Confidence-building first jobs linked to 24% higher salary by mid-30s, report finds

• New research categorises first jobs into 5 types – accelerator, stepping stone, comfort trap, underemployment or low-mobility – to understand the long-term impact of someone’s first role.

• One in eight first jobs were ‘accelerator’ roles, with the same proportion starting out in ‘low mobility’ pathways. 

• The report calls on Government to introduce a voluntary ‘Good First Job Guarantee’ scheme with employers, as the research finds positive early career experiences are associated with salary premiums by someone’s mid-30s.

First jobs that give young people confidence and skills to take on greater responsibility can deliver greater earnings premium later in their careers – yet access to the best jobs is still sharply unequal – according to new research by the Social Market Foundation (SMF), supported by PwC, and based on polling of 3,000 UK adults conducted by Focaldata. 

Findings show that while background matters, it is not the whole story. Even when accounting for characteristics including socio-economic background, the nature of the first job – adequate support, routes to progression, confidence-building, good mentorship – makes a noticeable difference to later-life earnings, for both graduates and non-graduates.

Jobs that built respondents’ confidence and readiness to take on more senior work were associated with 24% higher future earnings by someone’s mid-30s. Those who received informal training or formal mentorship both had around 8% higher earnings. 

The SMF research categorised first jobs into five types: 

• accelerator pathways, which provide strong support, training and progression; 

• stepping-stone pathways, which are imperfect but still useful platforms; 

• comfort-trap pathways, which are stable but limiting; 

• underemployment pathways, where people feel overqualified or underused; and 

• low-mobility roles, offering little support or development.

Those whose first job gave them strong support, training and a clear route to progress went on to earn an average of £55,000 by age 35, compared with £28,000 for those who started out in a "low-mobility" role – a gap of roughly £27,000. Those whose first job was a "comfort trap" (stable but with little opportunity to develop) fared only slightly better, earning £30,000 on average.

One in eight (13%) had a first job that was an accelerator role, while the same proportion ended up in low-mobility roles. The largest group, almost 3 in 10 (29%), were in stepping-stone roles. Unsurprisingly, graduates, people from more advantaged backgrounds and those who attended private school were more likely to land accelerator or stepping-stone roles, while non-graduates and people from working-class backgrounds were more likely to start out in low-mobility or comfort-trap pathways.

The report comes at a time when addressing the rising numbers of those not in education, employment or training (NEET) remains a top priority. The new Burnham government has already made headlines for introducing measures like a £3,000 in a youth jobs grant and updated employment-focused rules for firms wanting to win government contracts. However, the focus remains on getting people into work, and less so on ensuring that the first step of someone’s career is the best possible one. In fact, someone's first job is very a vulnerable time for them in the labour market, and the potential risk of them becoming NEET is quite high if they have a bad experience – 4 in 10 NEETs have had a job.

The SMF research surveying those aged 20-40 about their first “proper” job, and the older respondents gave insight into mid-career returns. Using this, researchers at the SMF were able to model to what extent various aspects of a first job – background, pre-work opportunities, first job features and experience – are associated with mid-career earnings. 

The report’s central recommendation is for the government to work with employers, trade unions, combined authorities and youth organisations to establish a voluntary Good First Job Guarantee – a minimum standard for what a first job should offer, including fair pay and secure work, a proper induction, a named line manager, structured training, regular feedback, mentoring and clear progression conversations. This should be a voluntary standard setting out the minimum developmental offer that young workers should receive in their first proper job.

Dani Payne, Head of Education and Social Mobility at Social Market Foundation, 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. 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.”

Marco Amitrano, Senior Partner of PwC UK, commented:

"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.” 

Notes

1. The SMF report,The first rung, will be published at https://www.smf.co.uk/publications/first-job-later-life-impact/ on Monday 7th September at 5 AM.

1. Research methods:

1. The quantitative analysis is based on polling of 3,000 UK adults, with survey work conducted by Focaldata. The sample was split, with half of respondents aged 20-25 to provide insight into current and most recent labour market experiences and half of respondents aged 35-40 to give insight into mid-career returns.

1. Alongside the polling, the SMF conducted 200 qualitative interviews using a purpose-trained AI chatbot, also via Focaldata. 

1. The report is supported by PwC UK. The SMF retains full editorial independence on all its publications and outputs.

About the Social Market Foundation: The Social Market Foundation (SMF) is Britain’s leading cross-party think tank. Our mission is to enable markets and government to work together to benefit society. We achieve this through the development of high quality, independent and pragmatic public policy research and debate across a wide range of social and economic areas.