Salary History

by Mr. Cheap

Part of most job interviews is where they ask you about your current salary or salary history.  This is obviously valuable information for the other side of the negotiation to know, as it tells them exactly what amount of money you were willing to work for.  At it’s core, while useful for them to know, I think it’s a highly inappropriate question.

I have a somewhat skewed view of employment compared to many people.  I have been an employee at a large number of venues (from McDonald’s to Nortel), a manager (with 4 people working for me), a sole-proprietor (from a paper boy through to running my own software company), a contract worker, and a dot-com startup employee.  I’ve worked in industries from server management software to hospitality / tourism to education.  All together this allows me to see employment as a fairly balanced process, employees need jobs and businesses need employees.  The market rate for the work is how badly each side needs the other.

The dot-com boom (and bust), which I caught the tail-end of in San Francisco, was the far side of the pendulum where employees were in the drivers seat.  Companies were desperate for tech workers, and some employees developed prima-donna attitudes.  While this certainly wasn’t right (as I used to tell the CEO of my company when he hand-delivered my morning coffee and I was chastising him for not putting enough milk in it), the standard attitude prima-donna attitude of the employer isn’t right either.

Asking for a salary history is an example of this.  How is it any business of a potential employer what you’re being paid at your current or previous jobs?  This is between the previous companies and yourself and has nothing to do with potential employers.  If you were to turn the question around and ask them to provide a copy of last weeks payroll to all the employees in the company (or even asked the salaries of everyone working comparable positions at the company or what they’ve budgeted for the position) there’s no way they would answer.

No one likes answering this question, but I think enough people feel intimidated by the interview process that they do (and it has become a standard question).

How Answering Hurts You

The company obviously has a range they want to pay for the position, you have a range in salary you’re hoping to earn.  If you’re lucky there’s an overlap and both side want to a) come to an agreement and b) have that agreement be the best possible deal for them (low salary for the company, high salary for the employee).

The problem is, if your current salary is very low, it may be below what they’d intended to pay, in which case they’ll happily match your current salary (or give you a small bump that’s still below what they originally intended as the low-end).  For someone who had to temporarily take a job at a lower salary, this can make it a very painful process to claw there way back up to what they should be getting paid.

Conversely, if you quote too high a salary, they might just decide that you’ll be unhappy working for what they can afford to pay you and not offer you the position.  You may have considered the salary they’re willing to offer, but by having quoted the high number you never get a chance to hear their offer.

I don’t advocate lying, even in answer to inappropriate questions, but there’s extra reason not to lie here:  a lie can STILL hurt you if it’s the wrong number.

Ways To Evade The Question

This is a tough one (much harder than the old “don’t be the first to mention a number” idea).  In truth, I’ve always been fairly confident that I’m getting paid market rate (and have been happy to negotiate with an offer letter in hand) and have provided this salary history information when asked.  I don’t think I will if I’m ever asked in the future however.  Off the cuff, some ways I’d consider answering would be:

