Asking about a candidate’s salary history is a standard hiring practice. By inquiring what each candidate made at each previous job, organizations can offer a salary that is in conjunction with what the applicant has made in the past.
Some hiring personnel say they like asking for salary history because it helps avoid overpaying applicants. However, some states are now passing laws prohibiting businesses from requesting a salary history. These laws are typically passed based on the notion that providing a salary history contributes to the pay disparity between men and women.
The Case for Asking
Hiring personnel who support the practice of asking candidates for their salary history say it saves time by making sure the applicant and company are at least in the same ballpark with respect to salary.
By starting the conversation around salary with accurate information, advocates say, the two parties can quickly move toward an equitable salary. Both parties can avoid surprises and a long, protracted conversation around pay that can cause friction in the relationship before the person starts their first day.
In fact, asking for salary history may not contribute to a gender-based pay gap, according to a recent study by Payscale.com. The study found women applicants who revealed their salary history to a potential employer actually had received higher job offers than women who refused to disclose a salary history.
Although, the study also found that men who refused to disclose a salary history actually received a higher offer than men who did reveal it, while women who refused to give a salary history received offers that were lower than women who were forthcoming with that information.
Simply put, women appeared to be penalized for being reticent about salary, while men appeared to be rewarded for that behavior.
The Case Against
Although this legal development is somewhat tied to a cultural debate, many experts are now saying that asking an applicant for their salary history is a bad hiring practice.
Because salary can vary widely from company to company, industry to industry, and region to region, a salary history provides highly subjective information. Furthermore, critics of the practice say that if someone’s past salary had been affected by bias or prejudice, basing your offer on that history perpetuates that bias or prejudice.
Most experts agree that staffing personnel should be able to determine what to pay someone just by asking interview questions that determine the candidate’s skill level and matching that to the company’s salary metrics.
By not bringing up a person’s salary history, a company can avoid many pitfalls surrounding pay disparity and privacy, which fosters the creation of a solid relationship that is essential to attracting and retaining top talent.
At Cornerstone, we base our talent acquisition practices in accordance with all local, state and federal laws, as well as the criteria set out by our client companies. Please contact us today to learn more about how we can support your organization through a custom staffing solution.