March 12, 2009

Salary history: Will HR put up or shut up?

Filed under: For Managers, Hiring, Interviewing, Job Search, Recruiting

In recent postings (How to make more money, Why you should tell me your salary) we’ve discussed whether job applicants should disclose their salary history to an employer. This topic has taken wing elsewhere: On BNet (Should Jobhunters reveal salary requirements?), on PunkRockHR (Candidates, Salary, and Disclosure) and on Job Hacking (What happens when you don’t pay attention to statistics?).

Job hunters seem to clearly recognize why it’s not a good idea to disclose, even if some feel pressured to do so. (Hey, I don’t knock anyone who desperately needs a job and decides to disclose. But I think that’s a short-term fix and later the tire is gonna blow on you big-time…)

Some in HR offer all kinds of reasons to support their position that applicants should — or must — disclose salary history or forfeit their chance at a job. I find none of them compelling.

But I don’t think HR managers are dopes or even disingenuous. I think they’re brainwashed and can’t see past their own bureaucracy. So I’ve been trying to figure out how to turn the tables and help HR solve the problem without waiting for candidates to cough up their salary info. That way these employers won’t have to pass up good candidates.

So here’s my suggestion and my simple business logic. HR contends it’s legitimate to ask for an individual’s salary history and that the information is a crucial component when assessing a candidate. HR contends salary information should be shared in the context of a job application and interview to enable both parties to determine whether further discussion is realistic, and to ensure that if discussions lead to an offer, acceptance of the offer is a realistic possibility. HR contends that salary history helps an employer judge a candidate.

So here’s what HR should do. Following the same logic and rationale, at the point where HR would ask for the candidate’s salary history, HR should instead share:

  • The salary range for the position in question.
  • The salary history of the person who is now doing the same job, or who used to do the job.
  • The salary history of others in the department who do similar jobs.

The company’s salary history is a crucial element that helps a candidate assess and judge a company. It enables a candidate to determine whether there is a realistic opportunity to make a match, and whether further discussions are reasonable. It’s legitimate to share the company’s salary information in the context of the interview and application process.

If HR managers don’t insist on knowing a candidate’s salary history, then I don’t expect them to disclose any of this information. But I do expect those who rationalize that candidates’ salary history is necessary to the interview process to eat their own dogfood and make life easier for everyone by disclosing all three data points above. What’s the big deal?

Put up, or Go pound salt. I’m anticipating HR managers who suggest that company salary information is confidential: Put up or shut up. And I encourage bold HR folks who barely give a rat’s batootie about a candidate’s salary history to pile on and tell us how you hire good people without making job candidates heel.

[UPDATED 3/17/09] Some of the dialogue here stems from today’s edition of the Ask The Headhunter Newsletter: HR’s salary moxie.

60 Comments on “Salary history: Will HR put up or shut up?”
By Bob
March 12, 2009 at 1:04 pm

I agree.

By Ask a Manager
March 12, 2009 at 8:08 pm

Right on. I’ve found the defense of this practice fascinating and disturbing.

By CindyG
March 13, 2009 at 11:52 am

What a concept, a level playing field! I can’t wait to try this tack. Thanks so much Nick!

By scottthekyhrguy
March 13, 2009 at 3:24 pm

Wow — your original post has some interesting ideas for candidate strategies in a salary negotiation. I’d like to have this discussion with you over a beer. There’s some sweeping generalization, parphrasing out of context, and the implication of non-existent statistical anlaysis here that I need to consider a little more fully before replying. This gonna be a fun debate.

By scottthekyhrguy
March 15, 2009 at 4:08 pm

Ok — I’ve stewed on this. You find “none of the reasons compelling” that HR (or hiring managers, I presume, since they’re as much in the firing line here as us “HR drones”) offers. Your contention leaves out a crucial point — in requesting salary history on a candidate I am not asking a potential employee to share anything with me that will go beyond me and the hiring manager and his or her boss. If I disclose the salary history and range for all those who have held a position to every candidate for that position I create a problem. What if the position is open because we just promoted someone (usually true in leadership positions in my company — we have a pretty aggressive succession planning and traing process.) Is it even remotely reasonable for me to tell a canidate what his or her boss has earned throughout his or her career? What if it’s a newly created position? No such history will exist. Is it really reasonable to disclose the salary history of others within a department with whom a potential hire would be working? I’m not asking the candidate to tell all of the other chemical engineers in our company his or her earning history. I’m asking him or her to tell his or her potential boss and me. If the boss discloses that history with anyone other than me or, perhaps, his or her next level manager I have a disciplinary problem.

You present this as though it’s apples to apples. It’s not. Not even close.

Do I think it’s reasonable that a candidate should be informed about our range for a job? Heck yes! In fact, normal practice for me — BEFORE asking for salary history I provide a detailed description of what the person would be doing every day — not the canned job description, but a bit of a “day in the life.” We panel interview, so I ask the hiring manager to elaborate or refute the details of what I’ve said as part of the same discussion. , and the department managers they support. I then ask, “based on this description, what would your salary expectation for this role be in order for it to make sense for you to seriously consider an offer to join our company?” The salary history is a follow up discussion after we’ve gotten the expectations discussion out of the way. I’m only involved in hiring leadership roles in my company, but for consistency’s sake I mandate a similar process for my team, the individual contributor-level jobs for which they hire.

Regardless, if there is a big disconnect between what the person is expecting to earn and what they’ve historically earned they are not excluded from the discussion. By all means, that just means we have more to talk about.

Earned six figures whilest working in facility that was shut down, which meant you took a $45k retail management job until you could return to your field? Reasonable explanation. I understand why you’re seeking $110k in your next role. Earning $45k as a retail manager and want to make $110k on your next job with no appreciable increase in credentials or experience? Thank you for your time.

This isn’t about leveling the playing field. Let’s be real — the playing field will never be level. There will always be a pendulum swing between supply and demand. There will always be either a glut in available workforce or a shortage of it. When there is a shortage, the candidate has the ability to demand whatever he or she darn well pleases in the interview process. When there is a surplus, that process tilts toward the employer. As an HR pro, I can only work to ensure that we don’t compromise our principles or allow the process to become anything other than fair and consistent. I consistently ask for the information for the reasons we’ve already beaten into the ground on other forums.

Ultimately it’s also about establishing a negotiating position for a candidate the results in a higher salary than he or she may get if they disclose salary history. That benefits you, the recruiter, and it’s pretty obvious that it benefits the candidate. That’s a solid goal to have in your business and I applaud you for it. I mean that. But let’s be honest — the goal here isn’t really to make a case for the fairest possible practice with respect to hiring and salary administration.

By Nick Corcodilos
March 15, 2009 at 5:02 pm

scottthekyhrguy:

You reveal a lot of thoughtfulness about the interview and negotiation process in your operation. I think that’s good and I compliment you because it sounds like you keep a person’s salary history in context when you make an offer. You also offer some points about confidentiality of salary information – both your company’s and the candidate’s. (They’re interesting, but I don’t buy them)

But you’re still rationalizing why you need a candidate’s salary information. I’m not really arguing that you should divulge yours. I contend that the reasonable and prudent position is for neither party to divulge anyone’s salary history.

I still don’t see any compelling reason, in anything you said, why you need to know the candidate’s salary. Just a lot of explanations about why a person shouldn’t worry about it.

At the end, you wander back into the same dismissive statements others in HR make. But I think you’re wrong.

1. You claim that divulging salary “establish[es] a negotiating position…that results in a higher salary…if they disclose salary history.” You’ve offered no evidence or mechanism that makes that true. What you say is almost a tautology.

2. “…it’s pretty obvious that it benefits the candidate.” That IS a tautology. You’re saying, “It’s true because I say it is.”

“…the goal here isn’t really to make a case for the fairest possible practice with respect to hiring and salary administration.”

Oh, yes it is. That’s my point entirely. It’s not fair for an employer to make a candidate yield his or her negotiating position to you just because you want them to. Not unless you do, too. You offer reasons why your company’s salaries SHOULD be confidential, yet you deny any assertion that a candidate’s should be, too. The fact that you will not tell anyone else is spurious. The fact that YOU know is all that matters. YOU will negotiate the offer.

I concede that you’re free to tell the candidate to take a hike. But please accept that a candidate is doing nothing wrong when he or she tells YOU to take a hike while they defend their negotiating powers. In fact, it may be the smart thing for them to do, depending on their judgment. A threat from HR is not sufficient cause to disclose.

