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Sunday, November 29, 2009

how to handle requests for salary history

A reader writes:

I am searching for a new position and more than half of listings require salary history. Not even requirements but history, which I think is completely unjust and I typically do not give out because a) it’s confidential, b) it’s excessive in wanting to know about the applicant and c) if my future salary is to be determined by my past salary, I would be broke for the rest of my life because I was grossly underpaid!

But some companies insist on it, including a few companies I badly want to work at. And since I can’t be unemployed forever, should I…. a) surrender my principles and submit a history and b) if I do, can I slightly exaggerate the numbers? Like I said, it’s confidential and the company cannot ask others about my financial record so they wouldn’t be able to find out.

Well, there's how things should be and then there's how things often are.

Personally, I believe that your salary history is no one's business but your own, and that employers should pay based on their assessment of your value, not what their competitors thought you were worth. And I think that insisting on salary history is the mark of a lazy HR department.

However, the reality is that many, many employers do require it. And some will discard you immediately if you don't provide it. So you have to decide if you want to hold firm on not giving it out and risk not being considered, or whether you're willing to compromise in order to possibly get the job.

If you decide to hold firm, Nick Corcodilos has a lot of advice on how to do it (as well as some impassioned treatises on why you should). You can also try saying that you committed to your past employers to keep your salary confidential, and you need to honor that.

But some employers will end things right there, so you need to be prepared for that. It's possible that this is a sign of an employer who you don't want to work for anyway, but it's also possible that they just have a bureaucratic HR person. So you need to decide how important this is to you and how much risk you're willing to take on.

But one thing you can't risk: lying about the numbers. If you give numbers, they must be accurate, since if they find out later that you lied, employers can and will yank job offers over that, because it speaks to your integrity -- in fact, they can even fire you after you've been hired if they find out you lied in your application materials. And they can indeed find out; some companies actually ask candidates for W2s or other documentation of the numbers they gave, as part of the offer paperwork. So either tell or don't tell, but don't lie.


Anonymous said...

Funny, I just applied for a job that asked for my salary history. I supplied it, as well as my desired compensation for the position offered. There's a significant increase between my current salary and what I think I'm worth (based on online research), but now I'm wondering if I should log back into my employment profile with the company and adjust the range so as to not to appear too demanding...

Anonymous said...

My current employer asked for my salary history, and I gave them the truthful answer. It turned out to be a good thing, too, because I was able to use it to my advantage.

When they offered me a job, they low-balled the salary. They offered me less than I was currently making. I rejected the offer point-blank. I told them there was no way I was accepting an offer that is less than I was currently earning -- reminding them that they knew that amount -- nor would I accept an offer that that did not factor in the significant difference in cost of living (since I would be moving to a high-cost location). (Cost of living figures are easily found online.)

They asked if they could call me back in two days. They did, with a very sweet offer that I ultimately accepted.

Evil HR Lady said...

This is true. My husband had a job where a condition of hire was that he produce the last 5 (!!!!) years worth of W2s.

He wanted the job, so he did it. Turns out the company was as lame as one would expect. (Although he did learn a ton there.)

Magpie said...

Even though I am not "entry level", I still find myself having to fill out applications that have a space for salary history. I usually leave them blank (along with SS#, I can't stress that one enough. No one needs your SS# unless you are employed by them, keep that private!), but on a recent interview I was told that their legal department needed a "complete application without any blanks" otherwise they couldn't process it. Riiiight. Being unemployed, I had no choice but to comply and scribble it in.

Given my experience, I asked for salary at the top of the range they were giving (which is way more than fair for what the position entails) and they didn't scoff at it. Went back for a second interview and now have to play the waiting game.

Its BS that its "OK" to ask for this type of information. This and credit checks really get my blood boiling. I happen to have great credit, but not everyone with a less than stellar score are going to steal your money or stupid office supplies.

Anonymous said...

I can't tell you how embarrassing and humiliating it is to have to fill in those salary blanks on those applications. And I know it might be a deal-killer.

I have gone from making a very comfortable salary to making barely above minimum wage at a series of part-time jobs, and I know that at least some potential employers will not get past that to see my ability and willingness to hustle (in a good, legal way) to support myself and keep my resume active, my great references, past award-winning work experience, volunteerism, etc. To them, they will see $10 an hour, and conclude I am not a worthy and serious candidate for consideration. That's just the reality, and I don't know what to do to overcome this hurdle.

