How to make more money: Withhold your salary history

On March 4, 2009

One of the most popular articles on asktheheadhunter.com is Keep Your Salary Under Wraps. The advice is simple: Don’t disclose your current salary or your salary history when a prospective employer asks you for it.

The reason is also simple: When you disclose your salary information, your negotiating leverage is gone. Your salary history is not any employer’s business. Always decline to disclose, politely but firmly. No matter what they say, no matter what they threaten. In fact, be ready to walk away if they don’t back off. It’s not worth talking to a company that insists on having your salary info.

(Go ahead and post arguments about why employers must have an applicant’s salary history and why applicants must disclose the information if they want to be considered for a job. If you work in HR and I’ve made you nervous, go ahead and level every threat you can think of to protect your hiring hegemony. I’ve heard all the dusty rationalizations. None of them hold water. They are all rubbish. I’ll answer every single one.)

I regularly receive e-mails from readers who take this bold position when applying for a job. They are almost always astonished to realize that employers back off from the demand if the applicant stands firm.

Having controlled their confidential salary information once, people never go back to forking it over. They lose their fear. They are emboldened. They send me stories about how they walk out of interviews when the employer threatens to terminate their candidacy unless they divulge the magic number. People learn to say no, and they realize that conceding is wrong. They realize that employers who insist are a bad risk. Why work for someone who tries to force you to share private information that has no bearing on your interview, on your value, on whether you get an offer, or on what the new salary offer is?

A fellow named Ryan runs a blog called The Idealistic Investor. It’s a new blog, not much stuff on it, but all the articles are about some aspect of personal investing and work — and full of common sense. What I like is that Ryan is a techie. He works in IT (information technology) and he brings a techie’s practical, clear-headed perspective to pesky issues like stress at work, layoffs and what to do with your money.

Ryan is also one of the people who politely but firmly declined to divulge his salary history to an insistent reruiter at a technology company. The phone call ended and so did Ryan’s expectation for a job interview or a job. Learning what happened next is worth your time, and probably a nice bit of change in your next job offer: Do You Disclose Your Salary History? Check it out, then tell me what you think.

[UPDATED 3/17/09] Some of the dialogue here stems from today’s edition of the Ask The Headhunter Newsletter: HR’s salary moxie.

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Forget your job, distribute yourself

On February 11, 2009

If your job is in jeopardy, why be an employee if you can be a distributed innovator? If you’re a manager, why interview applicants if you can meet people who are innovating on the edge of your industry?

I’ve already written about how some of the best career advice doesn’t come from career experts. It’s between the lines in business articles. Here’s another example of how to put business ideas to work to save your career.

In the February 9 edition of ComputerWorld, tech guru (and former director of the Xerox Palo Alto Research Center) John Seely Brown talks about the silver lining in our broken economy. He says now is the time to live on the edge (like we have much choice). Here are a few ideas I’ll bend into shape for you: Read more →

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Salary history: Just say NO

On November 13, 2008

Want to earn what you’re worth? Yes? Learn to say NO when employers demand your salary history.

Say what? You can’t say NO? They’ll rip up your application? The HR manager will laugh in your face and tell the world you are uncooperative and unworthy? Say what? Withholding salary information just isn’t done? Aw, don’t be a wuss.

I covered the importance of Keeping Your Salary Under Wraps back in May (Just say NO), but a reader’s pointed policy should be yours, too. She gets 10 Headhunter Points for integrity and street smarts. Can you afford to give it up when employers demand to see your pay stub?

Nick,

Thank you, thank you, thank you!

I drove my stake in the ground earlier this year while unemployed. Divulging my salary was blowing up on me because I had either earned too much or not enough.

It isn’t always easy. An officious, as well as uppity, Sr. Human Resources Manager scoffed at me by saying it wasn’t true that my previous company wanted that information held private because other people from my previous company had shared their salary history with her. I delicately replied the behavior of other people did not mean the policy wasn’t in place and thanked her for acknowledging I was unique as a person who demonstrated integrity.

As a sales person, I have had success answering the salary history question with, “There are so many variables with sales positions such as inside vs. outside sales, travel requirements, ratio of base to commission, etc., that I have found it easier to discuss the parameters of and the value you have placed on the position you are offering.

As I was working with a recruiter who was insisting I share salary history and be prepared to show W-2s at the interview, I sent an email stating:

“Regarding sharing privileged salary information, I honor the commitments I make to my employers and do not share that information with anyone.  Even my parents and siblings have never known what I have earned. One of my litmus tests for how well a company’s management team makes decisions is how well they assess skill sets/experience in regard to the particular position and base compensation on those salient factors. If they believe W-2 information is a valid determination, that raises red flags for me. I want to work with a company that demonstrates sound, not specious, business decisions.”