This IS a fun debate. I’m not saying that anyone in HR who believes candidates must disclose their salary is a bum. Just that they’re confused :-)

By scottthekyhrguy
March 15, 2009 at 6:11 pm

**2. “…it’s pretty obvious that it benefits the candidate.” That IS a tautology. You’re saying, “It’s true because I say it is.”**

I had to laugh at that. If that’s NOT true, why on earth have you written two blogs suggesting that a candidate do so (not disclose)? I don’t know if it’s true or it’s not true. I believe it to be so, but I have no detailed statistics to support or refute that belief. The majority of literature available on the subject of negotations of any kind suggests that two things tend to be true — 1) he who is willing to abandon the deal most easily has most of the power in the negotiation and 2) he who has the most information has the best perspective from which to frame the negotiation.

I don’t get your point. “YOU will negotiate the offer.” Well, no. If there’s a negotiation involved, that’s an at-least two-sided thing. Otherwise it’s just a take it or leave it offer. If it’s that, I don’t really care what you’ve earned before. That would jsut make it “I have “X” to spend, and if your’e not willing to take it you can beat it, pal.”

Lastly, if I didn’t strongly imply that the information is confidential when it’s shared with me and the hiring manager, let me not imply it. Let me say it. Bluntly. The information is confidential. If it’s shared outside of the context of the interview by the hiring manager (or me, or my staff) it’s a disciplinary situation. We don’t bar discussion of salary and benefits twixt employees(after all, that could be construed as union busting:)). But we do hold candidacy confidential. That includes, but is not limited to, discussions of the salaries of potential employees. Ours is a very incestuous business. In fact, we encourage off site interviews until we’re ready to hire so we don’t put candidates in a position of having to explain why they’re visiting our office in the middle of the work day.

Listen, I’m not threatening anyone. I won’t boot a candidate from consideration because they don’t disclose and I won’t hire someone because they do. What I’ve been saying from the beginning is this. There are mulitple data poitns we consider on each and every hire we make. Salary history is, and will continue to be, one of them. It has its place. If there are two candidates who appear to be equal in every way but only one of them will give me that data point I’m going to push to hire the one on whom I have extra data if that data suggests he or she is a fit for the job. I’m not confused about that at all and I never felt like you were calling me a bum. I felt like you were telling me I had a backwards/outdated practice or that my company was wilting under my oppressive view of this subject. I disagree with that position. I think you have your own biases in this discussion, biases I’ve laid out here and on the PunkRockHR forum. I’ve never perceived anything approaching disrespect from you on my own personal contribution or worth.

On that note, it’s been fun, but my head is starting to hurt from banging it on this wall. I suspect you may be feeling a bit of the same, so I’ll cede the floor and let you get the last word in here. You’ve been a sporting partner and I appreciate the spirit of the debate. This would have been fun to do over a beer; though I suspect we would have bored the heck out of 90% of the patrons at any bar in which we held the discussion!!!!

Enjoy the rest of your weekend.

By Nick Corcodilos
March 15, 2009 at 8:57 pm

Scott,

I’ll buy the beers! I’m getting fascinated at the disconnect in this debate. You’re clearly working as hard at making your points as I am. It’s not that I disagree with you (though I do). It’s that try as I might, I cannot see the logic in what you’re saying. That’s something interesting in itself. I guess you don’t see my logic, either. I thought I expressed that I’m generally impressed with how you handle your hiring process. Anyone who tells me they don’t dismiss candidates just because they won’t share salary scores points.

But you’re right. We’re never gonna get past the rest. Keep on truckin’!

Imagine the bar fight. ;-)

By Karsten
March 16, 2009 at 9:10 am

Scott,

You are convincing about how you keep information confidential, but you still haven’t convinced why you need that info at all: The point is simply that you just don’t need to know what the candidate has made before.

What you need to know is 1) Can he/she do the job, 2) Can you reach an agreement on conditions and compensation.

Your company should have an idea on what the job is worth and the candidate should have idea on desired compensation. The rest is negotiation, and to do this negatiation, you don’t need to know what the candidate made before.

I see a rationale for the company to state a maximum salary at the beginning of negotiations, and for a candidate to state a minimum salary, just to ensure that they are not on different planets. Thay may save some wasted time. However, unwillingness to negotiate further up or down may also mean that they loose a good mutual opportunity.

By VK XAVIERFREYR
March 17, 2009 at 3:20 am

This is too easy …Nick, you are spot — as usual.

What you are finding in the HR comments coming at you, through the aether, is the same lack of business ethics, lack of professionalism, and frankly lack of training that gets the Fortune 500 their unfortunate distrust.

Another reason for all of the third-party agencies is to collect all of the illegal information that the company wants, including the candidate’s social security number, marital status, etc. (which the third-party is under no obligation to protect or secure — speaking to you on their cell phones, from Starbucks, right?) These gatekeepers have the candidate’s life and livelihood in their hands and are ill-equipped to make a suggestion or decision as to which candidates should move on in the hiring process.

Past candidate data, with the only exception being skills and credentials, has nothing to do with the matter at hand. Again, the HR department that requires — or, thinks that it needs — past salary history is working an old factory paradigm that should have been dead and buried no later than the beginning of the Second World War. This is true especially for the Technology sector where we switch roles frequently. So, if a candidate is under review for a HelpDesk position, what bearing should the previous salary as a supervising Development Manager have on the salary offer?

What these corporate HR representatives (and agencies) are telling you is that based on who they feel you were, you now have a price tag on your head which should change very little from company to company. I have been asked the question, by a third-party agency (before telling me about the position), “How much do you cost?”

Taken out of context, that statement could have meant a lot of different things …then you hear, “Hello?”

Sorry to write that most HRs and companies lost their credibility in the hiring concerns during the 90s. The path back requires a crucial strategic shift which would allow companies regain their integrity: it would require involvement and interest from the hiring managers and executives.

Keep us on the good path Nick, we need you …

By Bill
March 17, 2009 at 4:21 am

From the job seekers perspective, another reason not to divulge salary…..

Now laid-off from a down industry, I am in the sobering position of having to consider jobs at 50-60% of my previous salary.
During the interview process for one such position, I made the mistake of divulging my last salary. Despite being more than qualified to excel at this position, I didnt get the job. Ego aside, I am certain I scared the employer away, who likely assumes I will be gone as soon as the economy turns around. My mistake, it wont happen again.

By Jim
March 17, 2009 at 7:17 am

I’m with Bill on this one. This doesn’t apply to my situation right now, but several years ago, when the IT boom went bust, I was laid off from a position where I made close to $80K per year, in a city with a relatively high cost of living. Due to lack of jobs, I was forced to move to a smaller city in the Midwest with a lower cost of living. Ended up taking a nearly 50% pay cut, but I landed the job. With the (il)logic I see being displayed by HR weenies in these discussions, I’d never even have been considered for the position if I had to disclose my salary (after all, I would have just taken the position while I looked for the better paying one that no longer existed, right?).

Here’s a situation for the HR weenies – I have a co-worker right now who has been in the IT industry for 30 years. Unfortunately, he’s been stuck using older technology (currently Visual Basic 6.0 maintaining a legacy application), and he’s trying to learn something newer, particularly C#. He’s been using the standard job-hunting methodology for quite a while now, with no success. He’s even gone so far as to offer himself at a 1/3 salary discount compared to what he’s making now, just so he can get the position using newer technologies, knowing that he can make it up in raises, or yes, leaving after a couple of years for a better paying position (after all, he’s not going to allow himself to be taken advantage of forever). No takers. (Needless to say, I gave him the URL for Nick’s site, and offered to loan him the copy of Nick’s book I bought a number of years ago.) The whole salary history requirement is crap. Sometimes we have to take a step backward just so we can take two steps forward, but you HR weenies would never let us do it. Do you honestly think our salaries should just keep going up-up-up forever, and never come back to earth? Bet you also think the stock market should never correct itself, either.

By Peter
March 17, 2009 at 9:13 am

I am a hiring manager at a $25bn company. In pursuing this job over 6 years ago I declined to reveal my prior salary history or social security number until 1.) an offer was on the table and 2.) I had a signed assurance that my personal information would be kept confidential and private. I run an Information Security consulting practice and you’d better believe every one of my people demanded the same thing.

I wrote Nick extensively about my job hunting experiences at that time (2003) because I could not believe the practices in HR’s own personal “industry” could be so surreal, yet posts like Scott’s just reveal the necrosis is only getting started.

HR folks everywhere, this is real simple:
If you need my salary history you’re either a voyeur or just plain nosy, but the salary I made in my last role has no bearing on the salary I will require to come work for your organization. If you ask for my salary history, my requirements automatically jump 10%. If you need my salary history to gauge the value of the job you have on offer you are incompetent and should be fired since this is your first responsibility. If you get in between me and the hiring manager or impede my conversations in any way because I will not tell you my most closely guarded secrets I am going to tell the hiring manager and the general public while I withdraw my interest.

