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HR professionals face challenges in determining pay for new hires as cities and states increasingly ban employers from inquiring about pay history, but job seekers like the new laws.
“Compensation is an important two-way conversation between an employer and a candidate or employee,” Scott Dobroski, community expert for jobs website Glassdoor, told Bloomberg BNA via email July 11.
When companies can’t ask about salary history, it’s important that human resources professionals and hiring managers focus on pay expectations based on factors such as the role, job responsibilities, skills, and experience, along with current market value, Dobroski said.
U.S. employees surveyed by Glassdoor have made their preference clear: They do not want to be asked about past pay. Glassdoor found that more than half (53 percent) of more than 2,200 surveyed workers believe employers shouldn’t ask candidates about their current or past salary history when negotiating a job offer. Moreover, significantly more women (60 percent) than men (48 percent) believe salary history questions shouldn’t be asked, according to the survey.
But employers shouldn’t fear they’ll lose all the tools at their disposal to determine salary, Kerry Chou, senior practice leader at HR association WorldatWork, told Bloomberg BNA July 11. Having a candidate’s prior salary information is not an “absolute requirement,” Chou said. Most companies are using candidates’ pay history as only one of many guides to where in a pay range an individual should fall, Chou said.
The debate is gaining traction as cities and states such as New York City, Philadelphia, San Francisco, Massachusetts, Delaware, and Oregon have passed laws to ban the salary question, with many being implemented over the next year or two.
“It’s certainly an issue that will remain on employers’ radar and should prompt them to reconsider certain questions, like the salary history question, in their own hiring practices,” Dobroski said. “In many cases, we’re already seeing smart employers doing away with asking the salary history question without regulation simply because it’s the right thing to do.”
Banning inquiries about salary history is one way these jurisdictions hope to close the gender wage gap, since research has shown that women often make less than their male counterparts straight out of college. “While employers may never intend to insert bias into the hiring process, their practices can do just that,” Dobroski noted.
What an employer may face by not having a candidate’s pay history is a longer salary negotiation because the company doesn’t know what the individual’s expectations are, Chou said. Although employers under salary bans are still allowed to ask candidates what they are looking for and what their salary expectations may be, some candidates may not be comfortable answering that question directly, he added.
Chou recommended that, to streamline compensation negotiations, companies provide as much information as they can about salary grades, ranges, and where individuals can typically expect to be placed within a salary range based on experience and other particulars. If the position is bonus- or incentive-eligible, then HR should also be clearly communicating those details as well, he said. “The more organizations share about what it takes in the company to get ahead from a salary standpoint, the better.”
This kind of transparency will not only improve the hiring process, it’s also important for companies that want to hire and retain top talent, Chou said. Candidates need a “realistic job preview” so they understand more or less what to expect. There shouldn’t be any big surprises, whether it pertains to job duties, such as work schedule or length of probation, or to what they are paid, Chou said.
A bait and switch just “leaves a sour taste in employees’ mouths, and some of your best or worst ambassadors are former employees,” Chou warned. “If you treat people right” and give them a realistic understanding of employment, then employers will find themselves with loyal workers and a better reputation, he said.
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