  1. “Unfortunately that’s priviliged information I’m not able to share.”
    • PRO:  Quickly ends the discussion, if pressed you can say that YOU make it privileged, not the previous employers (much like when someone tells you “sorry that’s against our policy” as a “reason” why they can’t do something).
    • CON:  You come across as somewhat aggressive, which for most jobs isn’t the image you want to convey.
  2. “I’d like to focus on whether I’m a fit for this position, and I’m sure we can work something out with salary after we’ve determined that.”
    • PRO:  Taps into the “don’t talk numbers” game, and they might let it go without firming it up.
    • CON:  Probably they won’t accept the attempt to sidetrack things and will try to pin you down.
  3. “Why would you like to know that information?”
    • PRO:  If you ask this sincerely and don’t come across as defensive, it may give you a chance to just talk philosophically about salary information (perhaps discuss some of the points in the section above) and you both may agree to just leave this question unanswered.  Depending on why they say they want to know, you may be able to answer the underlying question without providing the history.
    • CON:  They may not take it as sincere and you may come across as aggressive.  They might just say it’s part of their interview process and not provide a rationale (and demand an answer).
  4. “I’d be happy to give you that information, but first could you please tell me what salaries people currently in this position at this company are earning”
    • PRO:  Clearly makes the point that this is a one-sided questions that is clearly inappropriate.
    • CON:  Most people don’t hire smart-asses, so you’ve probably just talked them out of hiring you.
  5. “Well, I don’t think my recent salary history is relevant because of XYZ”
    • PRO:  If you have a solid reason (such as learning something new at your most recent position or being overpaid for some reason) they might accept that as a reason not to answer.
    • CON:  In all likelihood they’ll just say “we’ll take that into consideration” and still want to know.
  6. “My last job paid $1,000,000 annually, and the job before that paid $1 / year”
    • PRO:  Perhaps as a second attempt to deflect after one of the early responses, humour may be able to put off the question.
    • CON:  Even when it’s an obvious lie, deceit as part of a job interview may not be the best idea.

How do you answer when you’re asked about your salary history for a job?  Do you feel this is a reasonable question?  Any ideas for better responses than I’ve come up with?

Be Sociable, Share!

{ 20 comments… read them below or add one }

1 Writer's Coin

I like number 5 the best. If you have a case to make more money that your current job, then you should have some reasons as to why. In which case I’d be glad to share the number since I know I’m worth more than that now.

2 ObliviousInvestor

What’s worked well historically for me was to go in armed with as much info as I could about market rates for comparable positions. (In the field of accounting, the data is very easy to find.)

I’ve been able to get away with quoting a range (of market rates) without having to pin down precisely where my salary was within that range.

3 DividendMan

When I got flown out to Silicon valley to do an interview (a six hour ordeal at a very successful software company) the HR people at the end asked me what I currently earned. I responded by telling them that’s private information and asked why they needed to know. To which they repsonded that it was “just for their records”. I said I don’t think that’s a good enough reason and left it there.

Of course, I knew by that point that I had aced the interview, so I didn’t mind being a bit smug.

Also, I got the job, and a large increase in salary from my previous position (I still negotiated the offer though).

4 guinness416

Yeah, either a range or sort of ignore the question and say “well, what I would need to leave my current employer would be $X” where X is a nice chunk of change is what I’ve used in the past. Mind you, in a number of interviews those meeting with me have been oddly reluctant to ask about salary. One actually said “I’m sure I can’t legally ask what you make”. I guess it depends – if you’re in a sellers’ market (which I’m generally in and it sounds like you are too) I think you can risk the cheekier answers as long as you maintain professionalism and affability and don’t come off snotty or arrogant while doing it.

5 Thicken My Wallet

I read an article lately that indicated that you should evade the question during the interview process and re-focus the interviewer on whether you are a fit for the job (as you also indicate, if you make an unreasonable salary comment during the interview, you are giving your potential employer reasons not to hire you).

6 Dividend Growth Investor

I like points number 4. Of course if they don’t hire you for your thinking on your toes then do you REALLY want to work at that place?

I was once being asked on an interview in the US what salary I was expecting to get. I said a number, and it was on the low range of their offerring ( they did let me know what their range was after I answered them however)..

7 jesse

I got this one:
Q: How much do you make at your current position?
A: I am bound by a confidentiality agreement with my current employer regarding my salary.
Q: Well then, what would you be expecting to make in this position?
A: Ummm….

I think the best way, as mentioned, is to focus on whether one’s skill set, experience, soft skills, and intellect are a good fit for the company.

The company should be prepared to pay fair to market for the role; I would not want to work for a place that would try to pay under market. That’s a sign of a sweatshop, a place where the employees may not be happy or of high caliber, or may have high turnover making the long-term prospects difficult. The employer may claim that their salary is only one component compared to the other benefits awarded. If so, ask them to list them for you and write them down on a piece of paper. You should always try to attribute a fungible number to any “intangible” benefits awarded.