Bottom line: not only is the question wrong, I find I am dealing with a higher class of company when I forego any who demand such information. Scott, you don’t have the right to that information. Your company is reflected poorly and will ultimately become a pariah to talent if you continue. But just in case you need some statistics to back up the anecdote, take a look at datalossdb.org. The sheer volume of Personnel information (HR) stolen from organizations over the past few years should shock anyone. The fact is, HR departments are great places to steal data from since you have the goods and you generally don’t know squat all about how to protect it.

And the reason for that is simple: your security people were hired under the “show me your salary first” model. Any Security consultant worth a damn will never work for a company like yours because they all know your department is a sieve for sensitive data.

But hey, you keep deluding yourself. The high performers are all working somewhere else, enjoying the show.

By scottthekyhrguy
March 17, 2009 at 9:22 am

Bill — you reference a point I’ve made repeatedly throughout this discussion. There are perfectly valid reasons for a person to take a pay cut that speak more to the circumstance than the candidate. If I’m looking at someone who had to take that large a pay cut for the reasons you describe, I fully expect to pay him or her a salary more in line with the positions he or she held prior to the lay off. Let me ask you an honest question though — is the hiring manager for the role that pays 50-60% of your prior salary wrongly inferring that you’ll jump as soon as things turn around? Would you not go back to a role more in line with your earning potential and expertise if such a role existed? If you would, then the HR person and/or hiring manager — and this is harsh, I know — did the right thing in NOT hiring you. Their responsibility is not to you as a candidate. Their responsibility is to fill the job with the person who best suits the role and who returns the most value for their employer. If you are truly looking to change fields and a pay cut is par for the course, they did you and their employer a disservice by not exploring that further with you.

There seems to be a pattern here. HR is being villified for doing something that IT guys and headhunters don’t like. It’s not wrong, it just doesn’t benefit you. There is a difference. And I wouldn’t call you a weenie for it. Just myopic.

Jim — as an HR weenie whose undergraduate degree was in economics, yes. I understand wage inflation, compression and stagnation. When George Romney took over and turned around American Motors one of the first things he did was to institute a cut in guaranteed pay and benefits to the UAW contract and to add a profit sharing component to it. The head of the UAW at the time told him that it doesn’t take a world class economist to know the road of ever increasing pay, when linked to ever decreasing productivity, leads to a dead end. You’re not educating me on the math of any of that. You’re attempting to condescend to those in my field because you don’t like a process that doesn’t work to your advantage.

Let me be less subtle, since nuance seems to be lost here. I have, and I am aware of no one who does have, a formula that says “Joe earned $10/hour, so we’re going to pay him at least $9.90/hour to come work for us; but no more than $12.00/hour.” At no point have I said that salary history dictates future salary. I’ve hired people with greater than 50% pay increases. I’ve hired people who were thrilled to take 50% pay cuts. Contractors generally take huge pay cuts percentage-wise, but more than make up the difference with company-paid medical benefits, 401(k) matches, etc…

Salary history is a data point. It’s an important data point. It’s not nearly as important as work history, certifications, degrees, interpersonal skills, leadership traits and reputation in the industry. But it IS a data point that employers are smart to consider. You won’t self select out of every interview process by refusing to provide it and you won’t get every job where your salary history and expectations line up with a potential employers sweet spot. But you will have to be a strong communicator to overcome your unwillingness to share that piece of information. Being hostile, combative, and resorting to calling a group of people “weenie” because you don’t like or understand something that they’re doing would give me much more pause for concern than an intelligently and professionally worded refusal to answer a question.

By scottthekyhrguy
March 17, 2009 at 9:57 am

Two thoughts — one, we’re not in the information security or IT business. Our use of those services is truly through security “consultants,” so the salary of those individuals is the business of their employer.

Two – there seems to be some mass perception that disclosure of salary history is an absolute precondition of employment with me or my employer. At no point have I stated or implied that. I question the reading comprehension skills of this crowd. You all clearly carry some bias. I am gathering this audience is weighted heavily with IT professionals and headhunters, which kind of puts me at a disadvantage. It’s a bit like making a PETA presentation at an NRA rally. Doesn’t matter who’s right — the biases that both carry to the discussion make it difficult for either to hear the other.

By Laura
March 17, 2009 at 10:39 am

Anyone who thinks a conversation that happens behind closed doors in HR is “confidential” is delusional.

HR is there for the employer, period. Not for the employee. Not for the prospective employee. HR can plan all of the best balloon-and-cake employee appreciation events it wants, but when push comes to shove, HR is what it is. That’s not vilification of HR–that’s just truth-telling.

I didn’t think about how much of a slave mentality I’ve had until I started reading this blog. In retrospect, my salary history is not anyone’s business. If an HR person isn’t smart enough to look at my resume and realize I made one kind of salary as a newspaper reporter (read: almost nothing) and another as a corporate communications professional, then that HR person is pretty worthless.

By Nick Corcodilos
March 17, 2009 at 10:44 am

Some of the discussion here stems from today’s (3/17/09) e-mail Ask The Headhunter Newsletter. It’s normally available only to subscribers, but I figured that having access to it would contribute something to this dialogue. So here you go: http://www.asktheheadhunter.com/newsletter/OE20090317.htm

By Karsten
March 17, 2009 at 11:47 am

Scott makes a valid point: Companies don’t want to hire people that they may soon loose to better paid jobs. However, looking at the candidate’s resume, they will know that the candidate is taking a step down anyway, they don’t ned the salary history to figure that out. The candidate will need to convince the company anyway. (Nick’s comment on how would be appreciated).

The flip side is what is mentioned in the newsletter: Companies abusing salary history to make people work for less than they are worth. Why help them?

By Nick Corcodilos
March 17, 2009 at 12:18 pm

Karsten,

I’m glad someone is addressing this point head-on: “Companies don’t want to hire people that they may soon loose to better paid jobs. However, looking at the candidate’s resume, they will know that the candidate is taking a step down anyway, they don’t ned the salary history to figure that out. The candidate will need to convince the company anyway. (Nick’s comment on how would be appreciated).”

(I’m using the proverbial “you,” Karsten, not talking about you per se.)

This is the oldest and most spurious argument for dismissing applicants who earn (or were earning) less than the current job pays. It’s idiotic.

If I earned $50k at my last job but I’m willing to take $40k to work for you because I need a job, BY YOUR OWN LOGIC (that is, a person’s value is defined by their past salary) you’re getting 20% more bang for your buck.

You’re worried I’m gonna leave if a better job comes along? Your company’s biggest concern is that employees will leave for something better? Then, my friend, you’ve got a far bigger problem than you think.

There are 50 ways from Sunday to take good care of a good salaried employee. Performance bonus. Incentive program. Accelerated review and raise. Find more useful work for them to do. Provide great perks – training, professional events, employee development.

This “logic” is so dopey. In the stock market, we try to find under-valued assets so we can buy them cheap, to make profit later. Investors are DYING to find such assets. Why aren’t companies doing the same? No one said to hire cheaper workers just because they’re cheaper. Hire them because you can make them pay off to your company. I’m not saying to make ridiculously low offers just because you can. I’m talking about employers whose budgets allow only $40k (in our example), not employers who have $60k in the kitty for the job but will undercut the applicant just because they can.)

Don’t believe a person will stick around? Don’t trust them? Create a bonus that’s payable over the next 3 years. But attach a development plan that takes advantage of the person’s unused skills as time passes – for your company’s own good.

The problem isn’t that a person will leave because they took a job that pays less than they were making. The problem is that the new employer doesn’t know how to capitalize on a more valuable employee that it was able to acquire at a discount.

Isn’t it HR’s job to figure that out? All I hear from HR in this dialogue is that candidates are sneaky. Gimme a break. All I’m seeing is that employers might not know how to manage.

An applicant can convince a company to hire them by offering a commitment to stay as long as conditions X, Y, and Z are met. It’s called making a good deal.

By scottthekyhrguy
March 17, 2009 at 12:41 pm

Nick — that’s all you’re choosing to hear. I don’t think employees are sneaky or that employers are intrinsically genuine. I don’t think candidates are honest and potential employers are dishonest. I don’t think that all recruiters are used car salesmen who will say anything to book the fee or that all recruiters are valuable partners to their clients who turn over applicants that otherwise would not have been found. The truth is, most fall somewhere in the middle on all three of these points and the extremes make it hard for those who haven’t been exposed to other types to believe that their experiences are not part for the course.

I think that that salary history is an indicator of where someone has been and, by proxy, a data point on which I can make educated guesses about what they’ll do in the future. That point seems to keep getting lost in this discussion and I don’t understand how or why.