And I don't think leaving the info off those applications is an option, either. You have to follow the rules if you want to be considered, even if they are questionable (which this certainly is) and it potentially hurts you, especially in this economy. It is totally a buyers' market. Best to take my chances and fess up than get disqualified from the outset.

Some people will, consciously or unconsciously, judge your worth on what you make (it's like ageism, lookism, etc. - the bias is sometimes there, but you can't prove it). It's just a sore fact of life.

I feel with the poster; it's a terrible practice to ask for salary history. But he/she needs to be honest and hope for the best, if they really want the job.

dearro said...

some companies ask for W2s?!?!?!?!?! just when i thought asking for the salary history was wrong!!!

is this practice even legal????

Anonymous said...

I'm so glad someone asked so I didn't have to. I'm in a similar situation in that I run a non-profit for next to nothing and have interviewed for lower-level positions at larger organizations that would start 33 percent hiring than my current salary. Not to mention benefits! So I'm always worried about the salary history part because, pshah, I'm clearly undervalued for the market!

Okay, rant over.

Pali said...

I HATE this practice. HATE.

Sometimes, like in this economy, you have to take a pay cut if it means getting employed. Most people switch jobs so they can increase pay; when potential employers see that you were willing to go down in salary, I think they see it as a green light to low-ball you and not offer any room for negotiation. "Oh, he/she took a pay cut before, I'm sure they'll be more than happy with ___.".

I feel like putting your salary history out there keeps you in the same salary bracket for years. As if wanting to significantly means you're "demanding" or "greedy". No, it just means that you don't want to live paycheck to paycheck for the rest of your life.

(Of course, this is assuming that you're actually good or great at your job and are consistently bringing the heat)

Richard said...

I think that one of the things that people forget is that if they do offer you the job, you are under no obligation to accept it: If they lowball you based on your previous salary, you can start to negotiate: You can tell them that the number that they're offering is far below the industry average, perhaps mentioning that one of the main reasons that you are currently seeking employment elsewhere is that due to the fact that your current salary is so far below the average for someone in your position and with the level of responsibility that you currently maintain. (This all, of course, assumes that you are currently in employment!)

If this is just a case of lazy HR, then they may go away and come back with another, better offer, or they might retract the offer and try to pass it onto someone more naive. Either way, if you were unwilling to work for the salary that they offered, you're not losing anything from the deal - you either get a more attractive offer, or lose out an offer that you didn't want anyway.


Anonymous said...

Well, I'm using this situation to my advantage.

See, at my company, I'm an exempt employee, but I get paid for each hour I work. When my company makes offers, they give you an annual figure based on a 2080 work-year. Take the offered salary, divide it by 2080, and for each hour you work beyond that, you get paid accordingly.

When I have to move on (hopefully not for a long long time) I will not report my hourly wage. I will report my total earnings for the year (which even on a 50 hour work-week is a 25% increase). I will have paystubs and W2's to back it up. And if a future employer is going to take issue with my choice to report annual earnings, then I know they're the cheapest you-know-what's and that I would be better off not working for them.

Bohdan said...

This is where the cover letter comes in handy.

If what you've made previously is very different from what you're looking for (low or high)explain why what they're offering makes sense for you.

The resume (including salary history) is just facts. Use a cover letter to tell the story.

Anonymous said...

I have over 20 years of HR experience and have hired hundreds of people.

I do not want "salary desired." Most, if not all, candidates have no idea what market conditions are and will go high so as not to shoot themselves in the foot.

So, sorry folks, but I ask for salary during the first conversation on the phone. If it is too high, I cordially thank them and move on.

If it is "ballpark," I tell the candidate so, and we don't revisit salary until they are a final candidate and we're discussing the "pre-offer" (sets the stage for the formal offer).

A reputable company knows the market (internally and externally) and will not use the information to "low-ball" you. This is counterproductive. If they hire you low, you'll just keep looking.

So, don't blow the chance at a job by insisting you won't give your salary history. If you feel it was under-market in the past, give the recruiter an explanation along with your salary.

I've hired from entry-level to VP, and EVERYONE gives me their salary history! It's just the way it is.

Anonymous said...

