating you can get your offer to be near the top. They will never tell you the range, and they may not have clearly defined edges- but it exists and they have an idea of what it is before they make you your first offer.

  8. Negotiating 101 Q: What Sort of a Salary Are You Expecting? –DO NOT ANSWER- A1: ‘I think that is a little premature. I don’t even know the job yet.’ A2: ‘Competitive’ A3: ‘You really are in a much better position to know than I am. What do you think?’ A4: ‘I will consider any reasonable offer.’ Once they give you an initial offer, with good negotiating you can probably push it up $3-5k. Q:*Why?* A: Why waste bait on a fish that is already in the boat? • 3 Possible answers to any job offer. • Yes. This ends negotiation. • No. This ends negotiation. • Stall. Always say you need time to think about it! (3 Weeks) • “I was really hoping to accept this job, but this salary is lower than I was expecting. I need time to think about it in comparison to what I could get elsewhere.” Say that you were expecting something higher. Say that you were really hoping to be able to accept their offer because the job is the one that you want- but that now they are making it hard because the offer is lower than you were expecting.

  9. READ A BOOK ON HOW TO NEGOTIATE! • You are already a highly skilled engineer, with thousands of hours of training under you belt. But, your negotiating skills are probably pretty weak. Investing just a few hours in developing this skill will pay off in THOUSANDS of dollars in annual salary. • I recommend the following book for a ‘short and sweet’ introduction. It can be read in one evening, it’s a 5-star book on Amazon.com, and used copies are available for only $0.67. • How to Outnegotiate Anyone (Even a Car Dealer!) (Paperback)by Leo ReillyIt is less than 100 pages, and takes most people less than 4 hours to read.

  10. Comparing Apples and Oranges • The 7 most important factors in evaluating Job Offers • Job Content (30%) – Is this work interesting to me? • Your Boss (20%) – Can I work and get along with this person? • Salary and Benefits (15%) – You like those, right? • Your Co-Workers (10%) – Will I fit in with the corporate culture? • Typical Work Week (10%) – Is travel required? Can I pursue my other interests? • Location (10%) – Do you like the region you will be living in? • Organization Flexibility (5%) – How with this job affect my lifestyle? *Stolen From:www.jobweb.com/Resources/Library/Career_Pursuit/evaluating_jon_75_01.htm

  11. How do I know which job offer is best? Practically, this is not a quantitative problem- but this *IS* a useful way of looking at things sometimes. Theoretically speaking, all your job offers Will form a bell-curve of ‘desirability’ or ‘value’ D=Desirability, aj is weighting of the factor (Ajob content = 0.3), R=0.00 to 1.00 rating of the ‘Desirability’ of the offer in that factor (Ie, Salary offer of $40k = 0.01 Salary Offer of $130k=0.98) Therefore, your offers will have a Mean, and a standard deviation. [Unfortunately, you can’t calculate those until you have at least 3-4 offers.] Your responsibility to yourself is to choose the one that is FOR YOU the best you can get!

  12. Your Job Offer distributions • Your first offer is always your ‘current best offer’ • What are the odds that my NEXT offer will be the best offer? P=1/N [50% chance that job offer 2 will be better than job offer 1. 33% chance than job offer 3 will be better than both 1 and 2.] • The value of getting a new offer then is [Desirability (New Best Job) – Desirability (Old Best Job)] * likelihood that next offer is a new best job offer. • As N-> ∞ you get your perfect job, but there aren’t N=∞ jobs available. • Each offer takes time and energy (cost) to get. In the beginning, job offers are hard to get because you aren’t very good at the job search. In the end, job offers will be hard to get because you will have already interviewed for all the PhD jobs available (consider the situation in academia). • You should STOP SEARCHING when the COST of continuing your search is more than the BENEFIT of acquiring new offers. *Job offers are a random process. If you turn down offer X, offer Y will come around in a couple of months. It may be better, it may be worse. But you WILL get other offers. That is the strength of your position, and you must not fear that ‘no other offer will come’. * The AVERAGE RadLab experience is that people get one job offer for about every 2 months of a job search. BUT, this ranges from 3 job offers in one month, to one job offer in 5 months.

  13. Consider, a sample Job search Goal: I want a job at the top of possible jobs- “For ME” What is the probability (P) that I have found AT LEAST ONE such job, if I only have N offers? 90th Percentile M=.9 80th %ile M=0.8 50th %ile M=0.5 Probability of having at least 1 job offer above your ‘target’ percentile. P=(1-M)^N

  14. Salaries for EE Graduates National Averages: MS $64,416 PhD $80,206 GeorgiaTech: http://www.career.gatech.edu/students/resources/salary_negotiation/ MIT: http://web.mit.edu/career/www/salary/04employer.html UofM: http://career.engin.umich.edu/Annualreport.html National: NACE Reports, from ECRC Stanford: http://www.stanford.edu/dept/CDC/surveys/0405/engineering.html Carnegie Melon: http://www.studentaffairs.cmu.edu/career/employ/salary/cit.html

  15. National avg Salaries for EE Graduates- By Quarter No Clear Seasonal trend in Salaries. SOURCE: NACE

  16. UofM Average EECS Salaries

  17. MIT [PhD, Masters, and Bachelors]

  18. MIT PhD- Salary Range Distribution

  19. MIT Masters Degree Salary Range

  20. MIT Bachelors

  21. Q: Does school rank effect salary?A: Consider the Effect of School Rank on *MBA* Salary *Very little equivalent data available for engineers. See MIT, Georgia-Tech, and National Top-Tier Schools get significantly higher salaries than the national average.

