Salary Histories Obscure While Salary Transparency Increases

by Dave Nerz

While questions about salary history are top of mind for recruiters and candidates looking to be considered for jobs, employers are struggling with salary transparency issues every day. Pay has long been a confidential topic in the workplace. In fact, most conversations about pay are limited to review time or when an employee is being given a raise or adjustment. With some employers, salary transparency is beginning to change.

Current studies show that in the US only about 27% of employers share salary information with employees and early-stage candidates. Another 22% indicate they are likely to start sharing this information with both employees and candidates. So, the workplace is very evenly split on this topic of salary transparency, or will be, as those planning to share actually start doing so. A full 51% do not share salary info and do not intend to do so.

So, what are the advantages to greater salary transparency? Those that currently share details, they find it speeds the hiring process, streamlines the negotiation process, ensures fair pay, filters out and saves time spent with those that would likely decline and offer, and creates an environment where more interview time is spent on other topics.

The future is sometimes driven by the market and other times government intervenes. Governments worldwide are interested in fair pay and are busy pushing forward transparency laws. Even from an employer perspective, the goal is not really about transparency. The ultimate goal is fair pay; transparency forces that faster than good intentions alone. Fair pay then instills trust in the company and the process. Lack of transparency creates lack of trust and can create pay inequity that is systemic. Leaving employees in the dark can create candidates that are suspicious and employees that are distrustful. It has been found that many employees incorrectly assume they are being underpaid relative to market conditions. PayScale, LinkedIn and Salary.com are driving market transparency that will require employers to share more if they do not want to be compared solely against generic industry/marketing data. A clear picture of rates and ranges will give employees an awareness of standing within their current job and what upside exists. This can all be used to retain and motivate when used appropriately.

Transparency comes with both risk and complications. Each employer needs to make fully informed choices that have been strategically thought through and implications considered. No doubt recruiters will save considerable time on candidates that may be a mismatch on salary where employers are fully transparent on salaries.

It is certainly an interesting trend that while employers are in the process of becoming more transparent about salaries, recruiters and employers on the other side of the equation are becoming limited in what they can ask employees. Salaries are trending toward transparency while salary histories are trending toward completely obscurity.


Why You Should Provide Your Salary History to Employers and Recruiters

by Dave Nerz

pink-piggy-bankIt has recently become a very popular point of contention for job seekers to refuse to offer salary history to prospective employers and the recruiters they use to source talent. While in some instances this may make very good sense, particularly if someone was significantly underemployed or underpaid, in most cases it is creating an unnecessary hurdle that may cause a candidate to be excluded from consideration for a job they really want.

Let’s look at this as a pure sales situation. Who is selling and who is buying in the employer-employee relationship? I would propose the employee/candidate is selling and the employer/recruiter is buying. So when a buyer asks, “What is the price?” the seller should be able to provide a price and some foundation for the price requested. Have you ever gone to a car dealer and when you ask the price of a car, the dealer says, “What is your budget?” That move is considered unethical in the consumer world and is usually a sign that they are prepared to take advantage of you. The employer will likely view it the same way when candidates are less than forthcoming with salary expectations and a foundation for a specific salary request. Read the rest of this entry »