Why do employers want salary histories?

February 15th, 2010
By

Originally, I was going to write about employer interview pet peeves today. Then I heard from a reader who has her own pet peeve with employers: Why do they persist in the "archaic" practice of asking job candidates about salary history? Does it really matter what you used to earn, possibly doing work that was totally different?

In her case, she left a high-paying job on the mainland to return home for personal reasons. She was willing to work for a lot less because she was interested in starting a new career, and she was financially well off. However, she wonders if putting down her past income caused potential employers to consider her as being over-qualified.

I asked a couple of staffing firm owners what they would advise in that situation. Should she omit salary history information, or add a note that explains she's willing to work for considerably less than what she used to make? If I get any advice from those job placement experts, I'll post it in the comments section.

I'd love to hear from employers, HR people, and job-seekers on this topic, plus any other pet peeves you have related to the interview and application process!

So tell me, is past salary history really relevant anymore?

Today's links: Good U.S. News piece on "How to Be Your Own Career Expert" and "7 Questions for Every Career Changer."

Worth thinking about even if you are currently employed!

10 Responses to “Why do employers want salary histories?”

  1. Rich Figel:

    Judy Bishop, owner of the staffing firm Bishop & Co., sent this reply to the salary history question:

    They should leave it blank and try to avoid answering that question. Throw the ball back in the interviewer's court by saying, "Perhaps, instead you could tell me what the job pay range is?"; or "You probably know better than I what this job is worth"; or "My prior pay isn't relevant to this job."

    - For more info on Bishop & Co., visit their website:
    http://www.bishopco.net


  2. Melissa:

    I've tried what Judy Bishop advises, which got me an interview, so that worked. However, when I tried to leave the question on the application and on the job-verification fax requests to my previous employers, the company recruiter literally forced me to state my salary on the paperwork.

    Wouldn't it simply be mutually efficient for both the recruiter and applicants to know what the job may be paying? As an applicant, I wouldn't bother applying for the job or accepting an interview if I knew I couldn't accept that pay rate. The company could still offer a fair rate to me if I am the lucky person to have been chosen to fill the position? Time is money and interviewing an applicant with specific pay requirements simply wastes time.


  3. Rich Figel:

    Thanks for sharing, Melissa! Here's another response from Signe Godfrey, president of Olsten Staffing. What she says makes a lot of sense...

    Signe: The biggest reason is because those who are used to making a certain salary, tend to take whatever they can until they find something else paying more. Employers are hesitant because they have been "burned" by so many former employees who have done this, and it is not just one or two. I believe almost 99 percent of employers have been "burned."

    Also, psychologically, I have found when you hire someone who has been making considerably more and they make much less than before, they tend not to work as hard...

    Companies are afraid to hire people who were paid higher salaries than they can offer and people who have much higher skills than are needed. All companies have been "burned." We all believe in giving people chances, but then we get burned too. The bad apples really spoil it for those who are good!

    To find out more about Olsten Staffing, you can go to:
    http://www.olstenhawaii.com/


  4. Melissa:

    I can appreciate Signe's statements about companies being burned. As a previous dept manager from California company, I have seen many a high paying contract employee 'take' all it can from a generous company and not leave one accomplishment in their short-lived company position. And, honestly, I am guilty of taking a lower paying position and not staying, but only because that position was in a field that I just left and the work was way below my experience and capabilities. Having said that though, if I am seeking out employment to fulfill my second career goals, then shouldn't I be given the chance to shine, if I pass and accept all the job requirements?


  5. Rosette:

    they ask maybe to make sure they are not going to overpay! or seeing the person made enough cash they will hire the other person that need the cash!


  6. Signe Godfrey:

    I need to further explain about how employers are "burned" which is to say the cost to hire and train is what makes employers feel taken advantage of. The time that is given to train is so costly that many employers are not willing to take a chance and make the same mistake twice especially when budgets are tighter and leave no room for considering a proven mistake.


  7. Rich Figel:

    If another company is willing to pay the same person a lot more to leave that job, then maybe it's a sign the employee was being underpaid to begin with. I think some employers feel they can low-ball new hires because they know it's a tight job market.

    However, if they really want to retain quality employees, they should be willing to pay more to keep them from jumping ship. Maybe have built-in raises after a probationary period... as Signe points out, it's costly to train replacements! But I get the feeling some employers are willing to take that risk to keep their immediate payroll costs down.


  8. Michael:

    A job is a job. One should work hard no matter what the pay. Just because one is in a union does not mean they are to paid each year an increase. I hate slackers and many are in unions. they get paid extra each year because they are members but not hard workers. being in the union means a pay raise whether one is a hard worker or slacker. Frustrating for those who work hard while the other slacks.


  9. Rich Figel:

    Michael -

    I'm going to repost your comment in today's Open Forum blog since it really is a different topic than the thread that was started here... Maybe other readers might have similar thoughts to yours about unions. Are you talking about a specific union?

    Aloha,
    Rich


  10. Michael:

    Rich Figel:
    Sorry for going off subject. I have been working for an Airlines and left after 25 years. After that I worked for jobs with way less pay. A job to me is a job. I had medical and all the benefits. So I worked for jobs with high pay and jobs that was within a good standard. I have never ran away from work, from being in Customer Service to Janitor or Landscaper. I feel that many jobs discriminate me because of pay scale before or one does not take me seriously since I had a higher paying job compared to a lesser paying one.

    As far as unions, I have been in several and find there are people who just do a job to get paid with no pride. Company won't fire them cause of unions. No union names mentioned but many are involved with state or county or airlines. I am sure you can think of names.

    I feel when asked about pay history, one would think the company is asking if I were union or non-union member. Pay in a union is much higher than a non-union member or company run that is non-union. Reason I commented as written. If asked what I want in my new salary I put down a wage I can be happy with. Not the least but close to it. As I said I just want to work. At my age.