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Why It’s Time to Stop Worrying What Candidates Are Earning

by Gavin Meacham on July 16, 2018 in Find Talent, IT Consultant


For years, employers have been far too reliant on asking about past compensation to quickly screen applicants in initial hiring discussions. Now, with the introduction of salary history bans across the nation, it’s time to develop a new approach to the topic.


Salary history bans have been a controversial move by local and state legislators attempting to eliminate pay discrimination. On average, women are earning 79 cents to a man’s dollar with Black and Latina women only making 63 cents and 54 cents, respectively. Some major players in the hiring world believe that the bans are a necessary step in the direction of closing the gender pay gap. Others fear it will leave them at a disadvantage in negotiations. Quite frankly, past salaries aren’t a great benchmark for setting compensation in the first place.


Salary History Doesn’t Matter

Asking for salary history is a flawed practice. Previous compensation shouldn’t be taken at face value as a candidate’s worth. Their past employer may have been unable to pay for additional performance. Maybe an applicant made significantly more in their previous position but didn’t get any benefits or vacation days. Also bear in mind that differences in industry and region can make a significant impact on salary and may not be comparable. Instead of using salary information to make assumptions, candidates should be able to share their back-story and give perspective employers the lowdown on what they’re looking for now.


Along with that, a candidate’s current salary has no bearing on what they can provide to a new organization. It shouldn’t have any control over what an employer is willing to offer for the role. Remember that the current market is extremely competitive, with talented professionals often receiving multiple offers. Thorough market research is essential, and insight from a staffing partner who is deeply familiar with the market will be crucial.  When companies make data-driven salary decisions based off of the current talent market, candidates are much more likely to be satisfied with their offer.


Shifting the Focus of Your Hiring

Hiring decisions should be made based off of aptitude and experience. Instead of looking primarily at what a candidate is earning, attention should shift to the skills they have and how applicable they are to the tasks at hand. Opposed to asking for a pay-stub, inquire about previous performance objectives or reviews to determine if they’re competent and motivated. Find out what drives these candidates and how their values and career goals align with your company.


Additionally, as the workforce evolves, one major consideration is improving work-life balance for employees. Many up-and-coming professionals prioritize more flexible schedules, easier commutes, and other benefits over a bump in pay. In fact, nearly 4 out of 5 employees say they would choose benefits or perks over a pay raise. Benefits like healthcare insurance and vacation time rank as the top favorites. Emphasize the appealing perks that set your company apart.


Why It’s Time to Stop Worrying What Candidates Are Earning

A recent study using data from the Gallup World Poll found that people are happiest when they make about $75,000 a year. Considering that talented professionals are often earning more than that, the most important factor that plays into workplace satisfaction is not pay, but the culture and values of an organization. Concentrate on what candidates can add to the company culture and what skills they can bring to the table. Compensation should take a backseat to the overall success of the organization instead of being a make-or-break influence on hiring decisions.


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