Comments on: The real reason employers want your salary history: Hiring is a crapshoot

By: scottthekyhrguy

scottthekyhrguy — Sun, 05 Apr 2009 00:11:59 +0000

Karsten — you’re dead on target. The NLRB has consistently found that prohibition of salary and benfits discussions constitute union busting. A big no-no and a sign of an HR department that doesn’t understand the liability for writing bad policies.

Tacky to talk about money with your peers? Maybe. But it is more or less your right to be tacky.

By: Two takes on cluelessness. -- Hoover’s Business Insight Zone

Two takes on cluelessness. -- Hoover’s Business Insight Zone — Fri, 03 Apr 2009 22:46:47 +0000

[...] 2. Corporate recruiter Nick Corcodilos thinks that “[hiring] companies demand salary information because they don’t know how to run their business for profit”: The real reason employers want your salary history: Hiring is a crapshoot [...]

By: j

Wed, 25 Mar 2009 18:03:23 +0000

Possibly—although I don’t think my industry (advertising) has ever had unions.

By: Karsten

Karsten — Wed, 25 Mar 2009 12:30:59 +0000

I see the logic for your company, but not allowing employees to talk money even to each other seems extreme.

I would suspect such a rule to also be a part of a union busting scheme, a split-and-rule tactic: How can people join together behind complaints if they are not allowed to talk enough to identify the problem?

By: Nick Corcodilos

Nick Corcodilos — Tue, 24 Mar 2009 18:17:44 +0000

RE: Salary NDA’s

I’m not a lawyer (so here I go getting into trouble), but I imagine the business logic is simple. Compensation is kept confidential because it’s a competitive advantage. A company believes that what it pays (high or low) gives it an edge that it does not want to compromise.

Ironic, isn’t it — because the same company probably asks applicants for their salary history.

By: j

Tue, 24 Mar 2009 17:32:27 +0000

P.S.—In fact, I suspect that if more agencies in my profession insisted that their people keep their salaries confidential from future employers, then the entire industry could get away with paying much lower salaries across the board.

By: j

Tue, 24 Mar 2009 17:26:24 +0000

The clause that includes salary in our confidentiality agreement helps minimize exposure of our (independent) company information to our (publically owned) competitors when they occasionally try to poach our people. Because we charge our clients based on a percentage of profit above our cost structure, rather than the (much pricier) fee-based invoicing of our (less profitable) rivals, keeping our cost structure undisclosed provides a significant competitive advantage.

(I don’t know the legal technicalities involved in enforcing the clause; if a lawyer wants to chime in on that, I’d welcome the perspective.)

By: Bob

Bob — Tue, 24 Mar 2009 16:25:51 +0000

OK, BJ, I’ll bite.
What is the legal basis for having a clause around salary in a confidentiality contract or even in a non-compete? I don’t expect you’ll know the answer to this. Perhaps a lawyer could help out here.

In the meantime, I support your position. You needed to keep it quiet.

By: j

Tue, 24 Mar 2009 16:23:12 +0000

Bob, when I got hired, my company strongly emphasized the fact that its confidentiality agreement includes salaries—which legally bars me from revealing my salary to potential future employers. And revealing my salary to anyone within the company would get me immediately fired.

So, salary confidentiality isn’t always just an assumption.

By: Edward

Edward — Tue, 24 Mar 2009 16:12:31 +0000

Exactly, know the profit impact of a new hire. As a manager, a new hire is no different in terms of profit impact than launching a new product or service. You should go through the same rigor of analysis as you would a new product launch. After all, productivity is a key measure of a departments performance in many companies, so understanding what kind of skills and knowledge is needed to impact productivity in a positive way, is key. This way you really know why you are hiring someone and this gives you the best possible position to go into an interview. With all that information at hand about what you need and your company needs, you can really get to the heart of the conversation with a candidate.

When I hire for a sale person, I know the quota for their territory, the past performance, expected performance, etc… So it is pretty easy to come up with a budget I can afford to pay someone and I know what kind of skills I need for that role because I have done my homework of analyzing what has made good and bad sales in the past based on the client demographics. Most of this data is available to those in sales and marketing, at least in a well run organization. I know many established companies that don’t have such information, but you probably want to avoid those companies in general.

I will say that in my field of sales and marketing, a lot of old school or maybe just lazy managers, don’t want to bring in the financial rigor that is being demanded of us. This only hurts their position. Sales and marketing, especially the marketing side, has had to become more quantifiable over the past decade. I find this a real positive. But I still find when I informational interview, a lot of managers in the field who don’t want to be measured. So I wouldn’t expect their HR department to be any different when it comes to hiring for positions in those areas. If HR is using old tactics like asking for salary history, try and sit down with the hiring manager and see what their style is, if they are using out of date methods as well, you need to question if that’s really a fit for you.