Sayonara, salary history?
While there’s no indication — yet — that a ban on asking job applicants what they currently make is headed to Wisconsin, the wage-leveling trend is growing in other states and major cities across the U.S.
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Why even ask?
It’s a valid question — why do employers even need to ask for a salary history? Why not just post a salary range for a position and be done with it?
It’s not quite so easy, notes Johnson.
“One reason employers want to know a candidate’s current salary is that they don’t want to offend a potential key hire by making a low offer,” Johnson says, “specifically in cases where an employer is trying to pull a quality candidate away from a competitor in a highly competitive market.”
Employers, like anyone in the position to negotiate, want to have all of the information possible to base offers on, notes Johnson. “Of course making good decisions in hiring from a budgetary standpoint is important — no one wants to leave money on the table when in these types of negotiations. However, I feel that there is a misunderstanding of the motives behind an employer’s desire to save money in this process. Oftentimes, especially in smaller or growing businesses, any money saved when hiring one candidate over another is invested right back into the organization in the form of salary increases for other employees, re-investment into benefits, or even adding additional staff.
Additionally, employers generally don’t include the salary range for a position when posting for a number of reasons, according to Johnson.
“When hiring for a certain title, there is often a large range of ‘going rates’ in the market. The amount that an employer can pay can be based on a myriad of factors — actual job duties, team size, the employer’s financial standing, nonprofit status, etc. It is common for employers who may not be able to pay as high a base salary to offer other perks such as better benefits, flexibility in scheduling, work-life balance, and culture. Posting only the lower base rate on a simple job listing may scare away potentially qualified candidates because it doesn’t paint a complete picture. Recruiters want the opportunity to have the conversation and sell the candidate on why their business is the candidate’s best choice.”
Requiring employer disclosure of a position’s wage range could be considered a missing piece of this puzzle, notes Johnson, but keep in mind, much in the same way that the salary history question can be asked using different language, posted salary ranges can also be manipulated to meet an employer’s needs.
“I don’t believe that this ban alone can work effectively to close the wage gap,” Johnson states. “Employers can still ask candidates about their ‘salary expectations,’ or the amount of money they would like to make in their new role. However, I do feel that many employers are taking strides internally to use market research, as well as budgetary factors, to create internal ranges for roles that more accurately put a price on the job, regardless of who fills it.
“It is doubtful that most employers will get to the point where these ranges can be eliminated completely, as there are so many other factors, such as experience, technical skills, and education that are taken into account when determining what salary will be offered.
Providing an answer
Johnson says for states and cities like Wisconsin or Madison, where no salary history ban is in place, there are some simple rules applicants can follow when responding to the salary history question.
Applicants should always take time to do their own research when applying for a position, says Johnson. If possible, the candidate should try to find out what rate is typical for the job, and understand the culture of the business they are looking to join.
“Candidates should also carefully consider the actual responsibilities of the position and adjust their expectations accordingly,” Johnson notes. “The salary for two manager roles, one in a small company with only two direct reports vs. one with 20 team members and a higher level of responsibility should have different wages.
“If a candidate is hesitant to reveal his or her current salary to a potential employer, they should indicate that they are ‘open to negotiation’ on their application or during the initial call with a recruiter, adds Johnson. “This then opens the door for the employee to take advantage of any research they’ve done, and engage in a discussion with the recruiter about market rates, other benefits offered, and what the candidate is looking for in their new role.”
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