I’m re-printing a point I made to you on Punkrockhr.com.
**Some like to mis-quote a standard phrase you’ll see in an investment prospectus. The actual phrase is, “Past performance is no guarantee of future results.” HR likes to say that past performance predicts future performance. Entire interviews are devoted to delving into past performance. I’ve seen enough stars fail in new jobs that I know that’s balderdash. It’s yet another excuse that too many HR folks use for HR’s failure to assess a candidate properly. While some HR people are very smart and very capable, HR culture itself in American business is stagnant and too oriented toward documenation and reporting. It’s time to separate compliance obligations from the obligation to hire people who can do the job — not because they got paid $X or did Y last year.**

Have you not noticed that the investment literature disclaimer you reference is ALWAYS preceded or follwed by 27-30 pages discussing the past performance of the fund? To paraphrase the overall message of the investment literature — the disclaimer says “We’re about to spend the equivalent of a short novel telling you that we’ve done an awesome job with money in the past, so you should give us yours so we can do the same thing with it. Now, if we screw up or the market tanks, or Armageddon starts you can’t hold us liable because we warned you that we’re not guaranteeing you anything.”

So, by that rationale, my contention that salary history actually does mean something holds up quite well. I’m not guaranteeing you that someone who has earned 200k is going to be a better division president than someone who has earned 100k. I’m not guaranteeing you that someone who has earned 45k can’t do the job. What I’m saying is that, if you look at 100 people earned $150k as salespeople last year, and you look at 100 people who earned $45k as salespeople last year, you’re going to find a greater number of high performers in the $150k group than you do in the $45k group. Furthermore, you’re going to find a smaller number of candidates who require substantial training investments in order to perform once brought on board. If you draw that out to say that we’re looking at 100 people who progressively earned 20% more money each year over a 10 year period, I’ll stand confidently behind the assertion that your odds for success improve exponentially when hiring from the pool that showed that income growth vs. those who don’t have that kind of track record. Everybody deserves a first chance some time, but this discussion has never been about how someone cracks six figures for the first time or whether or not you should make exceptions based on exceptional situations. It’s been about whether salary history is relevant.

By Edward
March 17, 2009 at 12:49 pm

Salary history is lame. Example, I worked in a non-profit and I worked in a developing country. In the non-profit I was basically like a consultant to large companies, I was not paid like a consultant though, I took the job because I ENJOYED it (keyword capitalized). Sometimes we take less money because we are doing something we love and believe in. I knew I could make more money at a big consulting company but I always wouldn’t have had a life or had the diversity of projects or the lack of politics, if you want me to deal with all that, I will demand more cash.

The overseas job I took because I wanted the experience, I was paid less because, you can live like a king on $80k down there and I knew that expats didn’t make the same as in the US in that location so I understood the market dynamics and what I was comfortable with. I ran a team of over 300, the same job would be about $240k here where I live now in the US. Coming back to the US, I had the “show me your salary history” and at first I gave it only to find how little HR really understood about market dynamics. They saw the $80k and pretty much ignored the actually accomplishments! One company wanted to hire me and said they only pay 10% above the last salary. So why the hell would I give HR my salary history, is it my past salary you are hiring or my skills that I can bring to make you money? I believe many in HR don’t know there is even a difference. If you need or want salary history, you are not doing your job. Salary history is a number that has zero meaning to me as a hiring manager. I’ve hired hundreds of people over the years and I have yet to find a good reason why I need it to hire someone.

By misty
March 17, 2009 at 1:48 pm

Bravo!!!!

Even before reading your newlsetter, I always felt that way about disclosing that. It says nothing less to me than, “Here is what I was making in the past and I recognize it has no bearing on what I can do for you company either immediately or long term, but instead I understand as the job applicant you are going to use this information to take advantage of me before I even become employed with you and even though I am fully aware of this a job applicant I know you expect me to sit through an interview and smile when inside my stomach wants hurl because of it!”

Bravo again, I say Bravo!!!

Sincerely,
Misty
Recruiting Assistant

By Peter
March 17, 2009 at 1:51 pm

Scott,

Not picking on you personally so thanks for taking all these bullets.

This quote I am fairly certain is representative of the problem I am highlighting:

“Two thoughts — one, we’re not in the information security or IT business. Our use of those services is truly through security “consultants,” so the salary of those individuals is the business of their employer.”

Guess what: that’s simply untrue. You may want to read up on privacy and compliance law since HR is swimming in it. HR is the number one offender of PII (personally identifiable information) data leakage because you have it all. Can I trust you shred resumes or have any credible risk management policies around handling applicant data? The moment you accept that document you have significant obligations under the law, and in 30 states you must disclose any potential breaches (say, someone outside HR sees my resume) to those violated. I don’t suppose that actually happens, which is my point.

In essence, I am asserting that HR generally does not know its own job. It’s a big one and there are a few companies that do it very very well. It crosses many bounds, including information security, privacy and compliance. HR owns the most precious information possible to control in a business and frankly, I haven’t heard any compelling reason to disclose it.

I have heard a lot of good reasons to hold it close to the vest, however.

By Wayne
March 17, 2009 at 2:51 pm

To Scott (and other HR personnel who share his perspective),

Here’s an analogy that might bring the counterpoint into focus …

I imagine you and I at the negotiating table where you are considering purchasing my home (offering me a job). All is proceeding normally when you ask me to disclose what I (the previous buyer, or employer in this scenario) paid for said home, and what the last five buyers (employers) paid for it as well.

Being surprised, I politely decline, whereupon you become suspicious and ask yourself a series of questions.

Why won’t he (the candidate) tell me? Is he hiding something?
Is he selling the house (himself) for less than he paid before?
Does he want more than it’s worth?
Will the house (candidate) be worth less (unhappy) down the road?

While these may be concerns on your part, they have no bearing on the home’s (candidate’s) current value. I have made improvements, and perhaps let some things slide. The features may not be to your liking or there may not be enough room. But it is what it is, and you either want it for a price we will negotiate or you don’t.

If you’re honest with yourself, your need for previous salaries is based upon an insecurity YOU have about your investment. You admit that you understand the many factors that can affect the home’s value, yet you seek one more “data point”. In my analogy, suppose I paid $250k and now I want $100k. And that means? Knowing “prior numbers” only complicates the negotiations by requiring answers to meaningless questions (does it REALLY matter what the house sold for in past years? Does not affect the asking price today ….).

Regarding my job search:

What if I move on later when the market improves? That’s life – get over it.
Suppose I AM unhappy? Do you expect me to be glad the market forced me to take less? Surely you don’t.
Wonder why I’m willing to do less than what I did before? Ask me.
Want me to stay? It’s called maintenance (raises, bonuses, benefits, respect and the overlooked “thank you”)

At the root of this, I believe (other than the aforementioned insecurity) is the obsession some hiring personnel have with every detail so they can make a perfect (they’ll call it “informed”) decision. So here’s the deal: I have a house to sell with all its features and flaws. You want it for market, fine. Pay a premium because you really like it – great! But don’t base your assessment on what someone else paid for the home (me). It is mine, and I offer it to you at a price. And you will be pleased!

By scottthekyhrguy
March 17, 2009 at 3:42 pm

Peter — I was responding directly to your statement “any security consultant worth his salt won’t work for you.” I didn’t make any statements about my liability or lack of liability for data security. You know nothing about my companies policies and procedures around data integrity. If you can point to a single place where I’ve made mention of maintaining an electronic record of a candidate’s prior salary history, I will recant every statement I’ve made here. You made one very valid point — if you don’t like our hiring process, you don’t have to work for us. Laura alludes to a slave mentality. That’s hogwash. Slaves have no choice where they work and they don’t get paid for it. I’m not forcing anyone to apply to work for my company and I’ve stated repeatedly that I don’t necessarily exclude someone from our process because they haven’t answered every single question I ask to my satisfaction. This is just one of many points to consider.

Wayne, the house analogy fails. The prior sale price is a matter of public record and I can have comparables pulled for current market.

On another forum this was compared to the NBA draft lottery. That’s not accurate either. The NBA has a union and those salaries are negotiated by agents.

We are in a free agent system. You can apply with anyone you darn well please. If you don’t like their application process, don’t continue it. If you disagree with the hiring process that your employer follows, make the argument that it should change. If they won’t change it, quit. The absolute only expectation/demand you can and should have is that your employer NOT make hiring decisions based on your disabled status, gender, age, or other protected class. Otherwise, you vote with your feet and your checkbook and I wish you much success with both.

By Suzanne
March 17, 2009 at 5:17 pm

I don’t think anyone has made a compelling argument as to why HR needs this information.

Recruiters expect candidates to do all their homework, guess what, HR can and should do their own marketing research.