  22. Engineering Rankings 198 Schools grant graduate Engineering Degrees, the top 10 are: # 1 MIT 2 Stanford 3 UC Berkeley 4 GeorgieTech UIUC 6 UofM Ann Arbor 7 USC 8 Caltech 9 CMU 10 Purdue (Source: US News & World Reports: 2005) So, MIT does clearly beat the national averages due to their rank (reputation). But, Georgia-Tech and UofM (as a whole) do not. Luckily, RadLab does.

  23. IEEE Salary Survey (Your Best Friend) http://www.ieeeusa.org/careers/salary/ Estimated annual income for this situation, from base salary and primary sources (base salary plus any bonuses, commissions, or net self employment income):

  24. Comparing Yourself to other UofM Students • Average Journal Papers as 1st author:1.9 (Hi:5 Lo:0+) (+1.2 not first author) • Average Conference Papers as 1st author:2.8 (Hi:5 Lo:0+) (+1.7 not first author) • Average GPA for Doctoral Candidate: 8.05 (Median: 8.14 Hi:8.73 Lo:6.90*) + IEEE/IEE publications w/ advisor for 2001 RADLAB PhD recipients (N=11). * EECS PhD Grads, Fall `04+ Winter `05 (N=24) [I think CS and Systems people are running up the average GPA.]

  25. UofM RadLabGradComm Survey • This means, any given student receiving multiple offers, what is the standard • deviation of the multiple offers received by that single student?

  26. Which are better, California Oranges, or Florida Oranges? Use online ‘cost of living’ calculation comparisons to compare your ‘Effective Salary’ in Job 1 in City A to Job 2 in City B If you earned $80,000 in Ann Arbor Michigan, How much would you need to earn how much to have the same ‘standard of living’ in other cities? Miami, FL $76,882 Albany, NY $79,174 Ann Arbor, MI $80,000 Boston, MA $101,000 Santa Clara CA $104,595 Examples from: http://www.homefair.com/homefair/calc/salcalc.html

  27. Greed, Fear, And LazinessEmbrace your Vices The fundamental principles behind all economics Greed- The desire to receive maximum possible reward for a given investment/risk/or effort Fear- The desire that for a given return, you wish the minimum risk/uncertainty I add Laziness, Laziness- The desire that for a given reward, you would prefer to make the smallest possible investment/risk/ or effort Laziness is just the inverse of greed, or greed stated another way.

  28. A Closer Look atGreed, Fear, and Sloth Greed- When choosing between two similar jobs, choose the one paying more money. Two similar jobs, each requiring about 45 hours of work a week. One for company pays $80k, the other pays $85k. Choose the $85k job! Fear- When choosing between two otherwise roughly equivalent options, choose the one with less risk. $10k starting bonus, or $10k value in stock options. Choose the starting bonus! Choosing between one job offering a starting salary of $88k, and one which offers $76-90k, take the $88k! Sloth- When choosing between two jobs with similar rewards, choose the one requiring less time investment. Two similar jobs, each paying about $90k. At one company, everyone works 42.5 hours a week. At the other, everyone works 52.5 hours per week Choose the 42.5 job!

  29. Real-World Examples • GREED- Obvious • FEAR- Company A offers $95k/year. Company B offers $90k/year, but says that “There is no limit to how much you can earn here. Just come and prove yourself, and you will get raises.” Choose company A. Do you believe that if you were a high performer at company A, that you would NOT get raises? • SLOTH- Defense industry company pays $90k (42.5 hours/week). Computer industry company pays $98k (52.5 hours/week). Choose the defense job. The other only pays 9% more money, for 24% more work. Remember: Greed is what allows you to feed your family, Fear is what allows you to protect your family, and Sloth is what allows you to share your life (spend time) with your family.

