We need to know your salary because —

In the April 24, 2018 Ask The Headhunter Newsletter, a reader cites the law about employers demanding job applicants’ salary history.

Question

The job application I had to fill out required I provide my current salary info. I just read that a U.S. Circuit Court of Appeals decided that employers can’t use my old salary to decide my job offer, so why do they keep asking? (Court Ruling: There’s Never a Reason to Use Salary History When Calculating Pay.) I’ve started asking HR why they need that information and, Man, have I heard some real doozies. Seriously, HR thinks we believe that stuff? You and your readers have probably heard bigger whoppers than I have — can you share a few?

Nick’s Reply

salaryThanks for asking. My purpose behind this week’s column is revealed in the title. When we get to the end of it, I’m going to ask everyone to complete that sentence: “We need to know your salary because — .”

But first, please bear with me while we briefly discuss that new court decision.

What’s the value?

I’ve been warning job seekers not to disclose their salary to employers since I before I started writing Ask The Headhunter, because I’ve routinely refused to tell my clients (employers) how much money my job candidates were making. (See Keep Your Salary Under Wraps.)

“I will help you assess what the candidate is actually worth to your company so that you can make a competitive job offer,” is my counter-offer to the employer’s demand for salary history information.

I’ll admit, I’ve lost a few clients over this, but I also fired a few over it. Most employers realize it’s a healthy exercise to figure out a particular job candidate’s value independent of what any other company paid them.

If they’re not willing or able to figure this out for themselves, then I think they’re not worth working with (or for) because relying on some other employer’s judgement of a worker is both stupid and a revelation that a company has no competitive edge on judging value.

You can just say NO to demands for salary information

I’ll never forget the guy who called to thank me for his 75% salary increase when he landed a new job with one of my clients: “You just helped me buy my first house!” His old salary was $44,000. The job offer he accepted was for $77,000. “Thanks for instructing me not to disclose my current salary even when they insisted, because they backed off!”

While not all HR departments will back off if you politely but firmly decline to disclose (“My salary information is private and confidential.”), readers report that HR usually lets it go and proceeds with the job interview. You must judge for yourself how to respond, but you must also realize that if you do disclose, you’ve probably destroyed your ability to negotiate the best job offer. An employer may have the right to ask for your salary, and it may be legally free to terminate your application, but you also have the right to say NO.

Gender-mandering the salary issue

The article you refer to was written by my good buddy Suzanne Lucas (a.k.a. The Evil HR Lady), and she correctly points out that while the issue in Rizo v. Yovino was gender pay disparity, the decision is not about the gender issue per se. While the gender pay gap is a big concern to me (see Don’t blame women for the gender pay gap!), for now (just for now) I’ll leave that angle to Suzanne.

My bigger concern is that in the battle over equal pay for women the courts keep missing the fact that once an employer learns anyone’s salary history, everyone gets screwed when job offers are issued. Knowing your old salary enables an employer to easily cap your new job offer. That’s actually the defense offered by the Fresno County Schools: They freely admit that they’ve stuck it to more than 3,000 employees over 17 years — men and women — it’s the policy!

[Fresno County Schools attorney Michael] Woods said in an email Monday, “FCSS’ policy, applied to more than 3,000 employees over 17 years, was similar to policies used by many other employers…”
Fresno Bee

While some employers don’t play that game, in my experience most do. It’s never smart to disclose your salary. (See Should I disclose my salary history? and Salary History: Can you afford to say NO?)

The Court issues a general rule about prior salary

Certainly, any legal win that protects women’s right to equal pay is a good thing. But now the 9th Circuit Court of Appeals has finally articulated the law in broader terms that seem to apply to everyone (emphasis added):

Prior salary, whether considered alone or with other factors, is not job related and thus does not fall within an exception to the Act that allows employers to pay disparate wages.” – Rizo v. Yovino

It doesn’t say “between genders.” This interpretation of the Equal Pay Act, a federal law passed more than 50 years ago, seems to prohibit any general use of anyone’s salary history to determine a job offer. Maybe I’m reading this too broadly, but I expect the debate has just begun.

HR’s salary game

Now let’s get to the purpose of this article: to discuss the games HR departments play regarding your salary history.

“We need to know your salary because…”

You’ve been there. You’ve applied for a job. Maybe HR called or e-mailed you and asked for your current (or most recent, if you’re unemployed) salary. Maybe you didn’t fill in that box on the job application form, and HR called to reprimand you.

You’ve heard the lines:

  • “We need to know your salary because… without it, we cannot continue to process your application.”
  • “We need to know your salary because… it’s the policy.”
  • “We need to know your salary because… we need to know whether you’re in our salary range.”
  • “Just tell us, because we SAID SO!”

What excuses have you heard?

The explanations for why HR “needs to know” your personal, private, confidential salary information are legion. But in all my years in business, I’ve never heard one good justification for why an employer needs to know how much money you make so it can consider you for a job.

