Does your jurisdiction have a salary history ban?
A number of states and several municipalities have passed laws banning employers from asking candidates about their past compensation. When I first heard this ban was coming I was puzzled by how employers would attract top talent fairly without this knowledge. I have spent a considerable part of my career conducting senior and executive level searches for clients. Compensation is one of the most common ways to lure a candidate away from their current opportunity. Without that knowledge, it feels a little bit like shooting at a dartboard in the dark hoping you have the right compensation range to attract A+ talent to your organization.
Check your state or local municipality here.
Why the change?
Pay equity. If you flip the issue upside down, states have determined that employers are unknowingly perpetuating the issue of pay equity by asking a candidate's salary, learning that it’s perhaps low and then offering them just enough to attract the candidate to make a career move. In this situation, you have an employee that’s being paid lower than the salary range and lower than their peers in the same job. Research tells us that this typically happens to women and the result is the gender pay gap.
Recruiter Stacey Moore says, “Overall I like the change and see the benefit for creating pay equity.” It has not been an easy change for people involved in recruiting and selecting talent and Stacey recommends that employers continue to educate their hiring managers, recruiters, and anyone involved in the recruitment process.
What’s the remedy?
The best practice that we recommend to clients is to explain the pay range to candidates during the phone interview, such as disclosing that a position pays in a range between $70,000 and $85,000. You might also ask if that range would meet the candidate's salary expectations.
What to do if an employee volunteers their compensation?
If you write it down, make note that the information was volunteered by the candidate without prompting. Remind the candidate that you can’t consider past compensation as part of the process (or specifically educate them about the Salary History Ban if it applies in your jurisdiction).
Is it awkward?
At first, yes! Will we someday look back at the past decades where we asked for salary history and think that it contributed to the overall wage gap? I believe we will.
What are your thoughts? How is this working in your business? Please add your comment below.
Amy McGeachy is an HR Consultant and the Founder of The Exceptional Workplace, a newsletter to help small business leaders stay focus on proactive HR and People Practices. Never miss an issue - join HERE.