Does a candidate's salary history matter?
While candidates can refuse to answer questions about salary history, such information can be useful to employers
Dec 4, 2012
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 firstname.lastname@example.org. For more information, visit www.consultcarswell.com.
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Brian Kreissl is the product development manager for Carswell's human resources, OH&S, payroll and records retention products and solutions.