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Salary history: to ask or not to ask?

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The question of salary history has long been a topic of disagreement between employers and their prospective employees. One party wants to know, while the other prefers not to tell. Both have what they consider to be valid reasons for their standpoints, and there’s little room for compromise. After all, either a number is revealed or not.

Recruiters argue knowing a candidate’s current or most recent salary helps set realistic expectations and speeds up the hiring process. It allows them to cut loose any candidate who’s pay will be outside of the company’s budget, while helping them put an attractive offer on the table for candidates they’re keen to secure.

Unfortunately for them, a recent Glassdoor survey of over 2,200 US workers found that 53% of workers believe employers should not ask candidates about their current or past salary when negotiating a job offer. They argue an offer should be based on current skills and market rate, and that offers based on salary history help perpetuate the gender wage gap.

While until recently the discussion had been taking place inside interview rooms, a current trend in the US sees the law getting involved. With an aim to narrow the gender pay gap, a number of states have made it illegal for employers to ask candidates about their salary history, with others considering to follow.

Hong Kong

It’s not uncommon for HR-related developments in the US to inspire practices in Asia. But Erica Chong, of counsel at Orrick, Herrington & Sutcliffe, Hong Kong, doesn’t expect that Hong Kong will be introducing similar legislation in the near future, if at all.

“Although asking for salary history could be one of the causes that contribute to perpetuating the gender pay gap, the gap in Hong Kong is attributed to a number of factors, including the occupations that men and women more commonly hold,” she told Human Resources. “A higher proportion of men work as managers and professionals and there is a higher proportion of female clerical workers.”

Looking at the equal pay issue that has motivated the US legislation, a spokesperson from BASF considered a company’s role in promoting equal pay by being transparent about their salary history – what they pay their employees.

“Transparency on salary history alone is not enough to ensure gender diversity,” she said. “A company must promote an inclusive culture which accepts and enhances the diversity in people, experience and capabilities, and embrace talents and abilities of all kinds both inside and outside the company.”

Benefits

While some of the US legislators have decided it’s in everyone’s best interest to ban the salary history question, Chong disagrees. “I do not see any benefits for employers if a blanket ban on salary history is put in place. Often employers will have their own salary scales for different job positions. The absence of candidates’ salary history will not cause employers to deviate from their usual salary scales,” she said.

She agreed with recruiters who argue that knowing the salary history of candidates gives an employer more flexibility in offering a competitive salary to attract good candidates. Chong added: “Moreover, it will save both the employer and the candidate a lot of time if the candidate’s current salary and the offered salary are far apart.”

ALSO READ: Women candidates get paid 1.8% less when they don’t reveal pay history

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