By CareerSolvers » Blog Archive » Sizzling Salary Disclosure Discussions
March 17, 2009 at 9:04 pm

[...] out this great post on salary disclosure from Nick Corocodilis on Ask the Headhunter as well as the 100+ comments around this subject on [...]

By Peter
March 17, 2009 at 9:54 pm

Scott-
Again, I am not trying to pick on you here but you’re reinforcing the opinion I have built as a hiring manager and candidate of several decades around HR.

Whether you know it or not, your organization has information security personnel. They might not have the title, but they have the responsibility. Nowhere in the definition does “information security” limit itself to “electronic records”. It means paper, email, telephone calls, faxes and ANYTHING you do or say that gets communicated while you are representing the company. Your job is handling information.

And that means your solicitation of financial records and PII from candidates. I simply point to the hundreds of millions of records released to the wild by HR departments’ poor record handling (or loose lips) as justification of my concerns.

We do agree on one thing, this much is true. I don’t know why I care but I really do hope you’ll reconsider your position. It’s a terrible downward spiral that doesn’t intuitively appear to impact the general workforce, but it does. It’s a practice that is just more visible to the high talent workforce, some of the best of whom are listening to high talent managers, like me, who won’t put up with the nonsense any longer.

Consider this: do you expect your board of directors and C-Suite to go through this same process? I would wager they don’t. And if they do, I question their due diligence.

By Karsten
March 18, 2009 at 4:32 am

Scott wrote:
“You can apply with anyone you darn well please. If you don’t like their application process, don’t continue it. If you disagree with the hiring process that your employer follows, make the argument that it should change. If they won’t change it, quit. ”

This argument overlooks the fact that in most cases the power will be skewed, and the company will be a Goliath towards a David candidate. This assymetric relationship is an important reason why comapnies can do so many strange “Dilbert-like” things towards employees: The employees can’t put power behind their protests.

Which is why I support unions: They level the playing field between employer and employee.

By Karsten
March 18, 2009 at 4:41 am

Scott wrote:
“if you look at 100 people earned $150k as salespeople last year, and you look at 100 people who earned $45k as salespeople last year, you’re going to find a greater number of high performers in the $150k group than you do in the $45k group”

Statistically, that probably is true. However, following such a policy will leave you without those candidates who are in th 45K segment, but have been underpaid or have revamped their skills, and it may also get you a lot of people who make 150K not because they are good, but because they are good at a**kissing their managers.

Scott may be a good guy who treats people fairly regardless of what they are paid before, but many companies/HR reps don’t, and candidates can’t know in advance. Why take the risk of being dismissed from the 150K job just because you were unlucky and got 45K in the last job?

If you want my salary history, you must first prove yourself worthy of getting it.

By scottthekyhrguy
March 18, 2009 at 8:32 am

Karsten — this is a long thread and I don’t fault you for not seeing this. I’ve cut and pasted from several days ago.

**Regardless, if there is a big disconnect between what the person is expecting to earn and what they’ve historically earned they are not excluded from the discussion. By all means, that just means we have more to talk about.

Earned six figures whilest working in facility that was shut down, which meant you took a $45k retail management job until you could return to your field? Reasonable explanation. I understand why you’re seeking $110k in your next role. Earning $45k as a retail manager and want to make $110k on your next job with no appreciable increase in credentials or experience? Thank you for your time.**

Salary history is, again, just one data point. If the title you held in your last job doesn’t reflect your ability level, you just have a little bit more of a sales job in front of you to help me (or any other hiring manager) understand why. That’s not a drudgery inflicted upon the masses by some draconian HR measure. That’s due dilligence. Would you pay $50 for a stock when its prospectus says it’s worth $25 without knowing something more about it? You might. But, it would have to have a pretty compelling story and you’d have to believe that it’s going to be worth more than $50 in the future. Especially if there are $50 stocks out there that are already clearly worth what they cost.

By Karsten
March 18, 2009 at 9:54 am

Scott,

I did read those passages, but they do not convince me.

The stock analogue is flawed: Sure, I would do some due diligence on the company, its cash flow etc, operations etc. As a good headhunter would discuss the equivalents in a candidate: How much does he/she contribute to profits, and how did he/she do the job?

Needing to know the salary history is somewhat like valuing the company based on share price history, rather than assessing what it is worth now and how it will fare in the future.

Judging Scott fromhis writings here, revealing my salary history to him probably wouldn’t be too dangerous. But how can I know in advance that the HR rep doesn’t abuse that information, as has been shown in the posts of several threads? The company must first show me that it is thrustworthy.

By Jason
March 18, 2009 at 10:07 am

Nick,

Well I was just asked for my salary expectations in a job I applied for. Like you suggested, I politely declined to provide the information.

We’ll see what happens.

As it turns out, I am not in the same position with my current job as I was when I initially applied for this position, so I am not as desperate to find something. Quite frankly, to take this job would require an offer substantially higher than what I currently get paid.

All that said, this is the very first time I’ve not divulged my salary history. The last time I divulged it willingly but only because I knew salaries with my current employer tended to be lower than I was getting paid at the time. I wanted to be sure they understood what it would take to pay me to come on board. And that did work. I knew some information already about their salary scales and I knew I would be on the high side of the scale.

In the past, however, I know for a fact that I basically threw $10,000 in salary away at a previous job precisely because I divulged salary history…

This time I’ll find out what happens when you don’t.

By Edward
March 18, 2009 at 11:57 am

I can’t bite my tongue any longer. Reading this thread and the one on Punk HR, I have noticed that not once did any HR person discuss the bottom line impact or ROI of their methods. I don’t know about the rest of you, but if I can not demonstrate why my method is the best in terms of profit generation, it’s not getting used! In general discussions in marketing (my area), the ROI of any project is generally something you know off the top of your head, reading the discussions it seems that is not the case with HR. So how can they justify a method as being best for a company when they have no financial impacts to back it up? Really, as a manager, that’s what I’m looking for from HR, show me the money! And I’m not talking about you saved me $10k by low balling a candidate, sooner or later they will find out they got low balled and then I get to deal with their bad attitude because they know we screwed them over and I say we because they never see it as HR screwed them over, it’s the company that screwed them over. I want people to be motivated to have passion, if they feel we screwed them on pay, that only makes my job 10 times harder in terms of leadership. That $10k you saved, may cost me $50k in productivity, so there was no savings.

These threads have shown me how out of touch HR is, where I work, the only time I see HR leave the HR area, is for lunch. They have no clue what a product manager does all day because they never spend the time getting to know what it really takes to do the job! I call that being out of touch. So they rely on things like salary history because they lack the experience to know what skills and personality traits to look for in a good product manager.

Here’s the thing HR people, as a manager, I need you to have a process that treats candidates like customers because you know what, some of them are going to get hired by customers or vendors and I don’t need to deal with their bad attitude because you left them feeling we treat people like garbage. Poor interviewing experiences DO cost us money when those people decide to be difficult at their next job in dealing with us and in my current industry, it’s a small world, this does happen! So now when the sales rep goes in to make a sale, that former candidate makes life difficult and we end up spending more time and money to close that sale than we would have otherwise. That’s not a good thing! Cause and effect is very much in play these days, if not asking for salary history will leave the not chosen feeling at least at the minimum, neutral about the company, then so be it! I would rather have neutral than hostile because it is a lot easier to sell to neutral than hostile and neutral has better sales ROI than hostile.

I need good ROI, that means, find me people with the skills I need to get things done in a profitable way. I don’t care what they made elsewhere, I want to know, what are they going to do to solve my problems now and tomorrow. That means you HR, have to know what it is we do all day and what makes a good candidate. In all my years, I have NEVER seen HR come and try and get to know what it is we do in marketing, not once. Yet they think they know how to hire for our jobs? Most can’t even tell me the difference between a product manager and a channel manager so to me as the hiring manager when HR tells me they “need” salary history from candidates, I know HR has no clue what they are doing. Why? I have a budget, I know what I can afford, what’s your salary expectations, give me a range, I want to know that, here’s my budget range, are we in the same ball park, if no, fine, have a nice day, if yes, lets keep talking. Next, tell me how you are going to solve my problems? That simple question works wonders, it tells me right away, did they even do their homework and how do they think or solve problems. That simple question gives me more information than a 2 hour interview of the old method of Q&A. 15 minutes vs 2 hours, don’t know about you but I generally don’t have 2 hours to spend on 5 candidates, but 15 minutes on 5, sure.

