Tips for working with your recruiter #3: Be frank about your salary history and needs (part 2 of 2)

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In my last post on this topic, I emphasized the important of being frank with your recruiter about your salary history and needs. I also stated the concern that many candidates have that revealing their salary history to potential employers will disadvantage them in negotiations over salary and benefits.

In fact, as many of you know, many employers will flat out ask for a salary history. Many also will take pains to confirm this information, asking for a W2 or other proof. But the questions remain: What right do they have to know my salary history? Isn’t that private? Won’t they use that information to my disadvantage in salary negotiations?

With regard to the first two questions, it is true that the information is private, and you don’t have to reveal it if you don’t really want to. But companies do have a good reason for asking for it. Like you, they do not want to go through the whole interview process, which may involve paying for hotels and airline flights, and find out that a deal was impossible because of money expectations.

A company that’s big enough to have an HR department and will have salary range groups that are more or less set in stone. The key concept here is “pay parity”: companies want to keep people who offer similar levels of value within the organization at roughly the same pay levels. Failure to do so can cause resentment when one employee finds out that he or she is not getting paid the same as another employee doing the same job. It can cause lower-paid employees to demand the salary of a higher-paid employee, even if he or she is the exception to the rule. It can even lead to discrimination lawsuits. So for companies, pay parity is important.

Let’s say that there is a mutual interest between you and a company, and they want to join them. With respect to your current salary and their range, there are three main possibilities:

  • Your salary is below their range. In all likelihood, they will bump you up to within the range. They may offer you a salary near the bottom of their range (still a bump up from where you currently are) or even well into the range if they feel what you bring to the table is comparable to that of the average chemical engineer in the company. Of course, they may even do better than that if competing offers are on the table, etc.
  • Your salary is in their range. They will keep you in the range, likely giving you a bit of a bump up within the range if doing so maintains pay parity.
  • Your salary is above their range. This is the toughest case. The company may consider you for a higher-level job (“senior chemical engineer”) if they want to bring you on. There are also many other ways to make things work out, however, so there’s no need to despair. This is where a good recruiter can be of great benefit in the negotiating process.

And I believe I have answered the third question in the process of answering the first two. The above example demonstrates why revealing your salary doesn’t hurt you in salary negotiations in the vast majority of cases. In order to maintain pay parity, a large company will not simply low ball you and pay you a lot less than others at your level. On many occasions, we have seen companies give candidates a significant jump in salary in order to keep them within their set pay ranges.

I hope the above clears up why companies want to know your salary history. It’s one more reason why you can feel at ease when you provide frank and accurate information about your salary history and needs to your recruiter.

The Key Corporate Services Blog Team