Women candidates get paid 1.8% less when they don't reveal pay history

PayScale, Inc has released its latest study - Is Salary History … History? The Truth about the Salary History Question where it provided deeper insights into the employer practice of asking job candidates about their salary history during the hiring process.

One of the key takeaways? A woman who declines to disclose her salary history when asked is paid 1.8% less than a woman who disclosed. However, a man who refuses to disclose his salary history is paid 1.2% more on average. The study commented: "Are women who refuse to disclose their salary penalized because they’re seen as unpleasant? And are men who refuse seen as confident?"

Even though laws have been passed to ban employers from asking this question, the research showed that it is still a relatively common practice with organisations.

Some other key findings from the study include:

• Only 23% of candidates refused to disclose their salary history when asked
• 43% of respondents were asked about salary history in job interviews
• HR professionals were most likely to provide the salary information if asked.
• Professionals in the finance and insurance industry were most likely to be asked.
• Workers in non-profit and educational organizations were least likely to be asked.
• Outside sales representatives were most likely to volunteer their pay history; with 22% volunteered their salary without being asked in comparison to the 6% of total respondents

Lydia Frank, vice president of content strategy, PayScale, said: “Many organisations ask about salary history to ensure a candidate isn’t considerably above range for a given position, but there are real dangers in using a previous pay number to determine a current offer.”

“The best way to set pay is to use market data and to ensure the offer is consistent with the company’s compensation philosophy and practices. In the long run, if compensation is misaligned with the talent market, the employer ends up with pay inequities that are not defensible, employees feel unfairly treated and talent retention becomes a critical problem,” she continued.

In the press release, Frank expressed the surprise that providing salary “doesn’t improve the odds of fair pay for women but, in fact, has a negative impact”.

She commented: “While we don’t know exactly why this is the case, other studies on unconscious bias show that women pay a ‘social cost’ when they advocate for themselves in negotiation situations, because it deviates from expected gender norms.”

“In this instance, managers or recruiters may be reacting differently when women and men refuse to disclose salary history when asked. It’s also possible that even when women keep a low pay number to themselves, they’re not asking for as much during the negotiation process as their male counterparts. Women should ensure they know the current market value of the position before starting any pay negotiation and take extra care not to let their previous salary negatively influence the monetary worth they place on their own skillset,” she concluded.

Lead Photo / 123RF

Infographic / PayScale