I was "early retired" (a soft layoff for 50 year olds) after 25 years with the same company. The early retirement was to get rid of who had received so many annual raises that we were overpaid for the current economy. In the interview I didn't want to tell my salary for fear the interviewer would dump me as old and expensive. He wouldn't offer because the job was new and he wanted to level-set first. Yeah, I started out underpaid and had to work up. When you have to relearn the ropes a new company, that's paying dues. But I'm with those who hate salary history.

Anonymous said...

Interviewer says: "What are your salary requirements?"

Interviewer means: "I'm thinking of a number between 1 and 10, guess wrong and you're out, what is it?"

... this is what it feels like to me, anyway.

Anonymous said...

To the Anonymous poster with 20 years of HR experience:

You said you ask for salary during the first phone conversation - unless the answer somehow affects what your offer will be, how is salary history IN ANY WAY RELEVANT? Also, why is the candidate going to 'blow the chance at a job' if they insist on not giving salary history?

It's okay, we already know why - it's the same answer for both questions: The first rule of negotiation is that whoever mentions numbers first loses, and if the candidate goes first, you can offer them five or ten percent above their current salary and they'll think it's a step up, even if that's below the bottom of your budgeted range. Great job - you got the candidate for a discount!

There seems to be an assumption that 'hiring hundreds of people' equates to 'hiring hundreds of great candidates at a fair salary', but this doesn't take into account that a top performer who was ‘low-balled’ like this (let’s not quibble over verbiage - if it walks like a duck, quacks like a duck, etc.) and accepted out of necessity is likely to leave sooner than expected and go to another company that will pay them based on what they’re worth instead of what they were being paid by someone else…

Over time, this means it actually costs the employer MORE than they saved by getting that ‘discount’, since most non-entry level positions require significant investments of time and resources in getting new hires up to speed, not to mention the non-quantifiable opportunity cost of losing top performers…

(yes, true story, but I learned a very valuable lesson)

raskal said...

dearro, asking for salary history and proof of said history (W2) is legal. It's also up to you if you want to comply with the request.

Anonymous said...

I used to think it is "none of anyone's business" when asked for salary history. But now I use it as a test on the potential employer -- how do they value me. If they come up with a "low-ball" offer, goodbye. It is not worth your time to serve them. All they want is a cheap labor and you certainly will feel miserable after working there.

I also give out salary requirement, better they ask me in the screening interviews. It is like selling a piece of your property. Will you approach the buyer and say "I don't have a price, and you make me an offer?" I don't think you will do that when you sell your house. You always give out the price and work with the ones who are interested and CAN afford it. Same with the salary requirement. It saves both you and the potential employer's time.

Do they NEED to know your salary history? Probably not. I don't think they are useful other than satisfying curiosity. But hey, what you earn before depends on economic condition and other things out of your control. Everyone can have the right to know a house's value two years ago. But they should understand that the value can appreciate after your remodeling and a heating economy.

In all, you don't need to be afraid to disclose either your salary history or requirement. You can always walk away.

Anonymous said...

nice blog! I've worried about this - I disclose my pay, only with hesitation. I work in a field where in my area their not alot of places who do what I do. And I am fortunate to have worked for companies who are willing to pay for a good employee and someone who keeps their customers satisfied. Unfortunately jobs have left our area and I may have to relocate. There are only 1 or 2 places that I am willing to relocate to. After reading a few comments, I may now include in my cover letter " I know I am paid better than most people in the area and i am willing to work for less because I love the area and I think you will be a good company to work for, and I know this job will be beneficial for both of us. I have alot to offer and I know you want the best person for the job.

HR people - what do you think?

Anonymous said...

This doesn't usually happens in Europe but seems to happen a lot in USA, i don't see any point on doing that, you will just piss off your employee from the beginning and that is not good for productivity and motivation believe me.
Asking for your salary history is just backwards mentality where kings and lords where ruling the world and nothing to do with an open market system.

Anonymous said...

Why do employers ask for these things. The simple reason is that employers want an easy screening device to help sort applicants, and those applicants with a salary requirement too low or too high are discarded. Other times, the employer is looking to save money by hiring a job-seeker at the low end of a salary range. In either case, it's not really fair to the job-seeker and its a good sign they are not a good employer or manager. Never give out salary information it can hurt your job career forever.