A bill winding its way through the Massachusetts Legislature would prohibit recruiters from asking prospective hires about their salary histories—one of the myriad legislative proposals emerging in states around the country as part of the broader discussion around pay equity in U.S. workplaces.
Supporters of the ban on salary history queries say it would lead to increased pay equity among workers. However, it would also upend what’s become a common HR practice where candidates are asked on applications or during screening interviews for their past compensation and desired pay as a quick way to whittle down large numbers of candidates for open jobs.
“Historical pay discrimination is perpetuated when past pay sets future pay,” said Jim Brennan, an HR consultant with extensive total rewards experience based in Bellingham, Wash. “There is strong prejudice against anyone earning outside the income band acceptable to the hiring manager. Those who earn much less have not risen to the level of proficiency to earn the minimum of this opening’s value.” At least, that’s the quick presumption recruiters make when deluged with piles of applications and under time pressure, he said.
An argument can be made that disclosing salary hurts high-earners, too—typically senior workers who have climbed their way up to a pay level above what companies they’re now applying to are willing to consider.
Using salary history especially limits women, said Katie Donovan, an equal pay consultant and speaker and founder of Equal Pay Negotiations, based in the Boston area. “The elimination of the salary history question allows women and their employers to hit the reset button with each new job,” she said, citing a recent Salesforce audit that found a $3 million pay gap between its male and female workers. “Any of these women who applied for a new job and supplied their salary history would have anchored their future pay lower than their male colleagues’ if they had done so before Salesforce issued the raises.”
Recruiters respond that asking about salary history and desired salary ensures clear expectations among candidates and aligns expectations with the pay range for the position, avoiding an unwelcome surprise at the end of a potentially long hiring process. Knowing a candidate’s compensation helps HR negotiate the best deal for both the candidate and the employer, recruiters say. “Going in blind,” they add, is not productive for anyone involved.
“It’s a waste of time to put the candidate through the process and get to the end, only to realize there is no way we can accommodate their requirements,” said Erin Stevens, a corporate recruiter with MasterBrand Cabinets, based in Jasper, Ind., who inquires about salary history and expectations during the initial phone screen.
Amy Miller, a recruiter for Microsoft based in Seattle, said she doesn’t mind providing candidates “some ballpark numbers of what an offer may look like” but would not proceed very far without some input from the candidate. “As a recruiter, I don’t care about your current salary unless it’s overinflated and I can’t possibly afford you,” Miller said. “If you’re grossly underpaid, I get to be the hero who lands you a massive pay raise. Companies generally have a range and will pay what they pay, regardless of how that makes you feel. Where you land within that range is based on a lot of factors, not the least of which is how well you interview.”
Stevens compared the job search to buying a home. “Normally, you set a budget and look at houses within what you can afford. You can always look a little above your budget, but if you have no parameters in which to search, you could find your dream home and then find you can’t even begin to afford it, a lose-lose for both the buyer and the seller,” she said. “If discussion of salary doesn’t happen early on, it sours the candidate experience, builds up the hopes of the candidate and the employer, and is ultimately a letdown.”
Donovan, who helped craft the Massachusetts bill, said if the proposal is made law, job offers would then most likely be based on a combination of factors, including the market value, the employer’s budget, the employer’s philosophy of pay and the candidate’s credentials, instead of “unknowingly growing upon past injustices” by anchoring or calculating offers based on previous pay.
“Recruiters and hiring managers would have to work harder sifting through more candidates to focus on potential deliverables from the performers rather than seize upon proxy elements like their prior pay level that have no real relationship to their value to the hiring organization,” Brennan said. He added that additional benefits to eliminating the salary history question would be the discovery of more “diamonds in the rough,” more flexibility in job pay classification and more variable hiring offers, which include a variety of compensation vehicles like profit sharing and bonuses.
Andrea Ballard, SHRM-SCP, a recruiter and owner of HR consultancy Expecting Change, based in Olympia, Wash., offered a middle ground that could satisfy job seekers wary of being lowballed and employers seeking clear expectations as the hiring process moves forward: “If an employer wants to ask about salary history, especially early in the recruiting process, they need to be equally open and honest about the salary range of their position. What’s so frustrating to candidates is being asked about their current salary without any corresponding information about the position pay. If an employer said to a candidate, ‘Our pay range for this job is $22 to $25 per hour; is that what you’re looking for in your next position?,’ it would show a level of transparency and trust to potential employees and prove that the position pay has nothing to do with the previous employer’s wages.”
This article was published by SHRM. A link to the original piece follows this post.