The Problem With Salary History

One of the biggest problems in business change and business process has always been the way we do recruiting. And the era of Internet job postings has actually made this worse, but that’s a discussion for another day.

The good news is that one part of what’s wrong with how we hire just got really clear. I stumbled across this piece a few days ago, and the art on it sums the problem up perfectly:

Make offers based on what the job is and what value the person will bring.

Not based on their last salary and potentially flawed pay practices of the former employer.

Think for just a moment about how spot-on that advice is. In particular, consider just how important that italicized bit is to the conversation. Whatever else you think about negotiation and salary practice, when salary history is the guide you include mistakes other people have made in your business process formula.

Once again, think about that for a moment. No, really. Stop for a second and think about it.

The Problem with The Salary History Question

Aside from setting up new employees in ways that might negatively effect how they think of you asking the salary history question is a negotiation ploy that—for example—perpetuates problems like the gender pay gap. No, I haven’t gone soft on what I said about women and negotiating just last week; women have a problem negotiating.

And we make it worse every time we define future earnings by looking at past income.

There are far better ways to fine-tune your personnel-based business processes than through asking about salary history. Let’s talk about better hiring criteria. Let’s look at smarter help-wanted ads.

When you ask the salary history question in an interview, you aren’t trying to slot the candidate so much as find a chip with which to negotiate. OK, hooray; you save a few dollars. But the salary you pay an employee isn’t the most expensive part of his or her cost. Recruitment itself is the most expensive part of personnel, and the salary history question is screwing yours up. But I’m guessing you already knew that.

There are plenty of ways to look at the issues behind the salary history question, and we’re just getting started. So, let’s talk.

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