Why Employers Need to Stop Asking for Salary History, Right Now

Posted by Bob Corlett on April 24, 2017

 

If you want to hire the best qualified people, you need to stop insisting on seeing someone’s salary history in your hiring process. Not in your ads, not on your applications, not in your interviews, and not when you make your job offer.

Not too many years ago, employers would routinely ask a man if he was married (because those fellows presumably made better employees). Employers would routinely ask women even more intrusive questions, often about their plans to have a family. Of course, if you asked those archaic questions now, an army of HR professionals would take up pitchforks and run you out of town. With good reason—those questions were deemed illegal because they had no bearing on a candidate’s ability to do the job.

But here’s the problem. That same army of HR professionals defends and perpetuates another badly outdated practice—requiring candidates to disclose their salary history as part of the hiring process. Yes, it’s still legal (in most places) and common to ask for a salary history. It’s even enshrined in many employment applications. But it will not continue to be legal for very long, and it’s already counterproductive…because, just like the illegal questions, it has no bearing on a candidate’s ability to do the job.

It’s already illegal to ask for salary history in Massachusetts, and legislation to ban it is pending in many other jurisdictions. In a few years, asking for salary history will be perceived as being every bit as biased, backwards, embarrassing and ill-advised as asking any of the currently illegal questions about age, race, gender, religion, and family status.

In an article on the SHRM website that discussed the pros and cons of requiring a salary history, the primary argument for requiring salary history was to avoid wasting time with candidates who are not in your target salary range. But this is easily remedied with another approach. (In our search firm, we offer candidates the option to either share their salary history or their salary expectations, it’s totally up to them. And here is why we never share the proposed pay range the employer is considering.) As the SHRM article correctly noted, “compensation varies from industry to industry, region to region and employer to employer; it is hardly objective.” In the SHRM article, the reason NOT to require salary history is quite compelling, “When employers force people who have been underpaid in the past to disclose their previous salaries to help determine their next one, prior discrimination is perpetuated into future bias.”

The research behind these new laws is sound, they are good public policy. And the logic behind changing your HR practices, right now, is unimpeachable. Don’t enshrine past discrimination into your hiring practices by looking at salary histories to set future salaries, and don’t collect salary history just to weed out candidates and save time for your overworked HR department. Instead, when you are deciding what to pay your new hire, think like a compensation professional.

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Topics: Salary