7 ms·

Salary history: Just say no

45 points by prakash 18y ago

jbarciauskas 18y ago
What a bizarre concept. Both HR and the applicant should have done market research and come to similar conclusions about the appropriate salary range. If the applicant is qualified, what on earth does it matter if he was lowballed by his previous employer? Similarly, if the applicant did his research properly and is still applying for the job, clearly he is indicating that he is prepared to take a pay cut. Also, the self-righteousness of claiming "privileged information" is patently absurd. I'll tell anyone who asks what I make. More transparency gives power to employees. Companies want you to keep your salary a secret for their own reasons.
- tptacek 18y ago
  Because: (a) HR's job is to hire you for the lowest possible price. (b) By telling them your previous salary, you've conceded a great deal of information about what your negotiating floor is. Two very basic rules of salary negotiation, which process could not be further from market research: * Don't name a number first (whatever number you give is the highest number that will occur during negotiation, even if their range went higher). * Don't give up your "invoice price" --- the cost for them to move from your previous job without you taking a pay cut, or, worse, if you're unemployed, the price at which you'll think they're still doing you a favor.
  - jbarciauskas 18y ago
    I don't disagree that HR's job is to hire you for the lowest possible price. However, I see the information you concede as largely irrelevant if you are knowledgeable about the state of the market. As in stocks, past prices don't matter, only what someone else will pay right now.
    - tptacek 18y ago
      Two bad things that can happen to you if you give up your salary history, even if both parties are rational: (1) You can convince HR that it's not worth negotiating with you because your salary demands will end up too high. (2) You can convince HR that it's worth lowballing you and then waiting you out as long as possible because your salary history demonstrates your negotiating floor is much lower than you think it is. It's that simple. Of course, you don't have to take a crappy offer, but part of the point of salary negotiation is not to get crappy offers.
      - run4yourlives 18y ago
        > You can convince HR that it's not worth negotiating with you because your salary demands will end up too high. Why would you want to work somewhere for less than you've earned in the past?
        tptacek 18y ago
        Because you might be desperate.
        run4yourlives 18y ago
        If the opposing party in a negotiation knows you're desperate, you'll never win.
        tptacek 18y ago
        And a good way to imply that you're desperate is to give them lots of details about where you were working, when you were working, and how much you were making.
        shiranaihito 18y ago
        On the other hand, why would you want to work for just as much as you've earned in the past?
  - Locke 18y ago
    You're first point strikes me as incredibly jaded. That may be the case at poorly run companies, but hasn't been my experience. As in most business relationships, the goal is not to screw the other party. The goal is to arrive at a win-win, where both sides can be happy. Let's look at what I can expect if I screw someone over with the lowest possible salary: * An employee who can justify doing the bare minimum it takes to get the job done, because after all, he's being paid the bare minimum * Low morale. Can I not expect the individual to bitch about how poorly the company treats its employees? * High turnover / no loyalty. How much money am I going to waste bringing people up to speed, only to see them hop to the next job as soon as possible? How can I expect to retain valuable employees when I don't treat them as valuable from the start? It's a poorly run business that screws over it's employees, customers, and / or partners just because it can. I like to think most good business people recognize that that sort of approach does not yield the best results over the long term. Frankly, I have no concerns about revealing salary requirements or providing salary history. If a company doesn't treat me fairly during negotiations that's a huge signal that it's not the sort of company I want to work for.
    - tptacek 18y ago
