Salary history: Just say no

http://corcodilos.com/blog/224/salary-history-just-say-no

by prakash • 18 years ago

45 63 18 years ago

What a bizarre concept. Both HR and the applicant should have done market research and come to similar conclusions about the appropriate salary range. If the applicant is qualified, what on earth does it matter if he was lowballed by his previous employer? Similarly, if the applicant did his research properly and is still applying for the job, clearly he is indicating that he is prepared to take a pay cut.

Also, the self-righteousness of claiming "privileged information" is patently absurd. I'll tell anyone who asks what I make. More transparency gives power to employees. Companies want you to keep your salary a secret for their own reasons.

tptacek8• 18 years ago

Because:

(a) HR's job is to hire you for the lowest possible price.

(b) By telling them your previous salary, you've conceded a great deal of information about what your negotiating floor is.

Two very basic rules of salary negotiation, which process could not be further from market research:

* Don't name a number first (whatever number you give is the highest number that will occur during negotiation, even if their range went higher).

* Don't give up your "invoice price" --- the cost for them to move from your previous job without you taking a pay cut, or, worse, if you're unemployed, the price at which you'll think they're still doing you a favor.

jbarciauskas2• 18 years ago

I don't disagree that HR's job is to hire you for the lowest possible price. However, I see the information you concede as largely irrelevant if you are knowledgeable about the state of the market. As in stocks, past prices don't matter, only what someone else will pay right now.

Locke3• 18 years ago

You're first point strikes me as incredibly jaded. That may be the case at poorly run companies, but hasn't been my experience. As in most business relationships, the goal is not to screw the other party. The goal is to arrive at a win-win, where both sides can be happy.

Let's look at what I can expect if I screw someone over with the lowest possible salary:

* An employee who can justify doing the bare minimum it takes to get the job done, because after all, he's being paid the bare minimum

* Low morale. Can I not expect the individual to bitch about how poorly the company treats its employees?

* High turnover / no loyalty. How much money am I going to waste bringing people up to speed, only to see them hop to the next job as soon as possible? How can I expect to retain valuable employees when I don't treat them as valuable from the start?

It's a poorly run business that screws over it's employees, customers, and / or partners just because it can. I like to think most good business people recognize that that sort of approach does not yield the best results over the long term.

Frankly, I have no concerns about revealing salary requirements or providing salary history. If a company doesn't treat me fairly during negotiations that's a huge signal that it's not the sort of company I want to work for.

geuis• 18 years ago

could the author have used bold any more?

snowbird1222• 18 years ago

This comes down to negotiation theory. Is it better to make the first offer, or wait for the other person to make the first offer? I used to think "The first person to mention a number loses", but after taking a negotiations class and applying some of the concepts, I learned the power of anchoring the negotiation by mentioning the first number. After the first number is mentioned, you are now negotiating around that range. This has proven to be very effective for me.

fugue88• 18 years ago

I've read that way the number is stated also affects the range. For example, 100 has a large negotiating range than 90, and 90 larger than 92.

I haven't had a change to use this yet, though....

snowbird1222• 18 years ago

I haven't thought about that, but it definitely makes sense. Do you have a source on that?

timr3• 18 years ago

You can't "anchor" a corporation. It doesn't have feelings or emotions -- it has a big table of pay ranges for people with X years of experience and/or education.

Your strategy works if you name a "negotiable" number that is higher than what you really want to make, but near the employer's upper bound for the position. Guess right, and you'll be negotiated down to a number that is mutually acceptable. Guess too low, and you'll be under-paid. Guess too high, and you'll be bounced without further negotiation. No matter what you do, the onus is on you to guess correctly the numbers on the employer's sheet. That's why saying the first number is bad when you're negotiating with a more knowledgeable opponent.

If you've had a lot of success with the "anchoring" method, it's likely because you're not coming close to the upper bound of the pay range that your employers had pre-determined for their positions.

tptacek8• 18 years ago

Caution: you're not negotiating with a corporation, you're negotiating with an HR person, whose job performance is tied in part to how well he/she negotiates.

chollida12• 18 years ago

> Guess too high, and you'll be bounced without further negotiation.

This hasn't been my experience. My experience has been if they want you then they'll find a way to make it work.

