In the March 7, 2017 Ask The Headhunter Newsletter, a reader questions advice about divulging salary information to recruiters.
I have your book, Keep Your Salary Under Wraps, about how to avoid telling an employer your salary history. I agree: Disclosing salary hurts your ability to negotiate the best job offer.
But now HR expert Liz Ryan asks, Should you tell a recruiter your salary? (Recruiters Don’t Need Your Salary History — But Here’s Why They Want It.)
She says absolutely not, and hundreds of people have posted their comments. Can we hear from another HR expert? I want to know what you say. Is telling a recruiter your salary different from telling an employer?
I’m not an HR expert and I’ve never worked in HR — perish the thought. I always worked on the outside as an independent headhunter. According to Liz Ryan’s LinkedIn profile, her experience is in HR, not in independent recruiting or headhunting. That might explain our difference of opinion.
I don’t think you should ever disclose your salary history to any employer. (See Should I disclose my salary history?) But that’s not what Ryan’s column is about. What she is recommending is a dangerous whitewash of a more complicated issue. She’s saying you should never disclose your salary to a recruiter or headhunter.
2 kinds of recruiters
Let’s be clear on one thing, because it’s important. When she says don’t tell a recruiter your salary, Ryan is referring to a third party recruiter, or a headhunter — not a recruiter working in the employer’s HR department. (When you disclose to an employer’s recruiter, you’re disclosing to the employer.)
The recruiter she’s talking about will earn a fee if you are hired, and also stands to gain tremendously if you’re happy with your job offer and new job. Although the terms are often used interchangeably, to avoid confusion here, when we’re talking about an independent, third-party recruiter, we’ll call that a headhunter. A happy, newly placed candidate refers more great candidates that are worth a lot of money to a good headhunter.
Ryan is wrong because a headhunter’s motivation is very different from an employer’s. A good headhunter can use your salary history to help you, not hurt you, in part because the headhunter wants valuable referrals from you after you accept a new job she’s helped you land.
Employers and headhunters have different motives
Never tell an employer your old salary because he’ll use it to cap any offer he makes to you. In other words, your old salary becomes what’s known in behavioral economics as an anchor. It pulls down the job offer. (If your old salary is higher than the employer hopes to pay, you might be rejected outright, but that’s another discussion. Please see How do I prove I deserve a higher job offer?)
A headhunter actually earns a higher fee when your job offer is higher, so she’s motivated to get you the best offer possible without jeopardizing an offer altogether.
There’s no good reason to give employers — or their recruiters — your salary history.
But the only good reason to tell a headhunter your old salary is if it’s going to help you get a higher job offer.
And that’s where Ryan blows it while she bangs the drum to say no. She’s confusing motives, and that’s naïve. There’s more to it.
When to tell a headhunter your salary
Here are my two rules about salary disclosure:
- If it’s an employer asking — the hiring manager, the HR manager, the HR recruiter, or the company’s online application form — do not disclose your salary, ever.
- If it’s a headhunter or third party recruiter, disclose your salary only if:
(a) The headhunter agrees not to disclose it to the employer without your express permission. No exceptions.
(b) The headhunter explains how she’s going to use the information for your benefit — and the reason had better be good.
If the headhunter can’t pass tests (a) and (b), don’t tell.
A good headhunter’s obligations
While a headhunter is paid by the employer and thus has a fiduciary duty to get the best deal for the client, the headhunter is also beholden to you if she wants introductions to more good candidates — and a sterling reputation in the professional community she recruits in.
So a good headhunter will not use your salary history to low-ball your job offer for the benefit of her client. If you think she’s going to do that, then walk away immediately — because that’s not a headhunter you want playing middle-(wo)man for you with any employer. (See How to Judge A Headhunter.)
When Ryan says not to disclose salary to a recruiter, what she should be saying is, Walk away from any headhunter you’re not sure you trust.
