Employers Shouldn’t Ask For Salary Histories

The first words out of most people’s mouths when I call them about a job are usually “what’s it pay?” And if their first question is about pay, then that must mean money is their main motivation to change jobs. Right?

It is more likely that candidates are tired of spending time talking to recruiters about some “great opportunity” only to find out the pay is too low. Salary sure seems to be at or near the top of the list of qualifications companies consider when they are hiring, so it shouldn’t be surprising when candidates use salary as their first filter to sort through and prioritize job opportunities.

A lot of companies require salary information on applications. It’s also asked in the initial phone screen by the recruiter. If you won’t tell them, you won’t be considered for any job at that company. Yet requesting a salary history does not help qualify a candidate on anything that determines how well they will do on the job. In fact, requesting a salary history sounds a lot like a company is trying to make sure candidates don’t get too much of an increase in pay. Why is that a good idea? That kind of attitude sure won’t improve a company’s reputation or encourage more applicants.

Maybe a company wants a salary history because it is paying well below the market rate and wants to quickly filter out anyone that they can’t afford. Bet that strategy leads to some great hires! Easier I guess than paying people well. Perhaps companies ask for a salary history because they don’t know what they should be paying for a particular skill set and haven’t made any effort to find out.

Here’s a thought: Ask a candidate what they would accept for a job. See what they say. Often people will at that point tell you what they are earning and what they would need to make a move. That is probably a pretty good way of finding out what the market rate is for a particular skill in a specific location. It would certainly be a good way for a company to find out if they are being realistic about the salaries they are offering. Candidates will naturally be more interested in and likely to apply for jobs that pay well. If you are letting everyone know up front what a job pays and no one is interested, that should tell you a lot about the market rate for those skills … no need at all for a salary history.

After all, what possible difference does it make if someone does not want to give out their salary history? All that should matter to a recruiter or hiring manager about a candidate’s salary history is whether or not they are willing to work for the pay being offered for the job they have applied for or been contacted about. An employer should not care if a candidate for a job will be getting a raise or making a lateral move. As long as the candidate knows up front the pay range for the position and has agreed to that amount, what other salary information is really required?

Some people refuse to give out their salary history because they don’t want a potential employer to be biased one way or the other about their current value on the market. If a current or past employer grossly underpaid employees for their skills on the market, they don’t want to be punished by subsequent employers and kept on a low pay scale. There are also reasons that people will make a lateral move or even take a pay cut, and all that information should come out during the interview process.

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What a shame to miss out on a good candidate because they don’t want to give out their salary history. There are not enough qualified candidates to go around for a lot of professions. Companies don’t need to set up artificial barriers to keep even more people out.

 

image from Shutterstock

  • http://www.ultimatesoftware.com Micole Kaye

    Great point here, Charlene. I completely agree. But, I’d actually like to take you’re point one step further. If companies really want to weed out candidates who won’t accept the salary, instead of asking candidates, they should just post a range in the job description. By posting a range, and the criterion for who gets higher/lower salaries within the range should be listed and straightforward. That way, candidates will weed themselves out and won’t waster their time and the recruiters time based on each individual’s financial reality rather than the recruiter’s perception of the candidate’s reality. If people see a job at a salary range they are interested in, let them decide if this would be the right move. This would also eliminate awkward salary mentions in the first interview because by then candidates will already know. Finally, this type of transparency will attract many millennials. Millennials want to know what their getting into from the beginning or feel weary that they might be getting cheated. (Also. Go Knights!)

    • Charlene Long

      Thank you Micole and I agree with you about posting salary information in the job post. I had never thought of including the criterion for being hired at the different salaries for the same job though and think that’s a great idea.

