In the March 20, 2012 Ask The Headhunter Newsletter, a reader worries that disclosing salary history to an employer is not a good idea…
What’s the best way to deal with an interviewer who wants to know my salary history and salary requirements? While I know employers always ask this, I feel it takes away from my edge when I divulge that information.
You’re absolutely right — to a point. When you show your salary cards at the wrong time, your negotiating edge disappears. When employers ask for salary requirements, they usually follow up quickly with a question about your salary history. Then they use your last salary to limit any offer they make. And that’s why you need to take control of the discussion.
You should avoid disclosing your salary history, while expressing your desired salary as a range you can justify and defend. The best way to negotiate a good salary deal is to demonstrate that you’re worth it.
Salary history is confidential.
In my opinion, discussing salary history is a no-no. It’s no one’s business. Some employers will object, but keeping your past salary confidential is pure common sense because it directly affects your ability to negotiate. Although an employer may suggest that your old salary is a good indicator of your value, the truth is that it’s up to her to make an independent assessment of your value to her business.
Your salary is nobody’s business. Disclosing it can cost you a big raise.
Learn to say NO firmly and with authority when employers demand your salary history — to make them say YES to the best possible offer.
It’s all in my new PDF book:
Keep Your Salary Under Wraps
BONUS: I’m throwing in a special mp3 download, from my recent workshop at Cornell’s Johnson School of Management.
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Don’t cap the job offer.
Employers claim otherwise, but once they know your salary history, they’re likely to use it to limit any job offer they make to you. They offer myriad excuses for why they need to know your salary, but I’ve never heard a legitimate one. (My favorite: “It’s the policy!” Gimme a break.) If they want to make sure you’re “in the right ballpark,” ask them what the salary range on the job is. If they continue to press you, ask yourself whether they’d disclose the boss’s salary — or anyone else’s salary in the department. Makes no sense, does it? Don’t help an employer cap the job offer by retreating to your old salary before you even begin to negotiate.
Turn any salary question around and ask what exactly the employer wants you to accomplish for her business. Then be ready to show how you will deliver. If this sounds like a lot to prepare in advance, it is. If you can’t do it, then you have no business in the interview.
Know what you want.
It’s legitimate for an employer to ask what you want, as long as it’s couched in a larger discussion about how you will contribute to the bottom line. As we said above, the more value you can contribute to the work, the more you’re worth. There’s no way to provide a desired range until you know what the job entails and what the expectations are — and that requires thoughtful discussion about the manager’s business objectives and how you will fit into them.
Salary negotiations can be challenging. But it’s easier to negotiate the right deal when you’ve demonstrated good faith — and firmness — by keeping your salary history private, by demonstrating your worth, and by sharing your goals with the employer.
How to handle demands for your salary history is such a hot topic on Ask The Headhunter that I wrote a 27-page Answer Kit that teaches how to say NO politely and with authority, so you can prove you’re worth more: Keep Your Salary Under Wraps!
How do you protect your ability to negotiate the best salary? Should employers demand your salary history? Should you disclose it?
Don’t miss these other Ask The Headhunter Answer Kits:
How to Work With Headhunters
How Can I Change Careers
I agree with Nick that it’s really nobody’s business, and it takes away your ability to negotiate, if you reveal your salary/salary history. But I’ve seen job descriptions that say outright “Resumes without salary histories will not be considered”. And often times on a job interview, one of the very first things the interviewer will ask is “What’s your salary now?” or “What salary are you looking for?”. And this is asked right out of the box, without even trying to find out whether you’re a fit for the company, how you can communicate, etc. So do you just say in these situations “No thanks” and move on?
When I know the range/limitations of compensation for a particular position would you expect me to present someone whose comp.requirements are a mystery?
Would you play negotiating games with your client?
This a more complex situation than just “keep your hole card a mystery.”
Seems to me that some situations demand an open & honest discussion of compensation, some have more room for negotiation and some are wide open to negotiation.
If the conversation starts out with salary history and requirements, I would assume the job is a grind and not worth my time.
Squeeze, squeeze and more squeeze. It also suggests the business as a whole is not very profitable and way too cost oriented.
This tends to be one of the first questions asked–what salary are you looking for or what are you currently making. I try to deflect the question by talking about the job, how the role of this job contributes to the organization, etc. If they continue to press the question that tells me the most important thing to this employer is how cheaply they can hire someone. Why else would they continue to ask that queston if it wasn’t the most important criteria for hiring someone?
“…would you expect me to present someone whose comp.requirements are a mystery?
Would you play negotiating games with your client?”
Thanks for not actually reading the article, where he very specifically says “You should avoid disclosing your salary history, while expressing your desired salary as a range you can justify and defend.”
