Of course employers want to pay as little as possible for as much talent as possible. Its a textbook supply and demand problem.
On the supply side, employees want to get the most money for the least amount of talent. It balances out in the middle.
MikeRochenelle wrote
I see. Well, first off, I said “unlikely to pay you double…”. I’ve paid plenty more then what the past has indicated is fair, if fair seemed like plenty more.
But fair is fair. If you have a history of being paid X, that’s your issue. I sympathise, and as a fellow board member, I’m happy to give you advice about how to increase that. But it’s your issue that your market value is low. I sympathise, but don’t take it out on me.
I accept and reject people based on their qualities and their fit for what we’re looking for. Or at least I try my best to. Don’t break my heart, here Ben. Gimme a second chance. Please. We need you, Ben.
In case you doubt that your employer would pay you less money if they could, I offer the example of a company several of my friends work for. During the dot-com boom, they realized that silicon valley salaries were skyrocketing, and their employees were eyeballing these startup companies and considering leaving. The company instituted a huge percentage bonus that you automatically received if you lived in the silicon valley. They were very up front about the fact that this was specifically to compete with rising silicon valley salaries. Everyone was pretty pleased with this. When the dot-com boom was over, the temptation to jump ship was greatly diminished, and the silicon valley bonus was eliminated. In other words, they decided that they didn’t have to pay as much any more, so they opted not to.
This doesn’t strike me as particularly surprising or evil.
Here’s a thought: maybe they want to know because they really want to hire you and want to dangle a big fat carrot in front of you. So they go “how much did company A pay you?” and you say “$40k” and they go “we’ll go 50k if you can start tomorrow,” etc.
It could happen!
I don’t have a problem with being asked my salary history but I really do think employers should ask when they are actually considering hiring you. It’s not fair to assume that someone won’t want the job because you see that they were paid 40k at their last job and you can only pay them 35k.
Sometimes it may not be relevant such as in looking for a different type of work. I also believe many organizations are doing some market research and there may not even be a real position to fill.
Salary history is none of their business! Maybe I worked for a firm that could afford to pay big, or perhaps a firm that could not afford to pay a fair amount for the location and type of work. I am sure there are many other reasons that SH should not be part of the hiring process. Tell’em to do their own homework! - kidding!
It also works as a “blind bid” sort of situation. The companies where I’ve applied in the last months do not discuss, the do not negotiate. “How much do you want? OK, next question.” They give the same reasons as Bill H. but the point of it is that they are in practice taking bids on the job - lowest bid gets it.
Not pleasant, but understandable. And a real pisser when you can’t get a grip on what is fair pay. Pay can vary drastically over relatively short distances here, so you can’t usually tell what the other prospective employees are “bidding.” It sucks, but that’s the way it is.
and monkeys could grow wings and fly out of my butt.
It’s a power play. As I get more mature and experienced, i’m a lot better at the salary negotiation game than I was a decade ago. Once you’re at a certain level, you always delay salary negotiations in a professional way. This has already been pointed out.
If you are a damn good fit, a good manager will figure out how to up your package. Work with them to understand how their budgets operate, and maybe they can only pay 50k, but can do a lot of other non cash renumeration on top of that. If it’s a good manager, get him to run interference with HR as well.
If you have a great job that you’re satisfied with and compensated well, then you have the bargaining power. “I won’t consider anything less than a 25% raise. End of story.”
If you don’t have a job and you’re strapped for cash, then you don’t have anything to bargain with.
Having worked for several extremely large multinationals, always think asking about past salary is shitty. You are basically screwed no matter what you answer. Too high and they assume you won’t be happy and don’t want the job. Too low, and they think you’re a loser.
Now it may help some of you to say flat out you’re changing industries or careers, therefore what you made in the past has no relation to the new position. Also, that you have some realistic expectations that the fast food manager position pays significantly less than investment banking, but hey that’s what I want to do and understand I won’t be compensated like I was previously.
Then looking at the salary history is at best only going to give you a very general idea, and in many cases may be completely misleading. Don’t confuse value and price; the former, at any point in time, is fixed, and the latter tends to fluctuate around the former. The prospective employee may well have been grossly under- or overpaid by some or all of his last employers.
If you can’t figure out on your own how much to pay an employee based on his skill set and experience, then I would question your competence as a businessman. But I will assume you are a competent businessman and that you ask for a past salary history in hopes that the employee has been historically underpaid so that you can justify offering a salary below fair market value.
To the original poster: this is only my opinion, as luckily I’ve never been asked this question myself on a job application, but I would suggest being (at first) politely evasive if the question pops up on a job application form or an interview. Don’t make it look like you’re trying to hide something, but just see if they’ll drop the matter without comment. If they insist on numbers, then try giving your salary as a range if you can justify it. For instance, if you had a job that had opportunities for bonuses, overtime, commissions, etc., make sure to mention that. Also be sure to mention any non-standard benefits you may have received; you can’t convey your worth to an employer based solely on the amount written on your paycheque. A New York English teacher who makes $30,000 a year plus health benefits is probably a lot worse off than a Riyadh-based English teacher who makes $30,000 a year tax-free plus health and dental benefits, free accommodation arranged by the employer, six weeks’ paid vacation, and a $6000 annual travel stipend.