  • http://www.NeoRecruiter.com Eric Putkonen

    Great article, Charlene. I only ask candidates what they would need to consider this opportunity…and go by that. I don’t ask for salary histories. But there is also a lot of pluses to posting the salary range in the job post as Micole Kaye suggested. I wrote an blog post called “Salary Transparency: The Key to Better Applicants?” rencently – http://www.neorecruiter.com/2015/11/salary-transparency-the-key-to-better-applicants/

    • Charlene Long

      Thanks Eric! When I first started recruiting I use to insist on knowing how much a candidate was earning before I would tell them how much the job I was calling them about paid. Seems crazy to me now! I no longer ask for a salary history and only ask people what pay they are looking for and also put the salary in the job post.

  • Chuck Hutsell

    This is a very good article Charlene. You support some good points with a logical argument. One thing to consider with regard to a candidate sharing salary history with a recruiter that is representing them on an opportunity: Just because the candidate shares that salary history with the recruiter does not automatically suggest it will then be shared with the recruiter’s client. What I have found is that by having access to a candidate’s salary history, it opens up the opportunity for me and the candidate to have a very logical conversation around that particular candidate’s “perceived market value” and “true market value”. Most often these values are very close to the same; sometimes there can be some significant deltas between the two – and when that occurs there has to be a conversation around that point to discover why that exists.

    It has been my experience that when a candidate becomes defensive about revealing their salary history, it is either because they have been underpaid in the market (and they know it), or the salary they seek for their next position is far above their true market value (and sometimes they know this too!). Point of fact: A strong level of trust has to exist in order to enter into the type of discussion I am talking about here. Far too often the recruiter does not invest the time necessary to develop that trust before attempting to enter into the discussion. I always inquire about salary history with candidates, but I always respect if they do not wish to reveal that information, and I do not make a decision as to whether to move forward with a candidate based solely on whether or not they wish to reveal salary history.

    • Charlene Long

      Thank you for your comments Chuck. I have noticed also that the two reasons you mention are usually the reasons candidates don’t want to give a salary history. However most people will eventually tell you if you can develop a good relationship with them and they trust you. As long as someone is OK with the salary of the job they are being submitted for I won’t disqualify them even if they choose not to tell me how much they are earning.

  • Glenn Mandelkern

    Salary history is irrelevant. It’s like telling a person who has a budget (e.g., a hiring manager), “Yesterday you paid $7 for a box of detergent. So today, there’s no way you can possibly pay for this $70 bottle of wine. I forbid it based on your recent past!”

    In many other situations, as consumers we ask, “How much do you charge for Service X?” This applies in countless situations whether we need a tire replaced, a party catered, hiring a band for music or redoing a room in our houses either for pleasure or water damage.

    If recruiting is supposed to be a professional endeavor, then talking about prices and expectations can also be done professionally. And consequently, acceptance or rejection of a price can be handled maturely. In fact, some professionals are willing to listen to a situation, an employer’s circumstances and engage in that same practice used to get a reasonable deal with the mechanic, caterer, agent, interior decorator or plumber: NEGOTIATION!

    • Charlene Long

      Thank you Glenn, you make excellent points.

  • Bob Stoufus

    Yet another foolish piece of the oft convoluted and bloated hiring process so many employers thrive on. I once worked with a Tech Architect/SME whose brilliant approach involved spending an hour with each candidate systematically making them justify salary increase on EVERY position in their career. The collateral damages included burning through probably Two dozen very capable candidates and almost destroying the organization’s brand. Finally I was able to leverage C-Level hook-ups to have the fool removed from the process. Once the path was cleared we had tremendous success. It is truly amazing how easily the internal process can sometimes be the client’s greatest obstacle. I will spend ZERO time qualifying a person’s value if their expectation is even close to market parameters.

    RWS

    • Charlene Long

      Thank you Bob for sharing a real world example of this topic.

  • BeeKaaay

    How about actually telling the candidate what the role is paying instead of screening them out based on pay?

    Oh. Can’t do that. That would mean the company would show its hand – as a lowballer.

  • Johnny Le

    If you look for average candidates, then you don’t have to disclose the pay, but if you want top candidates, you should since most top candidates are extremely well paid. It’s like trying to steal a top developer from Google by telling how great the opportunity but not the pay. Money is not my motivation, but I would be a fool to accept less than what I earn, and top candidates aren’t fool either.