Salary History: The New Forbidden Territory

June 15, 2018

Discover if your business is operating in one of the states that has banned questions regarding salary history during interviews. If so, what do you do?

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Picture this – you’re sitting opposite the ideal candidate for an important position with your company. This person fits the bill. They’ve got the right experience and skill set. They would fit in great with the culture. They can start right away.

The stars in the heavens have aligned.

Now, it’s time for the rubber to meet the road. The nitty gritty. The nuts and bolts.

It’s time to negotiate salary.

It may be on the tip of your tongue to say, “So tell me about your compensation package.” After all, you’ve been asking that question for years. It’s been the gold standard in determining market rate for specific job titles. Depending on where your company is located, you may have to adhere to new laws that prohibit asking for a candidate’s salary history.

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Wendy DiMartino,
RPO Project Director with Futurestep

Stop, advises Wendy DiMartino, RPO (recruitment process outsourcing) Project Director with Futurestep, a division of Korn Ferry. She oversees an account and a team of 70 people that hires over 7,000 nonexempt employees annually in the United States and four other countries. Her company has an across the board policy of not asking candidates their salary history.

Salary bans do put the employer at a bit if a disadvantage, she concedes. “One of the gauges in hiring has always been the compensation package. Say I’m interviewing a really strong software developer and I absolutely fall in love with them. I know my salary range is $100-$150K, but they happen to be making $180K. In the past, it was easier to rule them out and do so with transparency by letting them know that they’re outside the offered salary range,” she says. While that statement doesn’t necessarily close the door, it does keep some potential candidates who may be unwilling to take a pay cut from walking over the threshold.

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On the flip side, salary bans can go a long way in preventing income disparity. Women and minorities have been paid significantly less than their white male counterparts for decades. A study conducted by Glassdoor showed that women still earn 76 cents to every dollar a man earns. And that gap widens for black and Hispanic women, who are paid 65 cents and 59 cents, respectively, on the white male dollar.

Consider, too, all the underemployed people who have been building their careers since the Great Recession. Now that the economy is booming, they should be able to get their salaries closer to what they were earning ten years ago. Asking for their salary history can put a big stumbling block in their path, potentially costing them many thousands of dollars in lost income over the course of their careers.

What about putting the salary range out there right from the bat? That can be its own bugaboo, says Wendy. “Candidates, understandably, gravitate to that high number in the range,” she says. “And when you offer them the position at a lower number, they’re disappointed and that can sometimes lead to long term resentment. Negotiations are like a card game—you don’t want to reveal them all at once. You need to know when to flip which card.”

So now what? How does an employer figure out the right salary offer?

“It’s about what the candidate is bringing to the company,” explains Wendy. Instead of looking at what they’ve earned in the past, look at their experience and skill set, at what they’ve accomplished in their last or current position and how that dovetails with the position you’re looking to fill. You know your budget, and you know where you have wiggle room. In the long run, that’s what you have to work with. That might mean you have to knock some candidates off your list. But it also means that you are treating all candidates equitably and judging them solely on who best benefits your company and your goals. 

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