In any case, you will be the final arbiter of what salary to accept. You should have some rough idea of what you’re worth, and if the company does not offer this to you, then you should definitely try to bargain your way up. If you suspect your past salaries haven’t been reflective of your true value, then do some research. Ask other people with similar backgrounds what they’re getting paid; there are even some websites which collect statistics on this sort of thing.
Best of luck with your job hunting!
Asking for past salary history is strategy. To say that it’s OK because the prospect has a chance to respond to the strategy is silly. There’s no getting around that it’s the employer taking advantage of their position of power to ask things that are none of their business. To give someone more or less money based on their past job is as fair as giving someone the same job duties as their last job. That is, not fair at all. Not particular smart either.
China Guy, SnoopyFan was not out of line with that comment. Basic rule of thunb is to not take another job unless offered a 20% increase. Of course if one is out of work and needs a job, then the high ball game is not wise.
A company should pay a fair salary and that is dependent on “salary history.”
By the way, for those full of righteous indignation: When you apply for a job, you’re selling something. You’re like the vacuum cleaner salesman who knocks on someones door. It could be the best damned vacuum cleaner in the world, but it’s your job to sell it. Not the buyer’s job. Don’t get all uppity when what you have to sell looks too expensive to the buyer, or when the buyer wants to look under the hood to see if they’re getting their money’s worth.
And another thing, for those who seem to see me as the jerk on the other side of the table holding all the cards: every employee goes through this. The CEO has to sell himself to a company before they’ll hire him.
Unfair? Of course not. Here’s a little clue for the naive: it’s a better plan to understand how the world works and devise strategy within that world then to whine because the world isn’t to your liking.
And one more note: In general, the people who have worked for me have far and away enjoyed working for me. Many people who have worked for me at one company have left to work for me at others. A lot of people have made a lot of money working for me, including 5 individuals who are millionaires as a direct result. Don’t tell me that I don’t know the value of people. Everything in a company is about the quality of the people there. But this question (and the ensuing discussion) is about salary history and salary negotiations. Don’t get upset because an employer doesn’t want to pay you better then what you’re worth, and don’t get upset at me for bringing you news you didn’t want to hear.
I am not upset at you but your idea of “worth” is flawed - see my last reply - it was at the same time you were replying
You have no idea what my idea of “worth” is, friend. All we’ve talked about is salary history, because that’s what the OP asked about. What gave you the idea that this is all I look at to determine worth? Or any other employer for that matter?
Hey Bill, I can only base my idea of you by what you post. It was you that said, with regard to SH, that they only want to pay you what you are worth.
You need to have a cup of your own “don’t get upset” advice!
That is correct; I said “Don’t get upset because an employer doesn’t want to pay you better then what you’re worth.”
Now, where did I say that your worth can be determined only (or even mainly) by your salary history?
Oh, and did you miss this statement? It was in the same paragraph as your quote: “Don’t tell me that I don’t know the value of people. Everything in a company is about the quality of the people there.”
You said it - Jerk
I will now stop before the mods get upset
Bye
I find it disingenuous of an employer to assert that he doesn’t already know the market value of the position for which he is hiring.
Honestly, the idea of just winning a multi-million dollar lottery jackpot and opting out of the whole “earning a living” go-round gets more attractive every day.
As an interviewer and hirer of technical people, this is your best piece of advice right here. If you do not wish to answer the question, don’t answer it in a very diplomatic fashion. If I ask a question and get an indignant or overly defensive answer, a red flag goes up and the interview is ended quickly, with no follow ups.
I don’t ask the salary history question very often. Almost never actually. I usually ask “what rate could I offer to make you come work here?” About 75% of the time people will then quote their last salary, expecting something similar or slightly higher. About 5% will have a number to offer and we go from there. The other 20% do the “I don’t know, anything is OK, I guess” answer - these are the ones that get lowball offers.
I don’t think I’ve ever heard of an employer claiming he doesn’t know the market value of the position, and I don’t think asking about your salary history is supposed to indicate that, either. It’s just another piece of data to consider, along with what they’ve historically paid, what people are asking for on average for this position, etc.
Your past salary can be indicators of a few different things, as mentioned above. It gives them an idea of what you’d expect (and presumably they know you expect more than your previous salary, but that also depends on market conditions), it gives them an idea of whether you’re lying about your past job (i.e. if you said you were head surgeon but you had the salary of a junior surgeon, you’re probably full of it), and it gives them an idea of whether you’re simply out of the ballpark. It’s not necessarily a really good indicator of any of them, but it’s still information to be considered.