Benefits and Drawbacks in Asking for a Candidate's Salary History
Asking a Job Candidate for a Salary History Can Be Discriminatory
Would you like 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.
Asking a job prospect for his or her salary history has also been identified as a factor in employment salary discrimination for females and minority candidates. This is reflective of the fact that women earned 79.6 cents for every dollar men made in 2015, according to data from the Census Bureau. Although, when factors such as education level, type of work, experience and job tenure are taken into account, this gap narrows considerably.
What Is a Salary History and Why Do Employers Want Them?
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, in most jurisdictions currently, although this is changing rapidly in response to gender pay gap issues referenced earlier. This is a situation in which you need to know the applicable employment law in your location as more and more jurisdictions are banning asking for salary history information.
Will Your Applicants Respond to Your Request for Salary History Information?
Whether the prospective employee will respond to your request or continue as an applicant will depend on how privately he regards that information. Some of your best candidates may regard this information as private and not your business.
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 a poor 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?
- In positive economic times, when job searchers rule the market and employers are routinely competing for highly qualified talent, you may be alienating the quality applicants you need to fill increasingly hard to fill jobs when you ask for 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, even understanding all of the reasons why employers don’t provide the salary range, 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: Please note that the information provided, while authoritative, is not guaranteed for accuracy and legality. The site is read by a world-wide audience and employment laws and regulations vary from state to state and country to country. Please seek legal assistance, or assistance from State, Federal, or International governmental resources, to make certain your legal interpretation and decisions are correct for your location. This information is for guidance, ideas, and assistance.The information on this site is for guidance, ideas, and assistance only.