      I agree with all of the things you've just said in principle, but none of them apply in the real world. A company that loudly embraced just one of those bullet points you just gave would top the "best places to work" lists. The problem isn't top-down corporate strategy; it's the concept of HR departments. When you: * establish an entire business unit apart from the real work of a company, * give it a mandate to meddle in the affairs of every other business unit in the company, and then * measure its performance in raw numbers, you get the systemic inefficiency almost every large company sees. It's not the people or their ideas that are messed up, it's the system. However, apart from all that --- if you think what I'm saying is "jaded", try being a vendor to large companies sometime. Prospective employees deal with HR. Vendors deal with Purchasing. At least HR tries to pretend to be nice to you. Purchasing departments (for consultants, or for products) are overtly intended to screw you. Finally, this isn't about whether you feel like you're being treated fairly. It's about whether you're best representing your interests during negotiation. The idea is not to lose leverage by conceding an advantage in information to your counterparty. An HR person would be fired if they revealed the salary history of the last 20 people hired into your group in the company. Under no circumstances would a company ever reveal that kind of information. But you concede it willingly. Why?
geuis 18y ago
could the author have used bold any more?
snowbird122 18y ago
This comes down to negotiation theory. Is it better to make the first offer, or wait for the other person to make the first offer? I used to think "The first person to mention a number loses", but after taking a negotiations class and applying some of the concepts, I learned the power of anchoring the negotiation by mentioning the first number. After the first number is mentioned, you are now negotiating around that range. This has proven to be very effective for me.
- fugue88 18y ago
  I've read that way the number is stated also affects the range. For example, 100 has a large negotiating range than 90, and 90 larger than 92. I haven't had a change to use this yet, though....
  - snowbird122 18y ago
    I haven't thought about that, but it definitely makes sense. Do you have a source on that?
    - notaddicted 18y ago
      I remember reading that as well. Here is what Google turned up: http://www3.interscience.wiley.com/journal/119410422/abstract?CRETRY=1&SRETRY=0 http://www3.interscience.wiley.com/journal/119410422/abstrac... EDIT: information wants to be free etc. http://drop.io/precision_of_the_anchor_etc http://drop.io/precision_of_the_anchor_etc
- timr 18y ago
  You can't "anchor" a corporation. It doesn't have feelings or emotions -- it has a big table of pay ranges for people with X years of experience and/or education. Your strategy works if you name a "negotiable" number that is higher than what you really want to make, but near the employer's upper bound for the position. Guess right, and you'll be negotiated down to a number that is mutually acceptable. Guess too low, and you'll be under-paid. Guess too high, and you'll be bounced without further negotiation. No matter what you do, the onus is on you to guess correctly the numbers on the employer's sheet. That's why saying the first number is bad when you're negotiating with a more knowledgeable opponent. If you've had a lot of success with the "anchoring" method, it's likely because you're not coming close to the upper bound of the pay range that your employers had pre-determined for their positions.
there 18y ago
bold tags: just say no
time_management 18y ago
When I left finance, I hid my pay for the opposite reason of most people. I knew that most tech companies wouldn't match the absurd compensation I'd earned at a hedge fund, so there was no point in divulging it. I'd never say, though, that I refuse to divulge pay based on a company policy. That makes the position seem weak. "I'm not telling you, because I'm not allowed." I'd make it clear that I'm not divulging it because I don't want to, and any company that wouldn't respect that desire on my part is a place where I wouldn't want to work.
davidu 18y ago
It's always wise to put a number out first. As an employer, I try to do that. As an employee, I've also always done that. It sets the dynamic and expectations. Obviously if it's crazy, it also provides an immediate opportunity to correct an unreasonable expectation.
- run4yourlives 18y ago
  Yeah, I've never understood all of this salary secrecy crap. Just tell them what you want to be paid! If it's way more than they can truly afford, at least you won't waste any more time. If you know what the market is paying and are comfortable with a particular wage, what the hell does it matter if you're under everyone else?
  - yummyfajitas 18y ago
    If an hour of negotiation gives you $5k more money per year, you just got (effectively) $5k for an hour of work.
    - run4yourlives 18y ago
      I'm not suggesting you don't negotiate. I'm suggesting you ask for that extra $5K up front.
comatose_kid 18y ago
