The practice of asking job candidates for their salary history may be coming to an end, as more and more U.S. companies are eliminating the question and some states are even passing legislation banning it. The change, designed to promote pay equity, has the potential to benefit women and those who have been underpaid in a previous job, as well as those who haven’t been on a standard career path. Instead of basing salary on the candidate’s salary history, compensation is more closely aligned with the job itself and the skillset required to fill it.
Compensation discussions can be one of the trickier parts of recruiting and placing candidates, according to ROI’s Jenny Rogers. While clients generally have a specific salary range for each role, most companies request a candidate’s current salary, and some have required a full salary history.
At times, candidates are reluctant to share this information, Jenny says. They could be or feel they’re underpaid in their current role and don’t want to be low-balled by a potential employer. Some candidates are looking for a better fit – whether work/life balance or corporate cultural fit – and would consider moving for the same or even less salary.
From the company’s standpoint, knowing a candidate’s salary history helps ensure the candidate’s expectations are aligned with the organization. It gives a hiring manager an idea about whether the company can “afford” the candidate. If not, it gives the client the opportunity to consider either raising their salary target, or reducing their requirements. Clients may shift their search to find a candidate who is ready to step up into the role, rather then cut over fully ready for the role. The company may want to understand a candidate’s reasoning for considering a reduction in pay, and whether that reduction will become an issue down the road.
There are so many pieces to this, and it’s a huge factor in candidate/client decision making, Jenny says. It’s definitely something ROI will be keeping an eye on in 2018.