The candidate’s salary history is not a “hole card”, it’s the one piece of information that, if disclosed, completely destroys all ability for the candidate to negotiate a fair wage for his/her labors, whether higher or lower.
Another reason why you don’t want to disclose – we’re in the middle of a recession. Many people had to take lesser jobs and/or when a long time without a pay raise (and if/when they got one it may have been peanuts).
That said, I know many people that would be willing to take a slight pay cut in order to get into a promising position.
Simply using salary history/requirements up front as a qualifier is generally a bad idea. IMHO you generally need to talk to people and then make a decision.
I have always found aggressive interrogations about salary history obnoxious. I agree that it is best not to disclose salary and it is none of anyone else’s business. Unfortunately, many companies don’t take no for an answer. It costs them good candidates.
@Bob: When the ad or posting says resumes without salary history will not be considered, don’t apply through that channel. That requirement is actually an aid to serious job hunters – it forces you to go make a personal contact. Which sets you apart from your competition instantly. And isn’t that the point? To stand apart?
That makes sense. I tried re framing the conversation on salary at an interview to what I can do for them, and it went downhill from there. When it became clear to me that I would not be getting that job, I probed further, It turned out to be a much lessor position that was hinted in the posting and I wondered if it existed at all.
If professional athletes were evaluated upon previous salary history coming out of high school or college, none of them would be multi-millionaires today. They are paid on market value. It should be no different for the rest of us.
I have never understood why American companies insist on asking a very personal question such as salary history. I never knew what my parents earned nor any of my relatives.
As Nick and others have mentioned, companies should not peg your worth to them based upon someone else’s valuation model. It is lazy and illogical yet has persisted for years.
I think the salary range should be posted in the job description and the future-employee’s salary range (not person’s current salary, but rather desired salary) should be placed up front. If there isn’t a match, the future employee won’t apply. The boss gets to ‘weed out’ and everyone is happy.
I also think everyone’s salary grade should be public within the company.
I too have learned what Edward learned. Keep asking questions about what you can do for them. If the interviewer keeps asking the salary question that indicates to me there may be problems with the job.
Let’s not forget that salary histories are regional in nature. When I moved from Metro Chicago to S.C. Pennsylvania, the rate of pay decreased. The salary I commanded in Chicago would not be paid in the area I live in now. A salary history would be of no benefit to my current employer.
Those that harp on salary costs aren’t looking at you as a valued member of the firm. Instead, you’re a drag on the bottom line. Avoid those companies. You will probably note that they advertise frequently, because they’re such a crappy employer.
@Steve Amoia: A company that pegs a candidate’s worth on another employer’s [its competitor’s?] judgment reveals a complete lack of competitive edge. The fundamental basis of American business is to be able to judge value better than the next guy. Almost by definition, the best companies are the ones that recognize and scarf up talent that the market has unwisely discounted.
@Michelle: That’s a key point. Does an employer view salary as an expense, or as an investment? If the former, then the company should not hire at all.
There lies the rub I have in diviluging salary history/requirements. There’s a million variables that come into play. Most people (employees and employers) don’t completely understand the variables and context in play.
As I stated previously, many people I know would take a pay/benefits cut if they got into a better situation. But many employers do not realize this and simply use salary history/requirements solely as a quilifer when they should be looking a little bit deeper.
Your comments are well-taken.
*THE* classic book on salary negotiations for the job seeker is, Negotiating Your Salary: How to Make $1000 a Minute by Chapman.
Everyone (and I mean everyone) who is seeking employment should read this book.
Keep up the good work.
@Chris Hogg: I’ve never been a fan of Chapman’s methods. He realies heavily on three techniques, which are based on fallacies:
1. Delay discussion of the salary you want as long as possible. This is based on the old negotiating saw, “Whoever mentions a number first loses.” Chapman devotes a lot of ink and many scenarios to this. But extensive research in psychology and behavior economics says this is a fallacy. By putting a number out early, either party can create an “anchor effect,” towards which negotiations will move. It’s why employers want your old salary to be spoken – it’s the best way to keep an offer low. I think Chapman is wrong. You’re better off expressing a desired range at the start — and make it high, to pull any offer upwards. But it must be a range you can justify and defend. This is where I think Chapman’s methods fail entirely, because they’re largely based on gaming the interview. (See Wm. Poundstone’s “Priceless”: http://amzn.to/GDsZR2)
2. Chapman couches salary negotiations in terms of game theory, complete with outcomes tables. (Picture a 2X2 matrix: What you did, what the other guy did, and the outcomes.) By using this as a teaching tool, Chapman creates a false forced choice for the candidate. He wants to you accept one approach. The limited options and outcomes he presents are dangerous, because it’s not a game with limited options or outcomes. The smart candidate judges the value of what he or she can do on the job, and through intelligent dialogue delivers proof of value to the employer – he doesn’t just try to psych out the numbers. Where Chapman outlines a 2-dimensional “game,” the effective salary negotiation is actually two people working together to flesh out the work and the value. It’s not a game.