I agree to do some research about market rates for a position and state that, if you are a good fit for the position and are indeed in the top quartile of available applicants, you would be expecting a salary in the top quartile of similar positions in the industry.

Often you will get the “it’s a recession” argument and the job market is depressed which is difficult to refute, though if you are a good fit and existing employees at the company are earning a certain wage, it is best you come somewhere into the field as you will never catch up without moving jobs again.

Coming from the other side, I think many employers ask the “how much do you earn” question to try to see if there’s any hope of finding a match. If my salary expectations are way above what they are prepared to offer, might as well stop the interview process dead in its tracks and part ways. Know what others in similar positions are making using glassdoor, professional salary surveys, or through your colleagues over a beer.

8 Mr. Cheap

Wow, great comments and strategies for dealing with this. I was expecting the comments (if any) to be along the lines of “I just tell them my current salary”. We’ve got some smart-ass readers here!

jesse: You’re absolutely right that determining if there’s a possible fit is a worthwhile part of the exercise (and it’s a waste of everyone’s time if there upper range is below your lower range). That being said, they can avoid this problem by providing a salary range along with the job description (that’s probably how I’d try to address this issue with them, they can name a figure and I’ll stop the process if it’s too far away from a possible agreement).

9 Silicon Prairie

I think it’s entirely fair to at least ask what you would expect to make at the new job – recently I’ve been surprised at how willing people are to talk about this (and most of them did disclose their current salary, but then I can’t verify it). I have turned down people because their salary expectations were too high, but that’s to be expected in any business transaction – if the price is equal to 100% of the value why would the other side do the deal?

My view of negotiation is that if you want to find something that works for both sides, you just need to explain the situation and understand their needs (maybe in the reverse order). If the question comes up early in the interview then it may not be appropriate to answer it because it depends on how much the employer likes you and how much you like the job, but at the end it shouldn’t be too hard to discuss.

If you aren’t paid enough at your current job, you could say “I don’t think my current salary reflects my true value and I’m ready to prove it when I start working for you” (if you’ve learned enough in the interview to give concrete examples of how you’ll do this you’re ahead of the game). Or you could also say “My current salary was set before I learned new skills/got more experience/got additional certifications, so I’m looking for something that takes this into account.”

If you think your current high salary will scare the employer off you could hint that you’re willing to accept a slightly lower salary by saying “I’m very interested in this work and I want to find something that works for both of us; what range are you looking at?” or just come out and say that you’re willing to work your way up in exchange for having a job that’s closer to what you want.

Of course the danger of advice like this is that some people will think they deserve a 10% raise because they learned a new function in excel. There are cheap employers but there are also employees with unrealistic expectations (this might even be the main reason the interviewer is asking).

10 Eric

I was just placed in the unfortunate situation recently. I wish I had read this article beforehand. Is salary information classified as “public information”?

Thank you kindly for your help.

Peace,
e

11 Dylan

My answer would be:

“My total compensation from past employers has always been fair and reasonable given my experience, responsibilities, and job expectations, and I would expect the same from any future employer.”

I think that tells them where you stand on answering the question, and it demonstrates tact and recognition that salary is only a piece of total compensation. It’s also hard to make any kind of counter argument against “fair and reasonable” or even for the hiring manager to pose a follow-up questing with out risking sounding like total douche bag.

12 jesse

Dylan, that’s a good one. We often forget what answers employees get from management on confidential or sensitive issues. Often it’s an answer that doesn’t have any numbers attached and full of carefully worded but meaningful statements. Your statement is, in the business world parlance, a way of saying, “None of your business. I am at a huge disadvantage if I tell you, and you know it. In order to keep things fair we should not see each other’s cards.” If they keep pressing you, repeat verbatim your previous sentence. That is, in the business world, a way of saying they aren’t getting what they’re asking for and if they don’t pick that up, they’re probably going to be difficult to work with or they don’t have much experience in negotiations; both bad signs from your POV.

