In reply I’d like to ask "What does my current salary have to do with the new job I'm applying for?"
Every employer knows the salary range for the role they’re recruiting and an applicant’s interview and experience will help to place them within that – surely that’s where the negotiation begins?
It’s clear from our recent Salary History Survey that it’s an unpopular practice that many would like to see stopped over here.
Pegging a candidates’ new salary to their previous salary has little rationale and yet it’s an accepted part of the recruitment process. It penalises candidates who have taken time out of the workplace and those who are moving from a less expensive city to a more expensive one.
It also means salary bias can follow an employee throughout their career. Not only this but it is also unhelpful if, like me, any potential employees are constantly making the jump between start-ups and blue-chip corporations. The salaries on offer between the two are so vastly different for similar jobs that the question of previous salary really is redundant.
Importantly for employers, it’s also a futile exercise. An article by CNBC reveals that a quarter of Europeans lie about their salary during job interviews and 40% of those who lied lifted their real salary by 15-20%.
This aside, the real issue with asking for your candidates’ current salary is that it silently undermines all your other diversity, equity and inclusion initiatives. When you base someone’s salary on their previous pay, you are inheriting gender, race and class gaps in pay from previous companies.
Why would an employer want to take on another employer’s salary biases? It simply makes no sense.
According to McKinsey, close to $8 billion is spent on diversity training per year (worldwide), including unconscious bias training. In contrast, stopping the practice of asking for salary history is easy to implement at very little cost to the company and more importantly, it works.
In the US, states where the salary history ban has been enacted have reported a 5-6% increase in pay has been seen for people moving jobs. But more importantly, the boost was larger for women (8-9%) and African-Americans (13-16%).
Organisations such as Salesforce, Amazon and Starbucks have also renounced this practice, employing other more comprehensive methods to set salaries. A recent research paper also suggests that teams that stop looking for salary history successfully hire more diverse personnel by considering a wider group of candidates.
Yet so many employers still ask about current salary and base their negotiations on this. This is why Fawcett East London has launched #BanSalaryHistory. We are campaigning to create an understanding of the negative impacts of this practice.
It is a small ask but it’s one that will go a long way in the fight for equal pay, it will also help to ensure employers don’t embed salary bias in their pay structures.
Shobaa Haridas, campaigner, Fawcett East London, a regional voluntary group campaigning to support the UK’s leading gender equality charity, The Fawcett Society