The “reasons” are all so disingenuous and such tautologies that I have a standing challenge to all who work in HR: Give me one sound reason why you need to know how much anybody makes?

I’d like us to compile as extensive a list as we can.

What excuses for this salary demand have you heard? Let’s rack ’em up, expose them, look at them closely and discuss what it all means.

I’d also like to know what responses you’ve offered to HR — whether serious or snarky!

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Don’t blame women for the gender pay gap!

In the April 12, 2016 Ask The Headhunter Newsletter, the truth about equal pay rears its head.

When women get paid less for doing the same jobs men do, the real reason is obvious to any forthright business person, though it seems to elude the media, the experts, and even some women themselves: Employers pay women less because they can get away with it.

gender-pay-gapThe same pundits tell women that they should change their behavior if they want to be paid fairly for doing the same work as men. But the experts, researchers, advocates and apologists are all wrong. There is no prescription for underpaid women to get paid more, because it isn’t women’s behavior that’s the problem.

There is only one thing a woman should have to do to get paid as much as a man: her job.

When doing the job doesn’t pay, women of all ages should be aware that younger women today have the solution. According to a recent report from the International Consortium for Executive Development Research (ICEDR), some women have figured it out. Millennial women don’t need to change their negotiating, child-rearing, educational or any other behavior to impress errant employers. They know to quit and move on. This is going to change life at work as we know it.

The myths about women causing their own pay problem

Let’s look at what women are supposedly doing to abuse themselves financially.

We can refer to umpteen surveys and studies about gender pay disparity — and to some that suggest there is no disparity. But a recent Time magazine analysis summarizes the data from the U.S. Census and other sources: “Women earn less than men at every age range: 15% less at ages 22 to 25 and a staggering 38% less at ages 51 to 64.

This has become favorite fodder for the media — and for armchair economists and gender researchers and pundits looking to bang out a blog column. But I think most of the explanations about pay disparity, and the prescriptions for how to get equal pay for equal work, are bunk.

Depending on what you read, women get paid less because they:

  • Have kids.
  • Interrupt their careers for their families. (See: A stupid interview question to ask a woman.)
  • Don’t have the right education (e.g., STEM), so they can’t get good jobs.
  • Are nurturing, so they don’t negotiate hard enough for equal pay.
  • Don’t like to argue.
  • Lack confidence.
  • Let their men get away without doing household chores — so those men (if they’re managers) don’t know they should pay women fairly.

These explanations about lower pay are speculation and myth, but the message is always the same: If women would just change some or all of those behaviors, they can shrink the pay gap.

I say bunk. Women don’t cause the pay gap. Employers do. So employers should change their behavior.

The fact

I’ve been a headhunter for a long time. I’ve seen more job offers and observed more salary negotiations than you’ll see in a lifetime. I’ve observed more employers decide what salaries or wages to pay than I can count. And I am convinced the media and the experts are full of baloney about the pay gap between men and women. They are so caught up in producing eye-popping news that they’re doing women a disservice — and confusing speculation with facts.

Here are the facts:

  • Employers pay women less to do the same work as they pay men.

Well, there’s just one fact, and that’s it.

Women don’t make themselves job offers, do their own payroll, or sign their own paychecks. The gender pay disparity is all — all — on employers, because we start with a simple assumption: A job is worth $X to do it right, no matter who does it. It’s all about getting the work done. And the employer decides whom to hire and how much to pay.

Here’s the hard part for economists and experts to understand: Employers decide to pay women less, simply because they can get away with it. The law of parsimony instantly leads us to the obvious motive: Paying less saves companies money. Everything else is speculative claptrap.

A review of the bunk

Let’s look at some of the gratuitous “analysis” about why women are paid less than men. Look closely: It all delivers one absurd message: Women are the problem, so women should change their behavior.

Glassdoor, the oft-reviled “employer review” website, reports that overt discrimination may be part of the cause of gender pay discrepancies (Demystifying the Gender Pay Gap: Evidence from Glassdoor Salary Data). But, claims Glassdoor’s economist, Dr. Andrew Chamberlain, “occupation and industry sorting of men and women into systematically different jobs is the main cause.”

“Sorting?” Armchair apologist Chamberlain is saying women apply for jobs that pay less and men apply for jobs that pay more. While this may sometimes be true, what he fails to note is that when a man and a woman do the same job in the same industry, one is paid less because the employer pays her less. The absurd prescription for women: This will change if only women will change their behavior!

Then there’s the HuffPo, in which Wharton researcher Bobbi Thomason says that to fix the gender pay gap, “We need to have men getting involved at home with childcare and other domestic responsibilities.”

Gimme a break. Women, when you get men to wash dishes, you’ll change how boss men pay female employees. The prescription: It’s all up to you. Change your behavior at home.

The Exponent, reporting on Purdue University’s Equal Pay Day event on April 12, says that the wage gap is “largely based on the fact that, generally, women don’t negotiate their salary once they get into their career field.” Those women. Dopes. They’re doing the wrong thing — that’s why they get paid less! Change your behavior!

