Pete Gwilliam is director of Virtus Search
Although a potential employer does not need to know your salary history before hiring you, in some cases you may be asked or at the very least asked what your salary expectations are.
I certainly advocate that having a plan for how you will address such questions about your remuneration expectations will help you remain professional while navigating that conversation.
The expert knowledge of recruiters about current trends and salary bandings for different role types, seniority and region is certainly something to draw on for both employers and candidates alike, but the underlying issue about asking specifically for a candidates’ current salary is that it undermines all diversity, equity and inclusion initiatives.
When you base someone’s salary on their previous pay, you are inheriting gender, race, and social class gaps in pay from their previous experiences.
Although many employers are attempting to close the pay gap as they strive for equality in the workplace, so potential employers who use historic information as the basis of a suitable offer to attract a candidate are not really valuing candidates on their level of skill and whether they bring additional perspectives and values to the culture.
Of course, many firms have bandings associated with the level of a role, and the opportunity to earn according to the new challenge will be framed by a salary range and bonus and benefits commensurate with a grading attached to the role type, and surely therefore the applicant’s credentials presented in the selection process, considered against the qualities and value offered by internal and external comparison is a much less biased way of deciding what salary someone is worth.
Pegging a candidates’ new salary to their previous salary has little rationale and yet it’s still part of many recruitment discussions. Obviously candidates who have taken time out of the workplace or indeed those who have been employed in regions that historically have paid less can be really disadvantaged.
Several cities in the United States have made it illegal for employers to ask candidates a salary interview question and where the salary history ban has been enacted have reported a 5-6% increase in pay has been seen for people moving jobs. But more importantly, the boost was larger for women (8-9%) and African-Americans (13-16%).
There are growing calls to ensure Salary bias does not follow a prospective employee throughout their career and there is no reason why employers can simply ask what someone’s expectations are.
A further reason to remove this from your hiring mindset is emphasised by a feature on CNBC that reveals a quarter of Europeans fabricate their salary during job interviews and 40% of those embellished their earnings by 20%.
The Viewpoint on Diversity, Inclusion and Equity in the mortgage industry study comprises the results of its survey conducted in July, in which 1,178 people shared their perceptions and lived experiences of diversity and inclusion in the mortgage industry.
The data highlighted that straight white men consistently earn more than their colleagues, and income inequalities increase with seniority, for example, in the two highest income brackets:
15% of straight white men in the sample earned between £90,000 and £125,000, significantly outnumbering women (6%), LGBTQ+ (2%), and colleagues from ethnic minority backgrounds (5%).
In addition, while 17% of straight white men earned more £125,000, only 2% of women, 4% of LGBTQ+ people and 5% of ethnic minority people reached this income level.
Of course, pay gaps aren’t simply fixed by removing the “what salary do you earn?” question from selection processes employer, but from 2017 Employers with a headcount of 250 must comply with regulations on gender pay gap reporting, and I’m sure this is likely to be followed by ethnicity pay gap reporting becoming compulsory too, and thus there is a need to start taking action now , especially when you consider according to the Viewpoint report, 50% of LGBTQ+ people, 46% of women, and 43% of people from ethnic minority backgrounds believe there is a lack of transparency over pay and rewards in the mortgage sector.
So, let’s all focus interviews and selection on candidates who fit the requirements and can do the job regardless of salary they have been earning.
Let’s not assume previous earnings dictate what value we believe someone can offer.