How to Deal with Salary History Questions

Last Updated Jan 12, 2011 6:27 AM EST

In response to an article detailing 2010's Weirdest Interview Questions, BNET reader kjameshall asked the following question:

Here's a question that should be illegal and is definitely unethical. "What is your salary history?" I think companies have a lot of. . . nerve to ask what you have been paid in the past. Isn't this confidential information between an employee and previous employers? I'd like to hear what other people on this board think about this subject or better yet, a story on BNET about this practice. I won't be providing this answer in the future and I will be letting the company know that it is none of their business.
I'm here to tell you that it's neither illegal nor unethical, although it may be stupid. Now, while I'd be in favor of getting rid of all the stupid things that take place during the hiring process, I'm not in favor of outlawing stupid altogether.

Employers ask about your salary history for 3 reason.

  1. The assume you want a raise. Managers don't want to waste time conducting interviews only to find out that you are currently making more money than they have budgeted for the position. They assume you want more money than you are making now (or for the unemployed, at least in the same ballpark as your last job), and asking your salary history is an easy way to asess this.
  2. They want to see a steady increase in salary over the years. If your salary history goes like this: $45k, $50k, $52k, $55k, then super. They know that you've steadily increased your salary and are a dependable sort. If your salary history is like this: $45k, $60k, $75K, $100k then you are a fast corporate climber with high potential. If your salary history is like this: $45k, $46k, $30k, $22k, then you are categorized as a loser who is on the way down. They don't want to hire someone who peaked 2 companies ago.
  3. They presume that your previous/current company valued your labor correctly. If another company was willing to pay you $50k a year, they figure that is just about what you are worth. Sure, you've gained some additional experience, so they'll offer a nice $55k and you'll be thrilled with the increase.
That's why they do it. And you can see, these reasons aren't irrational. Most people do want a raise. Most of the time, people's salaries do increase over time and decrease is an indication of a problem. And, most companies benchmark their salaries against their competitors (at least most large companies do), so most salaries are fairly accurate.

But, it's also sloppy compensation work. Companies should be evaluating the position, determining a correct salary range and then informing the job seeker that the job pays "$45-$55k, depending on experience." Then, if you are making $60k, but want a shorter commute, or less responsibility or whatever, you can still apply. Your act of applying informs the company that you're willing to work somewhere in that range.

Now, every time I make this suggestion (or the suggestion that companies should be open with salary ranges) I get HR people jumping in and saying, "But if I post a range of $45-$55k then every candidate thinks he is work $55k!" Of course, we all want to make more money. (Sally Struthers, anyone?) However, I make it habit to hire people who are capable of understanding that salaries vary based on experience and that they may not have the maximum experience needed to do this job. I have no problem saying, "The offer at $52,000 per year is firm."

There are ways you can avoid salary history discussions. You can do as you suggest and tell the person that it's none of their business, but don't be surprised if they don't bother to interview you. Confrontation is rarely the path to job interview success. Instead emphasize that you are looking for a job which pays fair market value and that you're sure they are offering that. Or you can answer the question with, "I'm looking to make somewhere around $55,000 per year." The reality is, though, some companies just won't hire you if you won't cough up your salary history. I think it's a ridiculous position, but it's the reality you have to deal with.

Another reality is that online applications may require you to put a salary in before they will accept the application. In those situations you have the option of putting in your real salary, putting in an obviously false number ($00.37 per year), or not applying. Before you take up the idea of putting in an obviously fake salary, remember that a human may not even look at your application if the recruiter searches only for people who previously earned $x per year.

Companies should be more open with their salary ranges. Candidates should not be so freaked out about sharing information. Everyone needs to remember that the job interview process is about finding the person who is the best fit for the job, and one of the things that must fit is salary.

When the economy is soaring along and companies are desperate for good workers, you can be more obstinate about not revealing your salary than you can when there are 25 other qualified candidates. If 24 of the candidates are willing to answer the questions asked, you'll be dropped from the running. It's unpleasant, but a reality of the current job market.

For more information on salary discussions:

Photo by JSmith, Flickr cc 2.0