How your first job can determine what you earn for the rest of your career

Do you remember your first job? Whether you spent your time making tea or being prepared to be a corporate high-flyer, it was likely a vital leg up for your career. Now, as Britain faces a NEETs crisis, new research shows just how much the nature of your first job can make a real difference to your earnings later in life.

People who start out in roles that provide strong support, training and progression opportunities earn 24% more than their peers by their mid-thirties, according to research by the Social Market Foundation (SMF). 

SMF categorised first jobs into five types, ranging from accelerator pathways at the higher end down to low-mobility roles at the bottom.

Those who start off in an accelerator pathway role go on to earn an average of £55,000 by age 35. This is compared to just £28,000 for those who started out in a low-mobility role – a difference of roughly £27,000.

Dani Payne, head of education and social mobility at SMF, said: “For too long, we have treated getting a young person into any job as the end goal. But a first job should do more than provide a pay cheque: it should give them the skills, confidence and opportunities they need to build a career.

“Our research shows just how much that first experience can matter. The right job can put someone on a path to progression and substantially higher earnings; the wrong one can leave them stuck at the starting line. But access to those opportunities is not shared evenly.

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“Too often, the young people who stand to benefit most from a high-quality first job are the least likely to get one. Instead of helping to close inequalities, the first rung of the career ladder can end up widening.

“Government and employers now need to rebuild the youth employment social contract, so that every young person can expect their first job to be a springboard rather than a dead end.”

As Britain faces a crisis with almost one million young people out of employment, education or training, the think tank’s report, which was supported by professional services network PwC, argues that not just any job will do.

Researchers found young employees who are offered support, training and progression opportunities benefit from a confidence boost and are better prepared to take on senior roles.

One in eight people quizzed as part of the report started their career in an accelerator role, which were associated with higher starting salaries, faster pay growth and substantially higher earnings by age 35.

But the same proportion ended up low-mobility roles, characterised with low support, weak development and limited routes forward. They might be more commonly referred to as dead-end jobs.

Most people – three in 10 – found themselves in stepping-stone roles.

Perhaps unsurprisingly, graduates, privately educated people and those from more advantaged backgrounds were more likely to land accelerator or stepping-stone roles. Non-graduates and people from working-class backgrounds were more likely to find themselves in low-mobility or comfort-trap roles, described as stable or tolerable but offering limited growth.

SMF and PwC have called on the government to establish a voluntary good first job guarantee by working with employers, trade unions and other organisations.

Prime minister Andy Burnham has already vowed to introduce measures such as a £3,000 grant for youth jobs and updated employment-focused rules for firms wanting to win government contracts. Meanwhile, a new scheme is set to offer 18-24 year olds work experience with retailers including John Lewis, Currys and Costa Coffee by the end of the current parliament.

Yet the SMF report warned against a focus on getting people into work at any cost instead of ensuring that the first step of someone’s career is the best possible one.

Marco Amitrano, senior partner of PwC UK, said: “Getting more young people into work is critical but as important is giving them the confidence and skills to continue up the career ladder. 

“Not every first job will come with a clear progression route or turn into a career for life. But every job can give someone the chance to learn and build skills they can take with them.  

“The stark differences in people’s first experiences of work can shape careers and earnings for years to come. Helping more people start well, progress and fulfil their potential, means more skills for business, higher earnings, and ultimately stronger growth.” 

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