Within five minutes, the recruiter’s manager called me to explain they were having trouble with the demands of that particular employer and he had a better position for me, one more closely in line with my passions and skill sets, with better compensation, and for which I wouldn’t have to divulge salary history.

There is a tremendous value to taking a stand. I will never divulge salary history again. I am spreading the word and encouraging my colleagues and business acquaintances to stop sharing as well.

Thanks again for supporting us as we have the courage to take the high road. Companies and employees alike will be better served when salary history is no longer a part of the discussion.

Jesica

Kudos to Jesica for taking on the salary question with aplomb. When the going gets weird in a job interview and HR gets out of line, raise your standards. If the employer doesn’t know what that means, toss them a quarter and tell them to call you when they figure it out.

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Oops! There goes another one!

On October 20, 2008

The foreman at a lumber mill is giving a tour to the Human Resources manager. He hears a voice over the din of all the machinery. “Ouch!” Concerned that the new, accelerated production schedule is resulting in accidents, they follow the sound to a worker running a huge saw that slices through trees like bars of butter. “What’s the matter? Why’d you cry ouch?” asks the foreman. “Well,” says the saw operator. “I was trying to put more logs through the saw faster, like we were told, and I just stuck my arm out like this, and… Whoa! I’ll be darned! There goes the other one!” The foreman turns to the HR manager: “Well, that does it. You were right. There goes another one. We need to post these jobs on CareerBuilder long before we need to fill them.”

Once again, a lousy economy is thrusting people into a job market where the talent is running scared. People will snatch up jobs, any jobs, to pay the mortgage.

I try to teach people the importance of pursuing the right job, not just a paycheck. But I always qualify that, because I certainly understand that putting food on the table and paying the rent may be a good reason — maybe the only reason — to take a job, any job. But even in dire circumstances, it’s important to step back and consider the consequences of such short-term thinking and decision making. The trouble is, business is leading the way.

Two articles in a recent edition of Computerworld highlight the problem. In Software Holding Back Spread of Multicore Chips, we learn that new computer microprocessors with four “cores” (translation: four brains) are now shipping to companies that want the extra processing power. But customers and analysts alike complain that there’s no software that takes advantage of this massive leap in computer hardware. Oops. Read more →

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How much can you afford?

On October 8, 2008

Many years ago I worked for a small, scrappy, successful company that cut the floor out from under its competition every day. No one could touch us — not on value, and not on price. But we always turned a very nice profit. Our competitors could never figure out how we did it. It’s a lesson in shrewd customer relations and sales.

When a sales rep would moan to the company president (and founder) that a prospect could not afford our price, his answer was always the same. “Sure they can afford it. Just lower the price.”

This drove new sales reps to distraction because they were not permitted to sell at a loss. “But we’ll lose money!”

“No we won’t. Take something out of the product to reflect the drop in price. Then show the customer which part of our great products and services she’d have to forego to save a few measley dollars.”

Ask the prospect how much they can afford. How much do they want to spend? Lower the price if you have to. Remove features from the product or service to make the product reflect the price. (Or, offer a different product that costs less.) But never walk away from the deal. Always let the customer spend what the customer says she wants to spend. Your job is to sell the benefits of the product, and to help the prospect realize she will get what she pays for. (And, of course, be ready to deliver everything she needs if she is willing to pay for it.)

At that little company (which became a very big company through acquisitions), the most valued sales skill was knowing how to give customers what they asked for, and then to show them the benefits of buying greater value. In other words, how to get lots more value in exchange for spending just a bit more money.

My good buddy Bob Lewis discusses this in another context in his Keep the Joint Running newsletter. Never say no, even when you can’t say yes, suggests Bob. “Your alternative to yes and no is, as always, “here’s what it will take.” You can get from here to there, but not for free. Some alternatives will require investment; all will have risks attached.”

When a manager suggests a job offer at salary $X, you can tell him you’d accept it, “if what you’ve described as the job is all you want me to do for you.” When the manager gives you a quizzical look, offer more. “Well, I could do the job you want. But I could do a lot more. For example, I can show you how I believe I could increase your departmental profitability by 5%-10%. I’d expect a higher salary for that, but that’s up to you.” (That’s at the heart of The most important question in an interview.)

What someone can afford is always a function of how much they get for their dollar.