Nick's Ask The Headhunter column was a great source of job hunting strategies when I first read him on EETimes (I think) back around 2001.
ig1 18y ago
The problem with this is that it's mainly a disadvantage to disclose your current salary if you're earning below market rates. If you're earning above market rates you want to disclose your salary both to show the company how much your previous employer values you and also to get you a higher salary at the new company. Hence the people who aren't disclosing their salary are implicitly informing the company that they're currently being paid below market rate. While it might not be true for everyone who refuses to disclose salary, it's true for a large enough percentage of applicants that it's safe to assume.
ghshephard 18y ago
I've been hiring in the valley for the last 12 years, starting off in the interview chain at Netscape in '96, and moving into management at my current organization in 2003. Since I moved into management, and end each interview chain (with a candidate that I am the hiring manager for, and have a candidate that I think we will bring on board), I have always ended the interview with three questions: Do we have your application filled out, When can you start, and "what did you make at your last company." "What did you make at your last company" is a valid question, and I know of no employer (at a Silicon Valley Company) that has instructed their employees to _not_ tell future employers what they make. It is, of course, considered good taste not to discuss compensation (Stock or Salary) with coworkers - but it's remarkable that there aren't typically company policies against that. (There are exceptions, I'm sure) The thing is - you _need_ to color that answer. Don't just say "I made $150K/year as a Sysadmin at my prior company", it's fine to say "They were paying me $150K, but that was probably an outlier, and I'd be very comfortable making $115K." Or, "I was making $90K/year, but I'm looking to make $115K at my next engagement" - You probably know (through salary.com, your colleagues at other companies, etc..) what the market will pay for your skills - and that is the number you need to communicate during the interview, what you are _worth_. It is as destructive and harmful to a career to be paid more than you are worth, than it is to be paid less than you are worth. The employees being overpaid are always the very first ones to be laid off, while their less skilled, but more appropriately compensated colleagues, are kept on. And, when you aren't being laid off, if you aren't delivering to your compensation level - you are never receiving positive performance reviews - even if you are performing at a much higher level than someone less well compensated - makes for a stressful work environment. (There is more to a job than money.) Speaking only for myself, any candidate who starts going down the road of "I won't fill out employment application until we are interested in each other", "I won't discuss previous salary", "I won't provide references until there is an offer letter", etc... - just screams "Prima Donna" That strategy might work if you are a very strategic hire, with very specialized skills, in a very tight job market - but in general, life is too short to have to manage those type of personalities, and I'd rather just take a pass and bring on someone who is willing to work _with_ me, and not _against_ me.
- Locke 18y ago
  I'm not sure your post deserves to be downmodded -- it seems honest and on topic. I can see how one bit in particular could come off as slightly offensive: 'Speaking only for myself, any candidate who starts going down the road of "I won't fill out employment application until we are interested in each other", "I won't discuss previous salary", "I won't provide references until there is an offer letter", etc... - just screams "Prima Donna"' This is a matter of trust. Salary history, a detailed employment history, and references are private. In the case of references it would be down right rude, to repay the people who are willing to vouch for you by spamming their contact info to anyone who asks. There is nothing unreasonable about withholding that info until both sides clearly serious about moving forward. If anything, I wonder what your cavalier attitude screams about you?
bhc3 18y ago
The concept here is great. But if those people laid off from Sun Micro and other companies divulge past salary in a tight job market, are they more likely to get a job over those who don't?
raganwald 18y ago
http://weblog.raganwald.com/2006/08/three-tips-for-getting-job-through.html http://weblog.raganwald.com/2006/08/three-tips-for-getting-j... What a hypocrite! When he's interviewing, he asks for salary history. When you're interviewing him, he just says no.