HR, you need to step up to the plate and realize that the hiring process is a sales and marketing process, candidates are customers and potentially future business partners in other companies. Treat them poorly and you are only doing the entire organization a disservice. Even if not chosen to work for us, they should still feel good about their interactions with us. Some of the comments by HR people here and on Punk HR, to me as a marketer, I know their attitude and methods would leave a negative impression. So now all that money we spend on branding and marketing is being wasted on them and anyone else they tell, all because you want know their salary history? That does not create a positive ROI. Find another method that does create positive ROI.

By Sizzling Salary Disclosure Discussions | Career Management Alliance Blog
March 18, 2009 at 12:37 pm

[...] under salary on March 17th, 2009 Check out this great post on salary disclosure from Nick Corocodilis on Ask the Headhunter as well as the 100+ comments around this subject on [...]

By Jason
March 18, 2009 at 7:47 pm

Edward,

What a wonderfully written indictment of modern HR practices. You are absolutely correct.

Every time I’ve hired people onto my team, HR has been more of a hindrance than a help. And don’t get me started on how unhelpful they were when we had to deal with a problem employee…

By Karsten
March 19, 2009 at 5:59 am

A citation by the HR rep, from the newsletter linked above:
“Some employers want the information because they believe that if you made $30,000 in your last job for a like position which for them starts at $50,000, they’d be overpaying and want the opportunity to buy you for $35,000 to start.”

Can some HR rep please tell my why I should help a company screw me for $15K?

By Suzanne
March 19, 2009 at 3:21 pm

I’ve been keeping my eyes open and I haven’t found any empirical evidence supporting salary disclosure as a sound selection practice.

By scottthekyhrguy
March 19, 2009 at 4:29 pm

Karsten,

If they’d be overpaying by $15k to hire you at $50k, is it fair to say you’re helping them screw you? If they’re working with a ceiling that’s 30% higher than the reasonable band for the position they have a pretty poorly considered compensation strategy, but they’re not screwing you. They’re just not giving you a salary that works out advantageously for you. The net result is the same, but the situation is being mis-cast. Further, if we’re paying you more than your skills and contribution level are worth, you are the first person we’re going to lay off if there is a downturn in our business. Unfortunately there’s been a big downturn in chemical manufacturing and refining, so we’ve seen a big correction in salaries in jobs that were paid at a level not commensurate with skill sets.

In 2000 how many java developers went from $75 to $100/hour consulting gigs into $25/hour help desk jobs where they were grateful just to have a paycheck? Was that a mass “screwing” or a correction of a pay scale that had gotten out of hand?

Edward — I’ll reiterate, this isn’t about using salary history to mandate the salary of a hire. It’s about using progressive levels of responsibility as factor in candidate evaluation. Titles are frequently poor indicators of role. Am I really to believe that anyone here doesn’t look at the earnings history of a company before buying stock in it? Growth stocks are bought at a cost based on expectations of future performance and because the investor sees a bright future. Stocks of companies with a longer history are often evaluated on historical P/E and future potential. Smart investors consider all of the above and put their money where they think they’re getting the best value. Why would I look at a candidate for employment any differently? My job is to attract, hire, develop and retain talent that can help my company grow and profit. We frequently hire people who have obtained a certification, a bit of training or some other kind of self-improvement that warrants a big jump in pay because we believe they’ll be worth that jump based on what they now know or a leap in responsibility we’re expecting them to take.

Which brings me back to my original point… nobody’s saying “pay somebody what they’ve always earned plus 10% regardless of the circumstance,” or “hire someone because their wage history shows what you think someone in this role should show” or “don’t hire someone because they’re refusing to disclose wage history.” I’m saying get as much data as you can before you make a hiring decision and make the smartest decision you can based on that data.

By Edward
March 19, 2009 at 7:08 pm

Scott

I don’t view people as stocks, stocks are things, people are not. But if you want to look at the numbers you miss what goes on that drives the numbers which are far more important, those are attitudes, perceptions, ability to process information, passion for work, motivation and skill. If you looked at AIG 2 years ago, by the numbers, P/E, historical data and analyst reports, it was still a great buy. If you looked at how they ran things, i.e. going to what really drives an organization in the areas I mentioned, you’d see there was trouble coming. From $63 to $1 in two years. Two years ago, by your example, you would have bought AIG, by my method, I would not.

People are not stocks they are people, they have feelings and attitudes and they are customers too, even if they are not buying but looking for a job, you need to ensure they have a good experience with the company, as HR, you are as much in sales and marketing as the account manager or brand manager, you are the first experience many people have with the company. Like I said, it’s a small world out there, a candidate today can be a customer or vendor 6 months from now. I don’t need bad HR practices running up my sales costs to over come the bad experience HR gave that candidates 6 months ago. You can say it is unprofessional of them all you want, the fact is, this goes on all the time. HR doesn’t experience it but those of us on the front lines bringing in the cash, we do! For every unhappy customer, that costs me 3 times as much to win them over as a neutral customer, 5 times a happy customer. Does your method justify that additional cost when you create ill will with a candidate? Not from where I’m sitting and in this market when we have to watch every penny, yes, that is a cost that hurts, a lot!

Unless HR can quantify to me how their methods of invading the privacy of candidates/customers is making the company more money than the cost, your case falls flat. There are better methods (I’ve used them and I have run the numbers) to determine the best candidate. 214 hires, 1% turnover, 80% increase in customer satisfaction (in a service environment employee moral is directly related to customer satisfaction), 25% increase in profit while competitors where flat. These were white collar positions, all college and graduate level positions, office environment. Can you do better with your methods? Lets talk real dollars here because at the end of the day, that’s what matters, the revenue and profits of the process. Everyone wants the best bang for your buck and so far all I’m hearing is a view from HR that doesn’t take into account the full costs of their actions. HR impacts brand costs, marketing costs, sales costs, PR costs, operations costs, etc… The ill will generated in a bad interview experience has an impact on all those costs. Just the same, a good interview experience can help us reduce those costs. Imagine someone who interviews, didn’t get the job but felt even though they didn’t get the job, they liked how they were treated. They may take a job at a vendor or client, that experience can help us sell or deal with them in ways that help us reduce our costs. Or they may get more experience or a degree and remember how well we treated and wish to try again and this time, we may have a need for them, this is what I want from HR. But that means HR needs to get out and learn what works best. I have NEVER had anyone in HR come and ask me how to improve the interview process for my areas I lead, not once. They have no problem telling what we will be doing, how they think they know is beyond me because they feel they don’t have to explain all that much. When I launch a new product I do market research, voice of customer, stakeholder buy in, etc… From my experience, HR doesn’t; maybe some do, I certainly have not met them.

I won’t give out my SS or any sensitive information that can be used in identify theft until I know they are serious in an offer and have assurances on data safety. Does that mean I have something to hide? No, it means I’m smart about my risks and take steps to protect myself. This is very much a common stance and a smart one! As a manager, I’d want a candidate to think that way too! We handle sensitive client info all the time, I don’t want my people being the cause of handing out sensitive information of customers because of the legal and PR nightmare (not to mention the lost revenue and profits), and if they are cautious about their personal information, that shows me they at least can make that mental leap fairly well to do that with customer info because they can recognize the need for data security. This is the reality of today, data is power, you need to realize you don’t have a right to some of that data just because you want it.

Also, on the 10% issue, yes companies do that, I’ve run into them. I know from personal experience some companies do this. I had this experience for a position that required an MBA and management experience, this wasn’t a low level position but company policy was 10% above your last pay. I didn’t take that job.

By HR Not With the Program | Echenard
March 19, 2009 at 7:25 pm

[...] Anyway, you can see the conversation and my posts, I’m the one going by the name Edward, at this link [...]

By Nick Corcodilos
March 19, 2009 at 10:35 pm

Jason:

**Well I was just asked for my salary expectations in a job I applied for. Like you suggested, I politely declined to provide the information.**

Please note that while I advocate against divulging current salary or salary history, I actually think it’s a good idea to state a desired or expected salary range. Otherwise, it’s hard to establish enough common ground to keep talking. The company could state the range it wants to spend, but why argue over who oughta spit out the “desired range” number? Both should put that on the table, if only to justify further discussion.

I think a candidate should have a good idea of what s/he is worth. (Or at least what they want.) Of course, the nature of the job might justify asking for more later, but even then, you’d have to justify the request. What drives me crazy is people who ask for more money just because they think “that’s what the employer expects.”

The approach I like is: “I’m looking for between $X and $Y, and if I can’t show you why I’m worth it, you should end our discussions. And if it turns out the job is really more than it seems, and I ask for even more, I don’t expect you to pay it unless I can show you how I will add that much more value to the job. Fair?”

Now, THAT is the start of an interesting discussion.