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Work like a 15-year-old

On July 28, 2008

There’s a wildly-successful TV show that will pit your intelligence against that of 5th graders. I’ll tell you, when it first came out I said it would flop — but the number of adults who fail to keep up with 5th graders is a little frightening. So is the nervous laughter from the audience…

Which leads me to ask, is your work ethic worthy of a 15-year-old? The Evil HR Lady offers young burger-flippers simple advice on How to Avoid Being Fired.

I smirked at some of her suggestions, but then I realized something. If I didn’t learn everything I needed to know in kindergarten, the rest of my work-world savvy was cultivated by a job I had in a diner when I was 15. Simple, boiled-down advice like this has little flavor but, like comfort food, it will take you a long way.

The Evil HR Lady’s suggestions for success at work aren’t just for kids, so pay attention. My favorite is this gem: “Work while you are there.”

Now, there’s something to think about while calculating your value to an employer. Woody Allen was wrong: 90% of success is not “just showing up.” It’s about doing the work. Getting the job done. Producing what you’re supposed to produce. Few 15-year-olds get that, but their bosses grind it into them. Don’t let us forget it, especially in a job interview, when the employer asks, “Why do you want this job?” The answer is not, “So I can show up… and get paid.” The answer is… well, you figure it out.

Remember that Woody Allen is a comedian. While you laugh at humanity’s foibles, he gets paid. When your name has the value that his does, you might get paid just for showing up and standing around. Do what you say you’re going to do. Do what the employer expects. Work while you are there.

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The salary dog

On June 23, 2008

James Maguire at Datamation (the oldest IT publication this side of a PDP-11 manual) pointed me to glassdoor.com and asked what I think of this new web site that gathers and reports salary information in the information technology industry. His article is a fun read: IT Salaries: Glassdoor Reveals Tech Pay Figures.

This web site — funded by Benchmark Capital and run by guys from places like Expedia who oughta know better — collects tech-industry salary information from anyone who submits it. Maguire didn’t tell me this, but I heard a rumor that every morning a dog appears at glassdoor.com with a note in its mouth, and is promptly fed, stroked, and sent back out to fetch more data…

Come on, guys. This is ridiculous. But I’ll bite. Having information about who’s earning what at which companies could be useful, as long as you don’t let it effectively cap your own worth. Of course, glassdoor.com needs to make it over one big hurdle: Is the salary information it publishes legit?

Maguire asks this one question every which way, and my hat is off to the guy for keeping a straight face. And here’s a sample of the answers he got:

“We’ve got a bunch of technical and procedural mechanisms to vet the data.” When pressed, one of the founders demurs, “We’re not really talking about the specifics that we’re using.” (Cough-cough.)

Even Ambrose Bierce, owner of a recipe once more closely guarded than the formula for Coca Cola, revealed more than that, in Oil of Dog.

Let’s continue: Read more →

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Coveted, lucrative, and rare

On June 9, 2008

The question on every job hunter’s lips is, “How do I make myself stand apart?” It’s a good question because it seems every joker and his sister apply for every job posted on the Net. The competition isn’t just stiff — it’s voluminous. How does a good worker rise above the sea of mediocrity?

You won’t like my answer, because it’s not an instant solution. It takes time to become one of the precious few who stand out.

How would you like to be known as coveted, lucrative, and rare? That’s the title of an Electronic Engineering Times article by R. Colin Johnson, and it reveals three important guideposts for how to make employers beg you to work for them.

Johnson’s article discusses analog engineering. This discipline was the core of the electronics field for decades. The circuits engineers designed prior to the 1980’s were primarily analog electronics. Think about volume controls and tubes in old FM radios; heaters in toasters; the motor driving a table saw. As digital technology exploded on the scene in the 1980’s, college engineering programs started cranking out digital engineers, and there has been a dearth of analog engineers since. The result is that good analog engineers are now almost priceless. So much for “not being cutting-edge,” eh?

Like I’ve always said, it doesn’t matter what’s hot; what matters is how hot you are. Read more →

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How much money should I ask for?

On April 2, 2008

A reader wants to know how much money to ask for:

“I’m considering a position, but I have no idea how much such a position ought to pay. My last employer compensated me at approximately $60K plus stock options, etc. How can I figure this out?”

You’re asking about a specific position, but the approach I’m about to describe applies to all sorts of positions when you’re trying to decide what kind of compensation to ask for.

There’s no way to determine what to ask for until you know more about the work this company wants you to do. What you earned at your last job has little to do with what you’re worth to this company. And that’s really the key: what are you worth to this employer?

To answer that question, you’ve got to do your homework. Read more →

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