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HR POLICIES & PRACTICES
Dec 4, 2012

Does a candidate's salary history matter?

While candidates can refuse to answer questions about salary history, such information can be useful to employers
    

By Brian Kreissl

According to Nick Corcodilos, a well-known recruiter, author and blogger, an individual's salary history is confidential and is none of an employer's business. He believes candidates are well within their rights to refuse to answer questions about their current or previous salary.

Corcodilos also claims he has never heard a reasonable reason from an HR executive explaining why they need to know a candidate's salary history before hiring them.

While I understand and agree to a large extent with his opinion — at least from a candidate's perspective — I can think of at least three reasons why a candidate's salary history could be relevant to a prospective employer. The first has to do with ensuring both parties are on the same page in terms of their expectations, the second has to do with career progression and the third relates to retention.

From a candidate's perspective, it's absolutely true that salary expectations are confidential. And candidates are completely free to refuse to divulge their current or former salaries.

But, conversely, employers don't have to be happy with that answer either. Many recruiters would see a candidate who refused to divulge compensation details as being unco-operative. In fact, when I worked as a recruiter, on the couple of occasions it did happen to me, I was a little taken aback by the refusal. Any refusal to answer a question in an interview is going to feel somewhat awkward, no matter how polite and reasonable the refusal may seem to the candidate.

On the other hand, not all employers ask candidates about their current or past salaries. For example, when I was interviewing for my current job, while I was asked what my salary expectations were, I wasn't asked to reveal my current or previous salaries.

At the time, I was a little nervous about answering questions about salary expectations because I knew I was being paid less than what I really should have been earning at the time. Because of that, I was actually relieved not to be asked what I was earning in my last job.

Ensuring candidates and employers are in the same ballpark

While I have some sympathy for a candidate not wanting to divulge her salary history, compensation has to come up at some point during the interview process. If the candidate and the employer aren't in the same ballpark with respect to compensation, there just isn't going to be a match.

There’s simply no point in wasting everyone’s time if the candidate is looking for $90,000 and the job only pays $40,000. For that reason, a candidate’s current salary is relevant to the discussion.

While an employer can simply ask the candidate’s salary requirements, recruiters usually won’t get a true feel for someone’s level unless they find out their current salary. Let’s face it, many job titles and accomplishments listed on resumés are highly inflated, so a person’s salary might provide the type of additional insight needed to help figure out if the person is ready for the responsibility of the job in question.

Many people argue a person’s current salary isn’t necessarily a reflection of what they’re capable of and different industries pay very differently. It’s also true someone could be overqualified for her current role and be earning far less than what she should be.

That’s all very true — and I believe employers need to be flexible and understanding when it comes to those factors. Yet, I don’t believe it’s generally reasonable to give someone a 50 per cent increase when changing jobs. Few job changes justify such a quantum leap in compensation.

Determining career progression and reducing employee turnover

Actual salary history — not just current salary — can be a useful indicator of a person’s career progression. Someone who has been receiving regular raises at the higher end of the scale and a promotion or two is more likely to be a go-getter than someone who hasn’t had an increase or promotion in five years.

It’s also true someone hired for a job paying one-half of what they’re used to earning is likely to be bored in the role. And with a few obvious exceptions, an overqualified employee is likely to leave as soon as the economy improves or a better opportunity arises. Turnover is extremely expensive for organizations, and obtaining a candidate’s salary history can help to avoid it.

Brian Kreissl is the managing editor of Consult Carswell. He can be reached at brian.kreissl@thomsonreuters.com. For more information, visit www.consultcarswell.com.     

© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.
    
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COMMENTS
Sharing Information leads to Healthy Discussion
Tuesday, January 08, 2013 4:58:00 PM by Joe Nunes
I agree that you should pay the job and not the person to a large degree.

However, with the ongoing restructuring of the workforce, some candidates will mislead an employer that they really want the job and salary being offered when in fact what they want is an opportunity to work somewhere while they look for employment that better meets their true expectations.


Asking about past pay opens the conversation about expectations if the current role pays less than the candidate was previously earning.

It is funny how so many comments assume that an employer is trying to get away with paying less than a fair wage but no one considers that some workers have been spoiled in the past and then downsized and are now looking for a new employer to spoil them.
Pay the job, not the person. Period.
Wednesday, December 12, 2012 8:00:00 AM
Mr. Kreissel, I have to respectfully disagree with you. It is best practice to pay the job, not the person. There are hundreds of reasons why a person's previous salary adds little to no valuable information to a selection process. The salary range to be applied to the job opening is matched to that job and its specific responsibilities and skills requirements. A candidate's former salary should not speak to the proper compensation level for the new role at all. The only useful information it gives the perspective employer is how little they may be able to get away with paying this candidate if their salary bands are "flexible." Candidates should always enquire as to the ranges for job openings and employers should have defensible compensation levels for those positions. That is how an expectations "match" should be determined.
No one wants to waste their time!
Tuesday, December 11, 2012 2:36:00 PM
During my last job search, I made it through two phone screenings and a thorough online series of assessments. I was flown half way across the country for final interviews with a team coming up from the U.S. Made it through and in salary negotiations, although the title was Assistant Director of HR for Canada, they announced that the maximum salary for the position was $40K less than what I was currently making — a monumental waste of time and money for everyone. Needless to say, I now ask if they don't divulge the salary range.
Re Re Whatever
Tuesday, December 04, 2012 6:45:00 PM
I tell them the low end of the range to begin with. If that doesn't interest them, then I know we have a salary mis-match; if it does keep them interested I still have room to offer more, and will if I can.
RE: Whatever
Tuesday, December 04, 2012 11:23:00 AM by Brian Kreissl
Good point. When I'm recruiting for jobs, I very often do tell candidates what the job pays. There's no point in wasting their time and mine if there isn't a match between their salary requirements and what the job actually pays. If they aren't going to work for what the job pays, why bother? Contrary to popular belief, few recruiters or hiring managers have much discretion when it comes to compensation.

It can be difficult when there is a salary range associated with a job. Companies understandably don't want to divulge the upper limit of what the job pays when dealing with a candidate. It kind of limits their ability to bargain with candidates or adjust their offer based on the individual's background and experience. Also, many employers are reluctant to bring in an external candidate above the midpoint of the salary range associated with the job.

If I tell someone a job pays 85-95K, human nature is such that they will often expect the upper limit even if their background and experience make them a more junior candidate. Paying someone more than what they're worth can skew compensation structures and cause resentment among existing employees who are likely earning less.

Because of that, most employers will find out what someone's salary expectations are to ascertain if they are even within the range. If they are slightly above the range (or even at the very high end of what the job theoretically could pay), expectations may have to be managed a bit (that's where coming clean about what the job actually pays might be a good strategy). But if there's a huge gap, they're unlikely to be a fit.
Whatever
Tuesday, December 04, 2012 10:46:00 AM by J.R.
Mr. Kreissl - I will tell you my salary wehn the employer tells me how much the job pays. Its a 2 way street. If employers wont tell how much a job pays, then I wont tell them how much money I make.