August 3, 2011

Sharing salary history is standard practice

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Q: Conventional wisdom seems to be that sharing your salary history with the recruiter -- as opposed to the prospective employer -- will not result in a lower offer. However, it then follows that once the recruiter has determined your suitability for the role, he or she should not share your salary history with the prospective employer. I have received an offer that is suspiciously well below what I understood the job would pay, but slightly above my current salary. My question: Am I justified in feeling this is a serious breach of trust?
-- C.O., Seattle

Kristen says: I assume you are working with a third-party recruiter who is representing you directly to an employer for a direct-hire opportunity. In that instance, it is in the recruiter’s best interest to negotiate as high a salary as possible, as the recruiter is usually paid a percentage of your first year’s anticipated salary.

That said, sharing your salary information with the client for a full-time placement is standard practice. Many companies include this in the submitting process that is part of the placement contract. Knowing your salary history is key in deciding whether to consider you as a candidate, as well as in shaping what an offer might look like.

Although you may feel as if you are being lowballed, many factors go into the salary offer. If you have a similar amount of relevant experience as other people on the hiring team, and they are making close to your salary, offering you a significant amount more upsets what is known as internal equity.

There is also the fact that bringing you in at a higher salary could negatively affect your ability to be promoted quickly, including a raise in your base salary.

For example, let’s suppose the “advertised” salary was between $40,000 and $52,000; you currently make $41,000; and you get an offer of $43,000. If the job description calls for six to 10 years of experience, and you have seven years, the company is offering you what other qualified candidates and current employees with the same amount of experience would expect.

The upper end of any salary range is dependent upon experience and relevant skills/education. If the company brought you in at a base salary of $48,000, you would more likely be stuck there for several years, as opposed to being able to get raises each year.

Consider your total compensation. How do the company’s benefits compare? If it pays 100 percent of your health-insurance premium or covers your family’s premiums, that could significantly affect your salary. You also might try negotiating a signing bonus.
It sounds as if you are already employed. If the base salary is an issue, you may need to look elsewhere.

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Read more
Recruiter's Inbox, benefits, ethics, negotiating, salary

2 Comments

Mike Gruber on August 4, 2011 8:35 AM | Reply

"Normal practice". Pththth. What's a better salary progression? 42, 44, 46K or 48, 48, 48K?

The idea that a new employer needs to know your old salary in order to make you an offer is complete BS. The argument that it's needed to maintain internal equity is BS as well. All they have to do to do that is know their existing internal salaries, and consider them when they make you the offer. Companies just do this so they can lowball you to the maximum degree possible.

J Clark on August 8, 2011 2:23 AM | Reply

Only the employer knows exactly what the job demands and should set the price according to that. The range would include experience, references, maybe education, but former salary should not influence the offer.

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