Kris Tupas, treasurer of the American Association of University Women chapter at Purdue, explains that employers pay women less “because our culture teaches women to be polite and accept what they’re given.” Again the prescription is for women: Change your behavior!

Linda Babcock, a professor at Carnegie-Mellon, wrote a book that explains women’s fundamental problem: Women Don’t Ask. Says Babcock’s book blurb:

“It turns out that whether they want higher salaries or more help at home, women often find it hard to ask. Sometimes they don’t know that change is possible — they don’t know that they can ask. Sometimes they fear that asking may damage a relationship. And sometimes they don’t ask because they’ve learned that society can react badly to women asserting their own needs and desires.”

Women get paid less because they don’t know they can ask! Gimme another break! And what’s Babcock’s prescription? Women — you have to ask to be paid fairly! Change your behavior!

Fox News’s Star Hughes-Gorup tells women how they can fix the pay gap: “Get educated.” If you want to make as much as the guy in the next cubicle who’s doing the same job, hey, get more schooling after the fact to impress your employer.

Next, says Hughes-Gorup, “Embrace asking for help.” Yep — if you learn how to ask properly, you can “start the conversation” about money. In time, you’ll be worth more. She sums it up: “I believe true progress will be made when we acknowledge that the real issue deterring women from talking about money is not confidence, but self-imposed limitations in our thinking.”

The prescription: Women: If you stop limiting your thinking, you’ll get paid more. So, get with it! Change your behavior and your thinking!

Disclosure: I can’t believe anyone buys any of this crap, much less that anyone else publishes it uncritically.

Millennial women have the solution

Why do all those articles prescribe that women must change their behavior to get paid more, when it’s employers who are making the decision to pay them less? Should women appease employers, or respond to unfair pay some other way?

Surveys over the years show that the top reasons people quit their jobs include (1) dissatisfaction with the boss, and (2) work-life balance. (E.g., Inc. magazine’s 5 Reasons Employees Leave Their Jobs.) Money is not the main reason.

But something has changed — especially for Millennial women. Lauren Noël, co-author of a report from the International Consortium for Executive Development Research (ICEDR), says, “Our research shows that the top reasons why [Millennial] women leave are not due to family issues. The top reasons are due to pay and career advancement.”

The report itself quotes women under thirty saying that the number one reason they quit is, “I have found a job that pays more elsewhere.”

What’s interesting is that the HR executives Noël surveyed don’t get it — HR thinks “that the top reason why women leave is family reasons.” Is it any wonder employers attribute lower pay to the “choices” women supposedly make?

The Millennial answer to lower pay

Millennial women are the generation that has figured out they’re not the problem. Unlike their older peers, they’ve figured out that when they’re not getting paid what they want, the answer is to quit and go work for an employer who will pay them more.

As a headhunter, I know first-hand that quitting is the surest way to take control when you’re underpaid and your employer will not countenance paying you fairly. I also realize that not all women — or men, for that matter — can afford to quit a job that is paying them unfairly. But that doesn’t change the answer that will most enduringly change how employers behave.

Kudos to women who take the initiative, and who don’t blame themselves or alter their own behavior when an employer’s behavior is the problem. I wonder how many employers have taken notice? Do they realize the generation of female workers that’s coming up the ranks isn’t going to tolerate financial abuse — they’re just going to walk?

payDo we need a law?

I’m not a fan of creating laws to dictate what people should be paid. But I’m not averse to regulations about transparency and disclosure. With some simple disclosure regulations, I think more women can start getting paid as much as men do for the same jobs.

Companies want our resumes; let’s have theirs, too — a standard “salary resume” provided to all job applicants, comparing pay for women and men at a company. Employers would be free to pay men twice what they pay women, if they want. And upon checking the salary disclosure, job seekers would be free to walk away and join a competitor who pays fairly for work done by anyone.

Let’s get over it: Women who do the same work as men aren’t the problem. Employers who pay unfairly are, and let’s face what’s obvious: They do it because they can get away with it. (For a story about an employer with integrity, see Smart Hiring: How a savvy manager finds great hires.)

If we’re going to analyze behavior, let’s analyze employers’ underhanded behaviors — not women’s personalities, cognitive styles, or biological characteristics. I’ll say it again — There is only one thing a woman should have to do to get paid as much as a man: her job.

we-pay-menEmployers who don’t pay fairly will stop getting away with it when they’re required to tattoo their salary statistics on their foreheads — so job applicants can run to their competitors. Or, more likely — since new laws aren’t likely — employers will change their errant behavior when a new generation of women just up and quits. That would be quite a news story.

Maybe then the media and the experts will stop blaming women for the gender pay gap — and start challenging employers to raise their standards.

(Considering quitting? See Parting Company: How to leave your job.)

What’s the solution? Do we need a walk-out? Do we need regulations? Do we need a corporate stock and pillory? Does anybody think there’s no gender pay gap?

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