45 points by prakash 18y ago

What a bizarre concept. Both HR and the applicant should have done market research and come to similar conclusions about the appropriate salary range. If the applicant is qualified, what on earth does it matter if he was lowballed by his previous employer? Similarly, if the applicant did his research properly and is still applying for the job, clearly he is indicating that he is prepared to take a pay cut. Also, the self-righteousness of claiming "privileged information" is patently absurd. I'll tell anyone who asks what I make. More transparency gives power to employees. Companies want you to keep your salary a secret for their own reasons.

tptacek 18y ago
Because: (a) HR's job is to hire you for the lowest possible price. (b) By telling them your previous salary, you've conceded a great deal of information about what your negotiating floor is. Two very basic rules of salary negotiation, which process could not be further from market research: * Don't name a number first (whatever number you give is the highest number that will occur during negotiation, even if their range went higher). * Don't give up your "invoice price" --- the cost for them to move from your previous job without you taking a pay cut, or, worse, if you're unemployed, the price at which you'll think they're still doing you a favor.
- jbarciauskas 18y ago
  I don't disagree that HR's job is to hire you for the lowest possible price. However, I see the information you concede as largely irrelevant if you are knowledgeable about the state of the market. As in stocks, past prices don't matter, only what someone else will pay right now.
  - tptacek 18y ago
    Two bad things that can happen to you if you give up your salary history, even if both parties are rational: (1) You can convince HR that it's not worth negotiating with you because your salary demands will end up too high. (2) You can convince HR that it's worth lowballing you and then waiting you out as long as possible because your salary history demonstrates your negotiating floor is much lower than you think it is. It's that simple. Of course, you don't have to take a crappy offer, but part of the point of salary negotiation is not to get crappy offers.
    - run4yourlives 18y ago
      > You can convince HR that it's not worth negotiating with you because your salary demands will end up too high. Why would you want to work somewhere for less than you've earned in the past?
      - tptacek 18y ago
        Because you might be desperate.
        run4yourlives 18y ago
        If the opposing party in a negotiation knows you're desperate, you'll never win.
        tptacek 18y ago
        And a good way to imply that you're desperate is to give them lots of details about where you were working, when you were working, and how much you were making.
      - shiranaihito 18y ago
        On the other hand, why would you want to work for just as much as you've earned in the past?
- Locke 18y ago
  You're first point strikes me as incredibly jaded. That may be the case at poorly run companies, but hasn't been my experience. As in most business relationships, the goal is not to screw the other party. The goal is to arrive at a win-win, where both sides can be happy. Let's look at what I can expect if I screw someone over with the lowest possible salary: * An employee who can justify doing the bare minimum it takes to get the job done, because after all, he's being paid the bare minimum * Low morale. Can I not expect the individual to bitch about how poorly the company treats its employees? * High turnover / no loyalty. How much money am I going to waste bringing people up to speed, only to see them hop to the next job as soon as possible? How can I expect to retain valuable employees when I don't treat them as valuable from the start? It's a poorly run business that screws over it's employees, customers, and / or partners just because it can. I like to think most good business people recognize that that sort of approach does not yield the best results over the long term. Frankly, I have no concerns about revealing salary requirements or providing salary history. If a company doesn't treat me fairly during negotiations that's a huge signal that it's not the sort of company I want to work for.
  - tptacek 18y ago
    I agree with all of the things you've just said in principle, but none of them apply in the real world. A company that loudly embraced just one of those bullet points you just gave would top the "best places to work" lists. The problem isn't top-down corporate strategy; it's the concept of HR departments. When you: * establish an entire business unit apart from the real work of a company, * give it a mandate to meddle in the affairs of every other business unit in the company, and then * measure its performance in raw numbers, you get the systemic inefficiency almost every large company sees. It's not the people or their ideas that are messed up, it's the system. However, apart from all that --- if you think what I'm saying is "jaded", try being a vendor to large companies sometime. Prospective employees deal with HR. Vendors deal with Purchasing. At least HR tries to pretend to be nice to you. Purchasing departments (for consultants, or for products) are overtly intended to screw you. Finally, this isn't about whether you feel like you're being treated fairly. It's about whether you're best representing your interests during negotiation. The idea is not to lose leverage by conceding an advantage in information to your counterparty. An HR person would be fired if they revealed the salary history of the last 20 people hired into your group in the company. Under no circumstances would a company ever reveal that kind of information. But you concede it willingly. Why?

geuis 18y ago

could the author have used bold any more?

snowbird122 18y ago

This comes down to negotiation theory. Is it better to make the first offer, or wait for the other person to make the first offer? I used to think "The first person to mention a number loses", but after taking a negotiations class and applying some of the concepts, I learned the power of anchoring the negotiation by mentioning the first number. After the first number is mentioned, you are now negotiating around that range. This has proven to be very effective for me.

fugue88 18y ago
I've read that way the number is stated also affects the range. For example, 100 has a large negotiating range than 90, and 90 larger than 92. I haven't had a change to use this yet, though....
- snowbird122 18y ago
  I haven't thought about that, but it definitely makes sense. Do you have a source on that?
  - notaddicted 18y ago
    I remember reading that as well. Here is what Google turned up: http://www3.interscience.wiley.com/journal/119410422/abstract?CRETRY=1&SRETRY=0 http://www3.interscience.wiley.com/journal/119410422/abstrac... EDIT: information wants to be free etc. http://drop.io/precision_of_the_anchor_etc http://drop.io/precision_of_the_anchor_etc
timr 18y ago
You can't "anchor" a corporation. It doesn't have feelings or emotions -- it has a big table of pay ranges for people with X years of experience and/or education. Your strategy works if you name a "negotiable" number that is higher than what you really want to make, but near the employer's upper bound for the position. Guess right, and you'll be negotiated down to a number that is mutually acceptable. Guess too low, and you'll be under-paid. Guess too high, and you'll be bounced without further negotiation. No matter what you do, the onus is on you to guess correctly the numbers on the employer's sheet. That's why saying the first number is bad when you're negotiating with a more knowledgeable opponent. If you've had a lot of success with the "anchoring" method, it's likely because you're not coming close to the upper bound of the pay range that your employers had pre-determined for their positions.

there 18y ago

bold tags: just say no

time_management 18y ago

When I left finance, I hid my pay for the opposite reason of most people. I knew that most tech companies wouldn't match the absurd compensation I'd earned at a hedge fund, so there was no point in divulging it. I'd never say, though, that I refuse to divulge pay based on a company policy. That makes the position seem weak. "I'm not telling you, because I'm not allowed." I'd make it clear that I'm not divulging it because I don't want to, and any company that wouldn't respect that desire on my part is a place where I wouldn't want to work.