If you don't fit in one grid then they'll just bump you up to the next grid.

run4yourlives5• 18 years ago

> it has a big table of pay ranges for people with X years of experience and/or education.

Those ranges are so large that in most cases they're pretty much irrelevant. If you're a good enough candidate, they'll make it work. Why you would want to knowingly under pay yourself just for this particular job?

there• 18 years ago

bold tags: just say no

time_management4• 18 years ago

When I left finance, I hid my pay for the opposite reason of most people. I knew that most tech companies wouldn't match the absurd compensation I'd earned at a hedge fund, so there was no point in divulging it.

I'd never say, though, that I refuse to divulge pay based on a company policy. That makes the position seem weak. "I'm not telling you, because I'm not allowed." I'd make it clear that I'm not divulging it because I don't want to, and any company that wouldn't respect that desire on my part is a place where I wouldn't want to work.

davidu• 18 years ago

It's always wise to put a number out first. As an employer, I try to do that. As an employee, I've also always done that.

It sets the dynamic and expectations. Obviously if it's crazy, it also provides an immediate opportunity to correct an unreasonable expectation.

run4yourlives5• 18 years ago

Yeah, I've never understood all of this salary secrecy crap. Just tell them what you want to be paid! If it's way more than they can truly afford, at least you won't waste any more time.

If you know what the market is paying and are comfortable with a particular wage, what the hell does it matter if you're under everyone else?

yummyfajitas• 18 years ago

If an hour of negotiation gives you $5k more money per year, you just got (effectively) $5k for an hour of work.

comatose_kid2• 18 years ago

Nick's Ask The Headhunter column was a great source of job hunting strategies when I first read him on EETimes (I think) back around 2001.

ig1• 18 years ago

The problem with this is that it's mainly a disadvantage to disclose your current salary if you're earning below market rates.

If you're earning above market rates you want to disclose your salary both to show the company how much your previous employer values you and also to get you a higher salary at the new company.

Hence the people who aren't disclosing their salary are implicitly informing the company that they're currently being paid below market rate. While it might not be true for everyone who refuses to disclose salary, it's true for a large enough percentage of applicants that it's safe to assume.

ghshephard9• 18 years ago

I've been hiring in the valley for the last 12 years, starting off in the interview chain at Netscape in '96, and moving into management at my current organization in 2003. Since I moved into management, and end each interview chain (with a candidate that I am the hiring manager for, and have a candidate that I think we will bring on board), I have always ended the interview with three questions: Do we have your application filled out, When can you start, and "what did you make at your last company."

"What did you make at your last company" is a valid question, and I know of no employer (at a Silicon Valley Company) that has instructed their employees to _not_ tell future employers what they make. It is, of course, considered good taste not to discuss compensation (Stock or Salary) with coworkers - but it's remarkable that there aren't typically company policies against that. (There are exceptions, I'm sure)

The thing is - you _need_ to color that answer. Don't just say "I made $150K/year as a Sysadmin at my prior company", it's fine to say "They were paying me $150K, but that was probably an outlier, and I'd be very comfortable making $115K." Or, "I was making $90K/year, but I'm looking to make $115K at my next engagement" - You probably know (through salary.com, your colleagues at other companies, etc..) what the market will pay for your skills - and that is the number you need to communicate during the interview, what you are _worth_. It is as destructive and harmful to a career to be paid more than you are worth, than it is to be paid less than you are worth.

The employees being overpaid are always the very first ones to be laid off, while their less skilled, but more appropriately compensated colleagues, are kept on. And, when you aren't being laid off, if you aren't delivering to your compensation level - you are never receiving positive performance reviews - even if you are performing at a much higher level than someone less well compensated - makes for a stressful work environment. (There is more to a job than money.)

Speaking only for myself, any candidate who starts going down the road of "I won't fill out employment application until we are interested in each other", "I won't discuss previous salary", "I won't provide references until there is an offer letter", etc... - just screams "Prima Donna"

That strategy might work if you are a very strategic hire, with very specialized skills, in a very tight job market - but in general, life is too short to have to manage those type of personalities, and I'd rather just take a pass and bring on someone who is willing to work _with_ me, and not _against_ me.

