A reader writes:
Going on so many interviews lately for jobs that I am well-qualified if not overqualified for, I keep getting salary responses that would pretty much allow me to break even. Whoopidy doo.
If I ended up taking one of these jobs that pay way below what I was previously making and stayed for a year or so, would it potentially damage my chances of getting a significantly higher salary when I switch positions? Do companies base what you will make with them based on what you previously made (along with their budget and your skill sets, of course)? I was always taught that when you change jobs, you should never accept less than what you were making before. Based on the economy and job crisis, I'm not sure if that is even legit at this point.
The answer will be quite unsatisfying: It varies.
Some companies will demand to know your salary history and will resist giving you a substantial increase. Others -- the more sensible ones, I would argue -- will base their salary offer on the market, and could care less what you were making previously.
However, I suspect that, as you point out, the economic crisis may be rewriting the rules on this. There are a lot of people who are in the situation you describe and who will be taking pay cuts due to the sheer awfulness of the current climate. When the economy picks back up, those people should presumably be able to find jobs at higher salaries again. I think it will be quite normal to explain to a prospective employer that -- like many people -- you took a lower salary when jobs were scarce, but that you've always used the market to inform your salary expectations, and the market now says that a reasonable a salary for this job is in a higher range.
If an employer doesn't get the logic of that, I question whether they're an employer you should want to work for anyway.
By the way, there's also a school of thought that says your salary history is no one's business but your own. I tend to agree. An employer should pay based on their assessment of your value, not what their competitor thought you were worth.