Listen to your company’s CEO when she/he answers a prickly question. When dealing with prickly questions, speak their language answer them in the same way. People often think that employers will get upset you’re not answering the question but, actually, if you are to be a liaison doing business deals, however small, on their behalf, the last thing they want is someone who caves so a simple negotiation tactic.

When you avoid direct questions, the employer may look annoyed but keep it positive and express interest in working for the company and demonstrate how you have always had a company’s interests at heart when performing your past jobs.

Mr. Cheap, you should do a posting on the “language of business” or something about how to read certain statements from management. It can be of huge help when people are doing business negotiations like determining starting salary. I’m sure you have some personal examples of what was said and what was really meant.

Love the blog.

13 Mr. Cheap

Dylan: I agree with Jesse, I think that would be a great response (and if you had to repeat it, I agree that it says something big about the hiring manager).

Jesse: Good idea for a post! Thanks for your kind words.

14 Steve Hanov

A good excuse to not quote your salary is confidentiality. Every raise I’ve ever gotten has been marked, “strictly confidential” on the letter. Technically, I could be sued for revealing it!

Thanks for the link. I happen to read this blog and it was an unexpected surprise to be linked back to.

15 ppindia

hmm…Interesting, here in India you are almost forced to answer the question since you have to bring your last 3 months pay slip, bank statement, income tax returns, offer letter of previous company to prove what your previous salary is(which they will be verify later!). Otherwise however good you are you wont get the job!

16 RP

I’ve been through managers training at a large telecomms company where i learned that future employers cannot inquire as to many details (legally) of your previous employment. Those details include such things as salary, attendance, sick days taken, tardiness, HR cases, performance reviews, reasons for termination or departure and even your position. Truly the only information a previous employer *can* share with a future employer is that you in fact worked there, and what your start and end dates were. If any other information is shared you have the right to sue your previous employer for any number of reasons, and can collect future income not earned as a result of their negligence.

Morale to this story is – that is confidential information, but determine your value before you ever talk to a potential employer. Practice negotiating salary in private (with your spouse or a friend) before you get there. And be able to recite a summary of your positive characteristics/values that you will bring to the position given your knowledge, wisdom and experiences. Be able to tell a story about yourself well beyond your resume. These all help in ANY negotiation, whether it’s for a new job or a 1st date!~

17 jc

Great advise guys! Got the question asked last year and wasn’t prepared. Gave them my true number and it hurt me, all they did was match it. IMO, that question can and only will hurt you if answered with a figure. Its an employer’s market so be ready.

18 CiscoWanaB

Okay, how to “correctly” answer this question when asked is akin to studying for an industry certification exam; the wrong answer could easily fail you from consideration. It would be highly unlikely that any two companies though process would be the same thus making it impossible to prepare an answer based on the above 6 scenarios.

19 CiscoWanaB

I agree with using the $1 amount for online applications. No sane employer expects someone to work for $1 per year and it will at least make you stand out, to a degree. I do not agree with answering in a manner that makes you appear aggressive. I’ve been on the telephone during a technical interview with half a dozen engineers grilling me over my technical knowledge trying to make me “slip up” and I’ve had to basically take over the call and say something like, “Okay, I can not possibly know the answer to every technical question that you could ask a candidate but I am confident that I would add outstanding value and experience to your organization that you will find highly beneficial should I be selected for this position. I have a high degree of learning potential and have proven that at every company that I’ve been associated with over my career.”

20 Helasraizam

“How much did you make with your previous employer?”
“Oh, about as much as I expect to make here.”
To leave them dumbfounded and speechless just long enough to change the subject.

Leave a Comment

Current ye@r *

Previous post:

Next post: