Take the Question Off the Table: How the Ban on Salary History Inquiries Works in Your Company’s Favor

Many jurisdictions across the country, including New York City, Westchester County, Albany, Philadelphia, California, Delaware, Massachusetts, New Orleans, Oregon, Pittsburgh, Puerto Rico, and San Francisco, have enacted legislation with the aim of closing the pay gap between men and women.  These laws generally prohibit employers from asking job candidates about their salary history either in writing or at an interview.  The rationale for the bans is to prevent the perpetuation of a pay gap or wage discrimination based on a prior employer’s possibly nefarious motives.

Many employers view these laws as an impediment to the hiring process.  However, there is an upside to eliminating salary history inquiries altogether.  Taking the question off the table will not only improve company culture, but it will yield better qualified and more talented new hires.  These laws are forcing companies and hiring managers to improve their screening and hiring processes.  Regardless of jurisdiction, here is why your company should eliminate the question about salary history and how you can use the salary history ban to your advantage.

Salary history is not only an unnecessary factor when deciding to hire new employees, but the question actually prevents companies from considering individuals with different experiences or sets of skills.  In this ever-growing competitive market, companies cannot survive if their employees all fit the same cookie-cutter mold.  Smart employers know that if a candidate demonstrates they are motivated, can learn quickly, and can do the work, they likely possess the competencies, skill-set and education required for the position.  Your company will surely miss out on hiring diverse, top-tier talent, non-traditional candidates, military vets, and high-potential candidates who learn quickly by filtering based on salary history.

What most employers fail to understand is the link between company culture and the ban on salary history.  The culture of your company is a most sacred thing and is comprised of the collection of accepted behaviors from which the success of your business grows.  Your company should always strive to align its culture with its recruiting practices.  The salary history question is a rote, automatic question asked during interviews and candidates almost never blinked at when asked the question.  However, there has been a shift in mindset of job candidates when thinking about sharing salary history with potential employers.  Many job candidates perceive their current pay as a private matter that is not up for discussion when being interviewed.  Even if your company is not located within a jurisdiction subject to a salary history ban, candidates may view your company’s culture in a negative light if asked about salary history.

As millennials increasingly populate the workforce, employers are also realizing they must adapt and forego hiring norms in order to impress millennials and to find the most qualified talent.  From the moment candidates apply to a job posting on LinkedIn or answer your recruiter’s call, they begin to experience your company’s culture.  Throughout the entire interview process, potential new hires are assessing your culture to see if their values correspond with the values of your company.  Many candidates, especially millennials, will view an inquiry about salary history as insensitive, invasive, and irrelevant.

Employers need not fear that eliminating the salary history question will leave hiring managers at a disadvantage when trying to figure out the appropriate salary to include in a job offer.  However, it will require some effort on the employer’s part to embrace the ban on salary history.  Companies should conduct both internal audits and external market research to determine the range of salary that is suitable for the job position.  Despite the additional time it will take, employers can position themselves for increased employee engagement, retention, and profitability by developing a system to establish salaries based on the external market research, the company’s internal logic, and where job performance is rewarded fairly.  During the interview process, hiring managers will get a sense of the candidates’ skills to deduce the proper salary to be included in the job offer.  However, there should be a preset salary range in place for the position.

In light of these new last, and best practices, hiring managers can navigate around the salary history question by stating the salary range outright during the interview and asking if the candidate is still interested in continuing the interview process.  In addition, an employer can still inquire as to the applicant’s desired salary without seeking prior salary information.



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