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Why does your first salary have such a big impact on your subsequent salaries?

I heard that this tends to be the case. Why is this?
For tech sector? IME it doesn't really. Interviewers can infer something about you from you current salary when you go for a new job, especially if it is fairly low and you are applying for an advanced position.

In the tech sector, it's common for people to change companies/jobs every 2-4 years, and this can have a huge impact on your earnings. For an example, I worked with a guy who went from a large multinational financial company as a graduate software engineer (not in London) to a small tech company. His income went:

Age 22: Grad software dev, salary 24K(ish)
Age 25: Promoted to software dev, salary 29k(ish)
Age 29: Leaves large multinational when his salary is 33K to join smaller company. Joins startup for £40k a year

Now, that looks solid as his earnings increased by nearly 70% in 7 years. What you have to bear in mind though is that by leaving the multinational he worked at, he was losing several perks (such as child care vouchers, pretty good pension, free gym membership, huge discounts on things like Apple products etc...)
That may not sound like much but it can add up. Hence he was able to negotiate a better salary for himself.

What will restrict your earnings in the tech sector is staying in a company that has no clear job progression or doesn't allow you to move up pay grades every 2/3 years or so (within reason). Talent acquisition and retention in the tech sector is highly competitive, and if you're good (heck, being decent is usually enough lol!) you can definitely increase your earnings way past your graduate salary. It depends on your ability to continually develop professionally, making sure your skills are up to date, and having the bottle to move on from a decent job in order to get out of your comfort zone on occasion.

NB This is based on my observation in the tech sector and based purely on the desire to increase your income. There's also a lot to be said for finding a job/company you love and offers you a good work/life balance too. There's any number of studies that show that once you have enough income to pay all your bills and have an okay quality of life, having additional income beyond that won't make you any happier. So it all depends on what you want really.
(edited 6 years ago)

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