Are Employers Playing Chicken With Your Salary History?
You want to feel like your work means something, like a professional performing their craft. Unfortunately, looking for a job can make you feel like a discount item on a shelf at a big box store.
This is especially true during salary discussions.
During your first phone call with a company’s HR department, the rep will ask you how much money you make — or how much you want to make. They will tell you they are simply trying to understand whether or not you’re in their budget.
The thing is, when it comes to salaries, companies have significant flexibility in what they can pay an employee. Chances are, the candidate is in the budget. What the company is really doing when asking this question is playing a game of chicken. The company is hedging their bets, to try to get a good deal by making sure they don’t pay a candidate more than they absolutely have to.
How much is an employer really saving on this exercise? Is it worth the cost of upsetting the candidate?
Years ago, I was shopping for a new car. I went to a typical car dealership, where I was treated like prey. Then, I went to a Saturn dealership, where I had a completely different experience. There was no negotiation. There was no pressure. If the car worked for you, it was yours. If not, no problem. Sure, Saturn no longer exists, but ask anyone who owned one of the company’s cars what the experience was like. You’ll find out just how positive it was.
According to Glassdoor, a 10 percent pay pay increase only raises the likelihood of employee retention by 1.5 percent. What does this mean?
It means that candidates are looking for the right job, not the highest-paying job. They’re looking for a fit. As part of that search, they want to feel like they are treated with respect by a potential employer. Asking the salary question right out of the gate is the very opposite of respect. It diminishes a candidate’s whole professional life to a price tag.
The good news is certain states and cities are beginning to outlaw questions about salary history. These new laws are shedding light on this important issue. When companies make decisions about salary based on a candidate’s pay history, they can end up perpetuating income gaps. If you’re underpaid today, you’ll probably be underpaid in the future.
However, bans on salary history questions won’t stop employers from asking how much you want to make. Before you answer this question, do your research. The answer you give in the very first screening call can severely weaken — or strengthen — your power at the negotiating table later on down the line.
A version of this article originally appeared on Copeland Coaching.
Angela Copeland is a career coach and CEO at her firm, Copeland Coaching.