3. Chapman relies on salary surveys. He quickly directs his readers to salary.com and other surveys. The problem with surveys is that they are descriptive, not prescriptive. A weak employer and a weak candidate will both turn to these surveys to justify the salary figure they are pitching. But no survey captures the candidate sitting in that chair, or the job in question. The point Chapman misses entirely: The candidate must help the employer perform a thorough assessment of the candidate. Turning to statistics is a cop-out and a losing proposition for the candidate — the employer can always cite yet one more salary survey. A candidate can terminate the employer’s tactic by pointing out that the specific job and the candidate’s specific constellation of skills are not in the survey — thus it does not prescribe the salary.
It’s simply not true that whoever mentions a number first, loses. Extensive research shows that pegging a high number early raises the final number. The choices when negotiating are not represented by a static matrix of options and outcomes. And salary surveys are crap. While employers claim they want to hire out-of-the-box talent, they offer median salaries and attract mediocre applicants. It’s a conundrum, and I think it’s at the heart of business failure today.
I think the fundamental difference between how I see this and how Chapman sees it is clear: My emphasis is on moving the negotiation to an interactive discussion about the work that needs to be done and to proof that I will do it more profitably than you expected — which gives me firm footing to ask for more money because I’m going to generate more profit for you.
I think when you make salary a game, you raise your odds of losing dramatically.
Thank you for taking the time to reply. I appreciate what you said and how you said it. While I remain a “fan” of Chapman, you make very strong points that need to be considered (which I will definitely do). Thanks again for a detailed answer.
Many thanks to all who have purchased “Keep Your Salary Under Wraps” — Hope you enjoy using it as much as I did writing it!
Please tell friends about it — use the link buttons at the end of this article (above). If I could ever use “going viral” now is it! :-)
Nick, thanks for a most timely topic. My alma mater’s career office held a meeting for local graduates who are looking for work, looking to kick-start their careers, looking to make changes, etc. One of the topics was salary and how to handle the “what is (or was) your current (or last) salary?” when you’re on a job interview. The counselor said you should disclose it and be honest about it because “they will find out anyways, and if you lie, then it looks bad” and that might disqualify you.
I’m with you and the other posters–my previous or current salary is none of their business. I know that they ask as a way to assess your value, but why would an employer use someone else’s valuation (salary) to dictate their value of the job?
Whenever we created new positions, those of us who were writing them had some idea, within a range, of what the job would pay. We looked at what we thought was needed to do the job–level of education, amount and depth of previous experience, for the baseline. Then we decided upon an upper range because we knew that we might get candidates who exceeded the basic requirements and that would justify paying them more (especially since it would mean less training and less time for the new hire to get up to speed).
I also agree with Michelle–there are other variables–location is a good one, that means a job that pays $35,000 per year in Mississippi would pay $75,000 in the Boston area because of the difference in the cost of living. You can’t live on 35K in the Boston area. Well, you can, but only if your parents or spouse or someone else is paying your bills and expenses.
Nick, I haven’t been able to find your book–and I’m interested in reading it. Salary is a touchy subject, yet an important one. I think it does need to be discussed, but in a calm, reasoned, adult fashion. If an employer hasn’t put any thought into what they want the job to pay and are relying on my current or former employer (when I haven’t had a raise in 7 years due to budget cuts and crises), then that’s a big red flag for me. It is also a red flag if an employer doesn’t want to give me a range. I need to know whether I can AFFORD to take the job, if it is offered to me. Paying rent, being able to pay my bills and to eat and save are germane to me as an adult. If the employer doesn’t want to pay a living salary, then they need to be honest so neither one of us wastes any more time.
It shouldn’t be a mystery, and I really hate the whole buying a car aspect of it–where you have lie and play games and guess. I know the employer wants to get you for as little as possible, and you want to get the highest salary possible, but it seems there should be a way to have a civil discussion without the games or blowing your chances for a job.
Excellent discussion. As a recruiter, I try to be both mindful of my client’s desire to invest in new talent while managing their HR budget, and a potential candidate’s desire to be treated with respect and paid based on what they have to offer.
It is a bit of a dance, though candidates with the right mixture of skill, experience and attitude often are able to take the lead. Sadly, much does depend on the experience of the HR manager.