And that means most headhunters that solicit you — because they’re not headhunters. They’re unsavory spammers and telemarketers dialing for dollars. They’ll never do a good job for you. Work only with the best, or don’t work with a headhunter at all. Satisfy yourself that the headhunter is going to optimize your job offer — and, more important, get you in front of the right manager for the right job. Those are the headhunter’s obligations to you.
Now let’s discuss what Ryan avoids.
Why disclose your salary to a headhunter?
What legitimate reasons could a good headhunter possibly have for wanting to know your salary? If it’s me, I want to understand how your career growth and salary growth reflect one another so I can make a good placement — for you and for the client paying my fee.
- Do I think you’re over-paid? Under-paid?
- Do I think you’re squandering your abilities for too little money?
- Is your salary expectation unreasonably anchored by your current salary?
- How does that affect how you behave in interviews?
I’d rather discuss these questions with you before you talk with my client, because it could affect how I advise you to interview and negotiate.
Maybe you’re on the wrong career trajectory. You might be earning at the top of the range for, say, a digital design engineer. If you want to be an R&D engineer, you may have to take a step back in salary to shift to the new career direction. I want to prepare you for that. I don’t want you to get sticker shock after you’ve invested your time in interviews with my client.
If you don’t trust a headhunter like you’d trust a doctor when sharing your personal information, then don’t work with that headhunter. If a headhunter isn’t discussing these questions with you, run.
The 92% salary increase
I’ll give you an example of when it pays to tell a headhunter your salary. I recruited a candidate who was earning $40,000. I helped him get a 92% salary increase.
He was hoping to get a 10% salary bump. After a lot of assessment including talking with his references and having him talk with an industry expert whose opinion I respected, I knew he’d be great for a very different kind of job with my client.
If I hadn’t asked for his salary history, he’d have blown the interview, because the job paid over $70,000. His jaw would have dropped if this came up in the meeting with my client, and he’d have betrayed his old salary if only in his body language. My client never would have offered what he was worth. I’d have had no idea, if I didn’t know the candidate’s salary.
We had a long talk about how to behave while discussing a job that would almost double his salary. Based on the candidate’s aptitude, I negotiated a $77,000 job offer. My client never batted an eye, and never learned what its new hire had been earning. The candidate and his wife were able to buy their first house. I earned a nice fee — and several great referrals. The new hire performed so well that I got more search assignments.
I asked for, and got, the candidate’s salary history — but I never disclosed it. I used it to coach him properly so he could get a better deal.
If you’re not satisfied a headhunter is going to work that way with you, hang up the phone or delete her e-mail.
Liz Ryan is wrong
A headhunter is not an employer. Different rules apply when a job seeker deals with a headhunter. It’s up to you to understand the differences. That’s why I wrote a 130-page book about How to Work with Headhunters, and how to make headhunters work for you. What I just explained is in the book.
Liz Ryan sometimes offers good advice. This time Liz is wrong. She sounds right because she’s being contrarian, but she’s whitewashing a question that requires more insight and discussion.
Her advice to not disclose your salary is reasonable only if you’re dealing with a questionable or unsavory headhunter or recruiter — but in that case, you shouldn’t be working with that recruiter anyway! Just as there are lots of lousy HR people who will waste your time, there are loads of unsavory headhunters. (See Why do recruiters suck so bad?)
Know when to say yes
If you’ve properly vetted the headhunter, and the headhunter gives you satisfactory answers to the two tests I posed above, you might gain a lot by letting the headhunter know your salary history so she can assess and coach you properly. Make sure the headhunter will:
- Keep your salary information confidential — that is, won’t disclose it to the employer — and,
- Use the information to your advantage.
A good headhunter stands to make a lot of money by helping you get the right job for the best possible salary. And the headhunter’s client never needs to know your old salary. But it’s up to you to draw a line in the sand. Don’t be afraid to say no — and know when to say yes.
9 tips for dealing with recruiters and headhunters
If you don’t know how to separate good headhunters from unsavory ones, check the nine tips in The truth about headhunters.
Do you tell recruiters your salary? Why? If you’re not sure why, then don’t do it. How do you handle headhunters and employers’ own recruiters? How do you keep control of being recruited?