Tag Archives: Transparency

money pay gap

Should We Be Asking for Pay History Data on Job Applications?

In many states, it’s still legal to ask about candidate pay history. While some states have outlawed this practice, I still get questions like the one below fairly regularly:

I have a question for you that I thought you would be uniquely able to provide advice for. I am currently seeking new employment. When submit an application, the prospective employer asks for me to input a salary into the online application. The field does not allow a range and does not allow letters so I cannot say “negotiable”. How should I answer this since I am experienced professional and I don’t want to automatically disqualify myself by being on the high side of whatever range the perspective employer is looking at. How would you recommend I answer these questions? –A reader in Alabama

So, what should we do?

Rethinking the Question

money pay gapOne reason some states have outlawed the practice of asking for pay information is because it adversely affects certain populations. For example, women are likely to negotiate salary just 7% of the time while men are likely to negotiate nearly 60% of the time. This doesn’t even touch on minorities, where the numbers are often worse.

The problem I’ve always had with this question is this: what your last employer paid you should have zero bearing on the value I have placed on the position. If your former employer didn’t pay well, that doesn’t give me an excuse not to pay well.

The Frank Reality

For the most part, employers don’t set out to ask this question in hopes of messing up someone’s life. They aren’t asking about former pay rates to trap someone in a job making less than they are worth. While that sometimes happens, it’s not the goal for many employers.

The reason employers ask for pay history is so they don’t spend an inordinate amount of time walking down the path towards hiring a candidate they really like only to find out in the salary negotiations that the person wants $20k more than the role is budgeted for.

So, if employers want to avoid this roadblock without running afoul of the law, what’s the option?

At the front of the process, whether in the application or in the early screening conversation, simply tell the candidate this: “Our budget for this position is $X to $Y. Does that fit your expectations?”

[Read more:  Pay transparency, pay equity, and a powerful model for how to guide these conversations]

Yes, you’re showing your cards. Yes, you’re being transparent. But it satisfies two things. First, it helps to make sure you’re legally compliant in any markets where this applies. Second, and perhaps most importantly, it helps to demonstrate that you are dealing in a fair and transparent manner with potential employees.

This long-standing method of waiting until the first person blinks (that’s what career coaches tell candidates to do in salary negotiations) is a terrible way to run the process for everyone. Nobody wants to speak because we’ve all been told the first person that speaks in a negotiation loses. However, this isn’t about creating a combative experience for new hires–it’s about building a new relationship. Don’t you want to start it the right way?