By Nick Corcodilos
March 19, 2009 at 10:48 pm

Edward,

You’re absolutely right when you characterize job candidates as people who influence others after they leave the job interview. I wrote about this quite a few years ago, but the story is still valid. “Death By Lethal Reputation” is at http://www.asktheheadhunter.com/halethalrep.htm

When a company treats a job applicant badly, word spreads quickly. The well is poisoned.

By Nick Corcodilos
March 19, 2009 at 10:52 pm

In this discussion thread and others on this blog (about the salary question), I’ve yet to see one credible reason why HR **needs** salary history or why a candidate **should** provide it. I think people have made it abundantly clear that they are willing to pass up “an opportunity” if it means destroying their own negotiating position. But I’m still listening…

By Jason
March 20, 2009 at 11:01 am

Nick,

Had the discussion over salary expectations on the phone with the opportunity I was pursuing.

As it turns out, our ranges didn’t match. BUT, I got to have a 30+ minute conversation with the person in charge of a site that I would very much like to work at some time in the future.

Now they know that I’m interested in them and I know more information about their operations. Refusing to send an email with my salary expectations led to a discussion about the employer and their (very interesting) job site.

I think it was very beneficial to take a firm stance in this.

By Nick Corcodilos
March 20, 2009 at 12:03 pm

Jason,

You have just demonstrated what people knew long before we had telephones, e-mail, and the Net. A demonstration of high standards (and high expectations) reveals value and leads to doing business. You showed these people that you’re not a cow.

(See http://www.asktheheadhunter.com/crocs19cows.htm)

Just because a medium encourages the exchange of meaningless questions and information doesn’t mean we should play along…

Nice work! Good gigs start with substantive conversations about “the work”. It may take a year or two or more before anything develops. But you have made a good contact. My advice: Stay in touch with this person. Share useful info. That’s where referrals and recommendations come from.

You probably realize that you just had an interview. Now try one of the ideas here:
http://www.asktheheadhunter.com/hasticky1.htm

There have been lots of great posts on this thread. Your story is the kernel of my entire message. Thanks for sharing it.

By scotthekyhrguy
March 20, 2009 at 12:39 pm

Ed — no, I don’t see people as stocks. And you missed a crucial part of the metaphor.

**Growth stocks are bought at a cost based on expectations of future performance and because the investor sees a bright future. Stocks of companies with a longer history are often evaluated on historical P/E and future potential.**

AIG did have a solid earning history. You shouldn’t have bought AIG based on that. You should have used it as a consideration and then tried to make an informed decision on what you thought it would do in the future. You can’t in one statement tell me you’re thinking about hiring in terms of ROI, but not allow me to use stocks as a metaphor. Stocks are not things. They’re shares in a thing that demonstrate an investment in the future of that thing. A salary does not a person define, but it does reflect what I think that person will be doing and/or an investment in what I think that person may do in the future.

I’m not assaulting anyone with the question and, I can assure, it’s never asked in a hostile manner. I think you’re reading more into what I’m saying than is there. You think I’m wrong. Try as we might, I’m not convince even in the slightest that your approach is the best for my company. You think my approach is wrong. You have interesting stats and I commend you for your hiring accumen, but it’s insanity to suggest that your 1% turnover is derived by your refusal to ask for salary history. I would suggest it’s because you do a thorough job of explaining what the job will require, interviewing people with appropriate questions about how their skill sets might align with the role for which they’re hired, and maintaining a network within your industry that enables you to get “real” references on the folks you hire. Correct me if I’m wrong on any of that.

By abileneblues
March 20, 2009 at 7:09 pm

Scott – I think part of the problem is that you’re the only guy defending the entire HR side. As others have said, I think you and your company are smart to not drop candidates from the pool over refusal to disclose salary history.

However, you are bringing it on yourself. Rather than attacking others’ analogies, provide a clear one that shows the necessity of even asking for a salary history. Since you are not requiring it yourself, I cannot see a reason that works to the candidates advantage, only those that work to the company’s advantage.

We have to be honest about this. As an applicant, my goal is to get as much as I can for my work. The company’s goal (generally) is to get as much talent as possible for as little cost as possible. That puts the applicant and the company on different sides of the bargaining table.

It’s disingenuous to pretend that there is not a power differential at that table, especially in times of economic turmoil. Of course, nobody is forced at gunpoint to continue a hiring process with which they disagree. In reality, the hiring manager knows that she has something that the candidate has to have. We all know that by far the majority of people in the US are one or two missed paychecks away from some serious hurt. I may be wrong, but I can’t imagine that the job market is flooded with people who are just seeing what’s out there, but by people who are in an extremely dissatisfying situation, in need of more money or simply needing a job at all due to layoffs, etc.

Nick –

I don’t think it was wrong of Jason to decline giving an expectation, depending on where in the process he was. I’ve always wondered why companies put this on applications when they have not posted the budget/salary range to be offered and given the applicant nothing more than a vague job description as input. The company I work for does this and I’ve often been amused by the responses to that on applications I receive as a hiring manager. It does make it obvious that some people didn’t even read the job description and that others simply have no clue whatsoever.

Even after the interview, I don’t necessarily think the candidate should be able to just throw out a number, especially if they’re from out of town. It helps considerably, though, if the candidates have good questions to ask about the costs of living in the city and especially if the hiring manager can talk about any specific costs involved in working for their company (parking, commuting, etc.).

But eventually, somebody has to put their cards on the table.

By Karsten
March 21, 2009 at 3:40 pm

Scott wrote:

“Karsten,

If they’d be overpaying by $15k to hire you at $50k, is it fair to say you’re helping them screw you?”

Who defines what “overpaying” means? It’s in the eye of the beholder. Sure, if a company can get a worker for $35K for a position it expected to spend $50K on, that’s a good bargain for the company. For the candidate, being paid $35K for a position one could have earned $50K in, because the company (ab)used salary history info to lower salary – yes, that certainly feels being screwed!

And that’s why the Dilbert cartoon is so popular.

“Further, if we’re paying you more than your skills and contribution level are worth, you are the first person we’re going to lay off if there is a downturn in our business.”

I agree – but WHO decides what I am worth? Does your company assess me and my skills independently – or do you use the number from some other job, in which the lower salary may have a thousand reasons (bad management, different location, different work, company has less money etc…)?

In the latter case, you are simply lazy.

By Karsten
March 21, 2009 at 3:42 pm

Scott wrote:

“Further, if we’re paying you more than your skills and contribution level are worth, you are the first person we’re going to lay off if there is a downturn in our business.”

And if you are paying me less that I think is fair, I will be the first guy out the door when times improve.

By Edward
March 21, 2009 at 9:22 pm

Scott

I did not miss anything in the stock metaphor, you actually pointed out what HR does when looking at salary history in regards to AIG and said it was incorrect. You stated: “AIG did have a solid earning history. You shouldn’t have bought AIG based on that.” That is what HR does when looking at salary history, they look at earning history. And yes, stocks are things, we trade things, we don’t trade people.

And yes, I can talk of ROI and not look at salary history because salary history doesn’t tell me what they can do for me, it tells me what someone else put a value on that person for. There are a massive number of variables that go into that number, and most you have no access to, so you are just guessing and guessing is bad business. So I find ways to test potential ROI and I really don’t rely on the past, but current performance and current expectations. You can test that, I do it all the time, I find it far more accurate. This goes back to the heart of my question, someone in HR show me the numbers of what makes their methods so great. Here and on the other board, nobody has. What sales manager, product manager, finance manager can do their job without quantifying their results in hard profit numbers? I don’t know any, so why can’t HR do the same? I’m not attacking, I’m asking.

And Scott, I am not here to convince you that my approach is better for you. In fact, I am sure we do not work at the same company, so if you use a method that is not as good as mine and you happen to be my competitor, it all works out in my favor if you keep doing what you are doing. I’m here to discuss the topic, not what is best for you, so don’t take it personal.

And no Scott, my 1% turnover is derived from understanding my target market of potential hires, my needs, my company’s needs and created a system that achieved the best results. One of those needs was to bring candidates into our interview process and treat them with respect and professionalisms, that means not wasting their time on filling out an application before we even talk (a serious waste of paper and time). Why have the information security risk before we even think this person is a fit? Second, we don’t ask for things like salary history, we don’t do credit checks, we do a background check. We also do a live test of their skills. Having worked in education and marketing, you learn how people like to inflate things, can’t blame them, the system pretty much begs for it. We spend a lot of time on our real work tests during interviews, it gets what we want. Why? I know people who climbed the ladder and don’t know much because they coasted. They can talk the talk, salary history shows nice progression with six figures, but when it comes to the rubber hitting the road, not much is. The current HR system allows these types to get good jobs, mine, I’ll take the guy with half the experience and twice the drive and I’ll pay him for the results. What I see is gets to the heart of what I’m looking for: Can they do the job? I can spent 4 hours in interviews the old way and not get that answer because HR never asks. Also I learn, how they handle pressure, uncertainly, change, the unexpected, all of which are pretty common for us. A nice sit down interview being asked to tell me your weaknesses, don’t tell me any of that. Do some people hate it, sure, chances are they would hate the job too if they got it. Or, they really can’t do the job, but man they can talk the lingo great! Or we get those few who come in and show us something totally new and we are left saying “wow, how do we find a place for this person?” The people in the latter group, if they made $50k last year and asked me for $100k and it was in an area where I knew I’d make millions with their skill, hell ya I would hire them at $100k and throw in a nice profit based bonus to put some fire in them. I might spend $150k in salary for that person but if they bring me $5MM in new business, well worth it.