Locke3• 18 years ago

I'm not sure your post deserves to be downmodded -- it seems honest and on topic. I can see how one bit in particular could come off as slightly offensive:

'Speaking only for myself, any candidate who starts going down the road of "I won't fill out employment application until we are interested in each other", "I won't discuss previous salary", "I won't provide references until there is an offer letter", etc... - just screams "Prima Donna"'

This is a matter of trust. Salary history, a detailed employment history, and references are private. In the case of references it would be down right rude, to repay the people who are willing to vouch for you by spamming their contact info to anyone who asks. There is nothing unreasonable about withholding that info until both sides clearly serious about moving forward. If anything, I wonder what your cavalier attitude screams about you?

ghshephard9• 18 years ago

So, In a world of Networks that need to be built, customers that need to be deployed, ticketing systems that need to be improved, Post Mortems that need to be completed, and Network Architectures that need to be visioed - I simply don't have time/energy or, even the _ability_ to deal with someone who isn't going to throw themselves 100% onto the team. And that starts at the interview. Perhaps it's a reflection on how I perceived the employer/employee relationship.

The interview is a (very poor) proxy for what the work relationship will be like with the candidate in the future. Firing people is such a major, major hassle (particularly as you get bigger) - that unless the person is grossly incompetent or breaches company policy in an unambiguous manner, you typically have to wait for the next round of layoffs to get rid of them, even if they are difficult to work with.

What this means, is that you are looking for all the danger signs you can during an interview - and hiring someone who is going to "Stand up for their rights" or "as a matter of principle, not share detailed employee history", is fraught with risk. Both of those actions are entirely reasonable in and of themselves, but, for better or worse, they portend, for the potential employer, risk.

And I guess that's what I was trying to get across (from the perspective of an employer) - that rightly or wrongly, your actions in holding back information or challenging the employer in an interview, will be sending clear signals.

If you are a strategic hire, or if the job market is tight, or if you have some very, very specific skills - then you can probably afford to negotiate hardball, and be as difficult as you want - they aren't hiring you for the person that you are, but the things that you can do - but, in the 95% of the time a hiring situation is taking place, that is not the case.

[added: And as far as spamming references - ask anyone who hires; actually getting around to calling references of people you are _hiring_ is hard enough - I don't know if I have _ever_ contacted a reference unless a salary, start time, and position where pretty much agreed upon. And I'm better than most at getting around to that task. ]

shiranaihito3• 18 years ago

This discussion feels strange, and a bit amusing to me.

In Finland, it's accepted that your salary is none of anyone else's business.

Potential employers understand that private matters are private, and so they practically never even ask.

It's common sense, isn't it?

After all, your current salary is information that will only be used against you, so it's logical that you don't want to tell.

ghshephard9• 18 years ago

Perhaps it is a result of the fairly liquid and rapid moving environment in silicon valley. People change jobs frequently, and trying to figure out what to pay someone can be challenging when age is not a proxy for ability/experience. It's not exceptional to see someone on a team with 30 years of experience making $75K/year, whereas another contributor, with perhaps 8-10 years of experience, making $130K. The interview is so short, you typically only get 5-6 hours of conversation with the individual, and you want to make the right decision. Salary numbers are only one component of that deciding factor, but a useful one.

time_management4• 18 years ago

The first is fairly ridiculous, and I can understand not wanting to hire such a person. The second makes perfect sense; you should at least respect that he's honest enough not to flat-out lie to you, as most people would do. (In finance, every banker got the top bonus for his level of seniority.) The third is sketchy-- it sounds like he's trying to hide something-- but I can understand his not wanting to provide a current reference, lest he jeopardize his current job.

ghshephard9• 18 years ago

You can't really lie about your salary - too easy to get caught, particularly in Silicon Valley. And, if you claim to be a $130K/year Network Engineer, but are really a $85K a year Network Engineer - you'll not only get caught, but fired for poor performance as well - there is just no upside in lying about making more money. Their might be some incentive to claim a _lower_ salary, but most people just say "I made way too much money at my last job X$, I'm willing to work for much less"

bhc3• 18 years ago

The concept here is great. But if those people laid off from Sun Micro and other companies divulge past salary in a tight job market, are they more likely to get a job over those who don't?

raganwald• 18 years ago

http://weblog.raganwald.com/2006/08/three-tips-for-getting-j...

What a hypocrite! When he's interviewing, he asks for salary history. When you're interviewing him, he just says no.

Salary history: Just say no

Related Stories