I often share the salary range for a position when speaking with candidates, particularly ones I don’t know well, so they can self-select in/out. I tell them that it is merely a guide, which is true. An attractive offer is always made to candidates a company wants to hire. My role is to help both parties find those numbers that leave them feeling as though they each got what they wanted.
Thanks for the insightful post. I found it really useful, keep up the good posts!
When asked, I say: “The number to beat is $xxx”.
I pretty much know what the range is for my kind of work in my area. And so does the employer. What I DO want is something more than my current/previous job.
Excellent discussion. As a recruiter, I try to be both mindful of my client’s desire to invest in new talent while managing their HR budget, and a potential candidate’s desire to be treated with respect and paid based on what they have to offer
Nick, this all makes perfect sense and alot of info has been provided, but given the fact that most employers are now using “The Work Number,” I fear that it will stick us in the same old pay what you’ve been paid trap. Here’s a link to an article that explains it, but you can Google it and find alot of explanation, including the website on Equifax. http://www.nbcnews.com/business/consumer/exclusive-your-employer-may-share-your-salary-equifax-might-sell-f1B8173066
The biggest mistake I ever made on this last job was to take a 15% pay cut to get in the door. The company moved their HQ within 6 mths, and I lost all visibility and have NEVER made it back up. It’s been excruciating, and the horrible job market made it impossible for me to go elsewhere.
I’m now getting ramped up to start looking again, but the work number has me concerned. Aside from all the loss of privacy, my salary history has been dreadful these past 14 yrs. I will try to employ the tactics you’ve provided and will buy your ebook, but in the past (except for this job,) I was always able to get about a 20% increase because I did have to lie about my previous salary at each job. Extensive job movement quickly taught me that most employers quickly assumed that you are only worth what your current employer is paying you. However, they added on much more responsibility and work and expected that it made employees happy. It did not.
Also, I’ve found that that “regional” adjustment is just so much BS to get folks to work cheaper. More excuses to pay you less. I’m doing the same type and amount of work as someone living somewhere else and they’re paying me less because my COL is less. What a ridiculous concept, and do they even have any conception on how that affects morale?
I really wish it was marketplace driven, in the truer sense. I do know that I will be assessing the companies I look at with a much finer microscope. No one will be getting anything except for what I think the job is worth and what I will work for them to do it. It really must be a negotiation, otherwise, you’re just cattle.
This subject has always been a sore point for me and the accessibility of info and loss of privacy is definitely something everyone should be aware of.
I’ve had a headhunter tell me that the client company would be asking me for W2s or salary history to “legitimize” the salary being requested. Obviously, nothing here about what the value of the work performed would be within the schema of the marketplace. (What if I did a stretch of work pro bono to help colleagues? Am I worth zero? Consulting fees are confidential and represent my marketing and sales prowess as much as they do the caliber of my work.)
Is this game over before it even starts? Obviously, the recruiter will be judged on his ability to produce the information demanded and to assess whether the candidate is “difficult”.
It’s mighty peculiar, but the very company that tells me that my salary is confidential and discussing it is a fireable offense, reports every single paycheck, bonus, raise, etc. to the Work Number site.
I will still put down that I have signed a confidentiality agreement and cannot disclose it, but after I ran that report this morning, it certainly seems like an exercise in futility.
Providing the W2’s is a long time strategy now and used to only be requested once you had secured the position. Are they now requesting them up front? I can still see that I wouldn’t be able to provide them with that info w/o violating my current company policy.
I’m not sure how to circumvent this ugly turn of events. Current value being based on past worth is a real catch 22.
@Lauren: About all you can do is politely but firmly say NO. Then turn the discussion to the value you can bring to the business. The alternative, which some don’t like but that I think is legit, is to discuss your desired range and ask them to state their salary range.
@Kent V: I know it seems like a totally “fixed” game. Recruiters and employers demand salary facts, but will not disclose their own. I’d ask the recruiter for evidence of the salary range on the job. “I’m sure you understand I don’t want to take a chance that your client isn’t going to pay what I’m worth.” If you’re going to disclose your numbers anyway (I don’t advise it, but if you do), then you’re perfectly positioned to insist on getting the employer’s salary history, too — on the job. I know it’s cat and mouse, but when recruiters play that way, sometimes you must take a risk and throw a long pass. If you miss, you move on, knowing the recruiter is a lightweight.
NEVER divulge your salary requirements or history.
It will be used AGAINST YOU. You will be rejected based on salary.
Ask them what is the salary range of the position. If they hem and haw about it or have objections, then say “then why do you want me to tell you my salary requirements if you won’t even tell me how much are they expecting to pay?” Can’t have it both ways.