By Chris
March 22, 2009 at 9:08 am

I work as a design engineer for a small medical device design company (<100 employees). The owner is very insistent on all candidates revealing their entire salary history.

When I got to that stage of my interview, I held firm and did not reveal my salary. Those were a few very tense minutes as the owner and I sparred over the justification of revealing salary history. (In real life, the only reason is to enable the employer to lowball an offer. All other reasons are rationalizations.)

In the end I prevailed, got an offer, and four years later, aside from the micromanagement, the job is still one of the better ones I’ve had.

However, one point that I have not seen made on this subject is that employees talk. Especially when they are frustrated with management or feel taken advantage of. Sometimes that is enough to compel one to share their salary info with a colleague.

In this way, I have learned that in my group there are two other engineers doing the same work I do (just as well, I will add) for about 30% less. (For the record, to save embarrassment I’ve not shared my info.)

So good for me for holding firm on the salary history, but my colleagues are talking, and they are disgruntled because they feel that they are being taken advantage of.

I’m sure the owner of the company thinks he saved a bunch of money getting them at a discount, but they are not at all happy, their drive is sapped, and now they come in, do their work, and go home. One engineer we hired three years ago would call me or one of the other engineers off hours any time he had a new idea and wanted one of us to bounce it off of. Those calls stopped after about a year. And creativity across the entire department has declined noticeably (to us at any rate).

So I wonder how much the company is saving now by the lowball salary offers?

By scotthekyhrguy
March 22, 2009 at 12:53 pm

Edward — you are only including part of my statement, which doesn’t offer full context. I said: “AIG did have a solid earning history. You shouldn’t have bought AIG based on that. You should have used it as a consideration and then tried to make an informed decision on what you thought it would do in the future.”

The third sentence was really the important one.

Karsten, I agree with you 100%. If you’re undercompensated based on what you contribute to your employer, you should go work for someone who will pay you what you’re worth. When unemployment is very, very low, companies hire people for more than they’re worth. When it’s high, employees take jobs to get a paycheck that might not be in line with what their worth is. It IS cyclicle and that much I will state as “tautology.”

I can conduct salary surveys. I can benchmark internal data. I can (and do) do all kinds of things to ensure that we’re in the meaty part of the curve — right where my unit president says he wants us to be. But external surveys are always a lagging indicator. The “freshest” data I get, whether you agree with it or not, tends to be from candidates.

Another consideration that I should have thrown out earlier that might help you understand my context — I work for an engineering services company. We bill our time based on a multiplier over base comp, so there is a level of transparency in salary in our industry that is unlike anything I’ve seen in working for operating companies or companies that make “stuff.” Any project manager, with enough deductive logic, can look at his project costs per person and get a prett darn good idea of what each person earns. What we pay each person is a direct reflection of what our clients will be paying us, so the post referencing price match guarantees actually has some unfortunate but direct application in my industry.

This is a PETA presentation at an NRA convention (or an NRA presentation at a PETA convention depending on your perspective). I don’t expect I’ve changed any minds. You haven’t changed mine either. But it’s been an interesting conversation. Neither side in this discussion is “right.” We have opinions that are based on the roles we fill in our organizations.

By Karsten
March 25, 2009 at 8:03 am

Scott,

It’s Ok for me as well to quit the debate now. Kudos to you for stepping up!

I think it boils down to different roles: Your company may have several reasons for wanting salary history. However, because that salary history can be abused by the company tho lower salary, from a candidate’s viewpoint the only good reason to tell, is if one desperately need a job and the company abuses its power to deny candidates that do not provide such history.

Ok, nuff said :)

By Bryan
April 6, 2009 at 10:40 am

Coming late but summing everything up, it’s a two way street. I’m avoiding applying for a job that I am well qualified for because their online application requires me to post a salary history. I think Nick is saying if you demand history, post range first then be prepared to explain if a candidate asks why their offer lies where it does in that range. The argument that people taking a pay cut in this economy will leave as soon as it recovers is bogus. This is a chance for companies to bring in highly qualified workers and taste test them at a lower salary then they would have to pay in better times. If they do a good job for you then it is up to the company to retain those workers.

I’ve turned down 10% increases in pay to stay at an organization I loved vs one I had heard bad things about. In better times, you would never have had the chance to recruit these people at these salaries. A company that demands salary history with a willingness to divulge the range speaks volumes about the organization and its distrustful nature.

Bottom-line is I’m an expert in my discipline. If I were caught up in a reduction in force, I would be prepared to take a pay cut, not just to keep a paycheck, but to keep my skillset sharp. If an organization had a great culture and other intangible benefits beyond big paychecks, another company would have to work very hard to recruit me away even at a higher pay. Organizations that won’t either put up or shut up are probably not the organizations that will recruit and retain top talent anyway because that alone speaks volumes about the company. They are known as stepping stone companies where people go to grow or hone their skills and leave for better opportunities elsewhere.

By Mary
June 29, 2009 at 7:16 am

Interesting discussion. It reflects a nearly 200 year history of traditional linear career thinking whereby principally male professionals, perhaps starting in the mailroom of a company, worked their way up through the “ranks”, in the same company, with ever-increasing “responsibilities” and perhaps ever-increasing salary. At the point an individual moves to another company, presumably in a similar industry (reflecting “career”), he or she would expect a salary “comensurate” with the experience and knowledge gained.

The reason that salary histories are, and probably always should have been, irrelevant, is that they do not at all reflect talent, skill, experience, common sense, knowledge, or ability. And there is seldom a better time than during economic downturns caused by inept managers earning 6-digit (US-based) salaries, or better.

I’d love to see this discussion turn to new and better ways of valuing individual performance–both in and outside of an organisation. My own salaries have run from less than 700 USD per month to as much as 8000 USD per month. My CHOICE has been to take time to develop myself in multiple disciplines that I feel create a better-qualified professional. Sadly, I’ve met few HR professionals who seem to see the value of multiple and diverse experiences–despite all of the talk today about innovation, creativity, entrepreneurship, and lifelong experiences. From the halls of academia to the boardroom, employers continue to prefer the individual who has spent 20-30 years in a single specialization.

How will those following “boundaryless careers” be valued?

Cheers.

By Bruce
September 21, 2009 at 4:18 pm

Disclosing salary or even salary expectations to a potential employer gives too much power to the employer. If the candidate gives a number lower than what the employer is willing to pay, the employer has ample room to make a lowball offer. If the candidate gives a number higher than what the employer is willing to pay, the employer might not consider the candidate further because they think the candidate will not accept something significantly lower – which is not necessarily true at all.

I don’t think a candidate should disclose anything regarding salary history or expectations until the employer at least gives a reasonably tight range of what they consider to be a fair salary for the position.

By Paul
December 8, 2009 at 3:25 pm

I am an HR guy and in my 25 years of interviewing and hiring I NEVER needed the candidate “data point” – salary history. Instead we determined the market value of the job, established a range that reflected the skill set required and then assessed SKILLS against our needs. Our policy was to share the range with the candidate. Did this ever hurt in recruiting? No. We were always able to find the skill set. That’s what “competitive wages” means when listed. As for the data point it may give the HR department, that data is collected in wage and benefit surveys – not from candidates. Any company that starts recruiting without knowing the value of the position, and a willingness to pay the market rate is unscrupulusly seeking to low ball the candidate. And we know what that yields.

By Nick Corcodilos
December 9, 2009 at 6:01 pm

@Paul: **I am an HR guy and in my 25 years of interviewing and hiring I NEVER needed the candidate “data point” – salary history.**

You just made my day. Maybe my week. Thanks for posting this. Kudos to all HR folks with integrity.

By Salary Discussions – Career Sherpa
February 25, 2014 at 4:40 pm

[…] So why do they (employers) want to know? The easy answer might be that they want to know whether you are in their price range or not.  Could there be other reasons too?  (For a truly interesting discussion on this and the topic of salary history requests by HR, you have to read Nick's post and comments on Ask the Headhunter) […]

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