  30. Comparing Salary VS Signing Bonus. • Choosing between salary or starting bonus, consider the following: • To compare them, consider if you took the starting bonus- and invested it in a stock market index fund (r=10% return) then took annual ‘dividends’ out of it over the period of your career (n=25 years). • That annuity will pay out an annual value that has an equivalent affect on your salary would be. The Annuity Formula Rule of Thumb $100 in annual Salary=$1,000 Signing bonus http://www.moneychimp.com/calculator/annuity_calculator.htm

  31. The value today, of money tomorrow (IE ‘Vesting Bonus’s’) • For calculating the value of a retirement plan, or a signing bonus that needs 5 years to ‘Vest’. • The current value (Present Value, PV) is related to how much money you will get in the future (FV) in year ‘n’, given an ‘equivalent-risk’ rate ‘r’. • Note, picking the right ‘r’ is quite complex- This is why finance majors go to college. But, here are some ‘rules of thumb’ • EXTREMELY LOW RISK: Use the ‘r’ of ‘US Treasury Bill/Note’ for a similar time period (3.4% for 6 months, 5.3% for 30 years) • LOW RISK: Use the ‘AAA Bond Rate’ (4.5% for 5 years, 5% for 10 years) • MODERATE RISK: the historic average stock market return, 10.5% • HIGH RISK: use the historic average stock market return for small-companies, 17.5% http://www.moneychimp.com/calculator/present_value_calculator.htm

  32. Valuing Stock Option • How much are my stock options, which ‘vest’ in 5 years, worth? Should I get a signing bonus instead? • Learn the Black-Scholes Option pricing Model.  http://www.margrabe.com/OptionPricing.html • Rule of Thumb :Math is hard. Look up what other people are paying for it. That’s what it is worth!

  33. Call Last Bid Ask Chg OpenInt. Vol Strike Put Last Bid Ask Chg OpenInt. Vol .WNLAC 14.00 13.90 14.50 0.0 1256 0 15.0 .WNLMC 0.00 0.30 0.45 0.0 177 0 .WNLAD 8.80 10.20 10.60 0.0 1269 0 20.0 .WNLMD 0.95 0.90 1.05 -0.1 4084 0 25.0 .WNLME 2.20 2.00 2.30 0.1 2092 8 .WNLAE 6.70 6.60 7.00 1.0 3427 0 .WNLMY 3.00 2.80 3.20 0.0 1965 0 27.5 .WNLAY 5.20 5.20 5.60 0.0 1333 10 .WNLMF 4.30 3.90 4.30 -0.2 1922 0 30.0 .WNLAF 4.00 3.90 4.30 0.1 3200 18 .WNLAG 2.25 2.10 2.50 -0.1 1126 6 .WNLMG 7.30 7.10 7.60 -0.6 1209 7 35.0 Stock Option Value II Look Up Price of “CALL OPTIONS” on one of the many market-quote sites. http://www.schaeffersresearch.com/streetools/options/option_montage.aspx Probably: Your stock options will be ‘Call’ options, with a ‘strike price’ equal to the stock value on the day that you start work. To find out what they are worth, find out when they ‘vest’ (you can sell them), find the quote for option prices set for that time range, find the right ‘strike price’ then see what the ‘last’ value was for the call options.

  34. Medical Insurance, Dental Insurance, and the Company Gym • These really don’t matter. All companies have Medical, Dental, etc insurance. • And although some are better or worse than others, it takes a *LOT* of work to figure out which is better for you, and even then- the difference is small. Ex, good health insurance is worth about $1750 per year, bad ones are worth $1250. • Exception: Gymnasium with pool on-site at work, or great free cafeteria on-site. This might make your life happier, and is worth more than the $.

  35. But, I still can’t decide! • The Indifference Theorem If, after all is said and done- you are having a very hard time deciding whether you should accept job A with traits X,Y and Z. or job B with traits L,M, and N. It probably doesn’t matter which you choose. If one choice was clearly going to make you happier, you don’t have trouble deciding. If you are REALLY having trouble deciding, it is because they are of similar overall value. Neither one will probably make you much happier than the other. Example: Job A has a better location more than Job B, but Job B offers more ‘time off’ which I enjoy a lot. If you can’t decide, it is probably because those are of about equal benefit (value) to you.

  36. Earnings Years After Graduation

  37. I’m rich, and yet- I feel broke. Single, Earning $80K, Living in Greater Metro Detroit Mi • The average household income in the US is $30,000. • I know a family of 4 that lives on $12,000 per year. • Why do I feel so poor? • The average american pays just over 50% of his income in taxes. [Federal Income, Social Security, State Income, Property/Schools Tax, and then Sales tax on whatever is left] *Median Home Costs www.realtor.org/research.nsf/pages/MetroPrice Mortgage Calculator www.bankrate.com/gookeyword/calculators/mortgages.asp *As a rough rule of thumb, most home buyers purchase houses that cost between 1 1/2 and 2 1/2 times their annual income. –OR- 25-30% of ‘take-home’ salary (after taxes)

  38. Ponderings on what that means… • Your home is your single largest investment. You save 2x as much in your home each year than anywhere else. • Renting is stupid if you will be in the same place for more than 5 years. • In the last 5 years, nationally homes have appreciated 49.67% [8.4% annually]. But location makes a huge difference. California 5-yr avg = 102%, in Texas- 24%. (Dow Jones = 10%) A ‘Small” shift in earnings can have a large shift in your life. Earning $91.2k instead of $80k allows you to save $16k (after taxes), instead of $8k. This doubles your savings, and allows you to retire at age 58 instead of 65 Math: $8k annuity, 10.5% interest, 35 years. Final Value = $2.6M -OR- $16k annuity, 10.5% interest, 28 years. Final Value = $2.6M

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