What Is a Salary History?
Advantages and Disadvantages of Asking for Candidates' Salary History
Want to see if you can afford to hire a prospective employee? A prospective employee’s salary history is a critical tool in salary negotiation. The salary history can tell you your prospect's current salary, his former salary, and all of the extras he was eligible for in that position. It also gives you information that you can use as a factor in employee selection.
A salary history is a listing of your potential employee’s current and former jobs with the amount and kind of compensation he or she received in each position.
For example, a salary history item should provide the following information:
Employer: J.C. Smith and Associates
It is legal to ask a potential employee for a salary history at any point in the hiring process. Whether the prospective employee will respond to your request or continue as an applicant will depend on how privately he regards that information.
Articles proliferate online about how an applicant can respond to this request without providing your requested information. As an employer, you need to decide how important having the information is in your selection process.
Many good candidates feel that it is a violation of their privacy and that providing the information puts them at a distinct disadvantage in a salary negotiation. So, asking for a salary history may alienate people you want to hire.
It is an invasion of your potential employee’s privacy. Each employer needs to decide if the information required bears results that are sufficient to overcome the loss of potentially superior employees who believe their salary history is none of your business.
Advantages of Asking for Salary History
Four reasons exist for why an employer might want to ask for salary history from an applicant.
- The information tells the manager if he can afford to hire the applicant. If the applicant’s current salary, benefits, and total compensation surpass what is available within the budgeted salary range, the information saves the employer and the applicant time and energy.
- Additionally, the employer assumes that you expect a raise if you change employers, so this information tells the manager if he can afford to meet your expectations.
- A salary history that exhibits that an applicant has performed increasingly responsible and more highly compensated positions shows the company that this employee was successful, ambitious, and promoted. This information makes an applicant more desirable in an employer’s eyes.
- Employers assume that your current or former employers did their homework about your compensation package. This compensation package tells the prospective employer about how your employer valued your services, the market in which their jobs are competing, and what they will need to pay to attract you to their employment.
Disadvantages to Asking for a Salary History
Just as employers have reasons why they request a salary history from candidates, reasons exist about why this is a bad practice.
- The request for salary history alienates candidates who feel that you are prying into their personal business – that is not your business.
- A candidate may be severely underpaid in his current job and job searching to right this wrong. How many employers will look past the numbers provided to consider what the candidate tries to negotiate?
- The candidate may be willing to take a lower paying job. Maybe she’d like less responsibility, to step away from a management position, or to obtain a job with less pressure. Would the salary history communicate this information to the employer? How many employers would interview a highly paid candidate even if she said she was seeking a different role.
- In this economic climate, candidates may be willing to accept less compensation – even substantially less – to obtain employment. Are you passing up a few years of an experienced, competent employee’s time and contribution by considering salary history?
When to Ask for a Salary History
Employers seek a salary history in the job posting, during the telephone screen and during the interview. Applicants can decide whether they want to divulge this private information before applying for the job.
But, applicants also need to understand that at one of these crucial moments, even if the information was not requested in the job posting, that many employers will ask. Employers reason that when a candidate feels under serious consideration for a position, his inclination will be to respond.
But, companies need to understand that, increasingly, applicants are prepared to not allow the potential employer to corner them. They have developed responses that they will stick to even if pushed or prodded.
Employers could eliminate this ritual by providing a salary range up front in their job postings – because a range exists. And, yes, I understand all of the reasons why employers don’t. I think those reasons are wrong, and they fail to honor and respect your job candidates.
The request to provide a salary history is controversial and disliked by applicants. An employer ought to think long and hard before asking for one.
Disclaimer: Susan Heathfield makes every effort to offer accurate, common-sense, ethical Human Resources management, employer, and workplace advice both on this website, and linked to from this website, but she is not an attorney, and the content on the site, while authoritative, is not guaranteed for accuracy and legality, and is not to be construed as legal advice.
The site has a world-wide audience and employment laws and regulations vary from state to state and country to country, so the site cannot be definitive on all of them for your workplace. When in doubt, always seek legal counsel or assistance from State, Federal, or International governmental resources, to make certain your legal interpretation and decisions are correct. The information on this site is for guidance, ideas, and assistance only.