davidu 18y ago

It's always wise to put a number out first. As an employer, I try to do that. As an employee, I've also always done that. It sets the dynamic and expectations. Obviously if it's crazy, it also provides an immediate opportunity to correct an unreasonable expectation.

run4yourlives 18y ago
Yeah, I've never understood all of this salary secrecy crap. Just tell them what you want to be paid! If it's way more than they can truly afford, at least you won't waste any more time. If you know what the market is paying and are comfortable with a particular wage, what the hell does it matter if you're under everyone else?
- yummyfajitas 18y ago
  If an hour of negotiation gives you $5k more money per year, you just got (effectively) $5k for an hour of work.
  - run4yourlives 18y ago
    I'm not suggesting you don't negotiate. I'm suggesting you ask for that extra $5K up front.

comatose_kid 18y ago

Nick's Ask The Headhunter column was a great source of job hunting strategies when I first read him on EETimes (I think) back around 2001.

ig1 18y ago

The problem with this is that it's mainly a disadvantage to disclose your current salary if you're earning below market rates. If you're earning above market rates you want to disclose your salary both to show the company how much your previous employer values you and also to get you a higher salary at the new company. Hence the people who aren't disclosing their salary are implicitly informing the company that they're currently being paid below market rate. While it might not be true for everyone who refuses to disclose salary, it's true for a large enough percentage of applicants that it's safe to assume.

ghshephard 18y ago

I've been hiring in the valley for the last 12 years, starting off in the interview chain at Netscape in '96, and moving into management at my current organization in 2003. Since I moved into management, and end each interview chain (with a candidate that I am the hiring manager for, and have a candidate that I think we will bring on board), I have always ended the interview with three questions: Do we have your application filled out, When can you start, and "what did you make at your last company." "What did you make at your last company" is a valid question, and I know of no employer (at a Silicon Valley Company) that has instructed their employees to _not_ tell future employers what they make. It is, of course, considered good taste not to discuss compensation (Stock or Salary) with coworkers - but it's remarkable that there aren't typically company policies against that. (There are exceptions, I'm sure) The thing is - you _need_ to color that answer. Don't just say "I made $150K/year as a Sysadmin at my prior company", it's fine to say "They were paying me $150K, but that was probably an outlier, and I'd be very comfortable making $115K." Or, "I was making $90K/year, but I'm looking to make $115K at my next engagement" - You probably know (through salary.com, your colleagues at other companies, etc..) what the market will pay for your skills - and that is the number you need to communicate during the interview, what you are _worth_. It is as destructive and harmful to a career to be paid more than you are worth, than it is to be paid less than you are worth. The employees being overpaid are always the very first ones to be laid off, while their less skilled, but more appropriately compensated colleagues, are kept on. And, when you aren't being laid off, if you aren't delivering to your compensation level - you are never receiving positive performance reviews - even if you are performing at a much higher level than someone less well compensated - makes for a stressful work environment. (There is more to a job than money.) Speaking only for myself, any candidate who starts going down the road of "I won't fill out employment application until we are interested in each other", "I won't discuss previous salary", "I won't provide references until there is an offer letter", etc... - just screams "Prima Donna" That strategy might work if you are a very strategic hire, with very specialized skills, in a very tight job market - but in general, life is too short to have to manage those type of personalities, and I'd rather just take a pass and bring on someone who is willing to work _with_ me, and not _against_ me.

Locke 18y ago
I'm not sure your post deserves to be downmodded -- it seems honest and on topic. I can see how one bit in particular could come off as slightly offensive: 'Speaking only for myself, any candidate who starts going down the road of "I won't fill out employment application until we are interested in each other", "I won't discuss previous salary", "I won't provide references until there is an offer letter", etc... - just screams "Prima Donna"' This is a matter of trust. Salary history, a detailed employment history, and references are private. In the case of references it would be down right rude, to repay the people who are willing to vouch for you by spamming their contact info to anyone who asks. There is nothing unreasonable about withholding that info until both sides clearly serious about moving forward. If anything, I wonder what your cavalier attitude screams about you?

bhc3 18y ago

The concept here is great. But if those people laid off from Sun Micro and other companies divulge past salary in a tight job market, are they more likely to get a job over those who don't?

raganwald 18y ago

http://weblog.raganwald.com/2006/08/three-tips-for-getting-job-through.html http://weblog.raganwald.com/2006/08/three-tips-for-getting-j... What a hypocrite! When he's interviewing, he asks for salary history. When you're interviewing him, he just says no.