Companies Still Asking for Salary History During Interviews

PayScale’s annual Compensation Best Practices Report showed that the salary history question is still popular among hiring managers. Almost as many organizations said that they “always ask” candidates about prior pay as “never ask.”

Surprisingly, job level didn’t seem to matter, either: companies were about as likely to ask for salary history from individual contributors as executives or managers.

The key difference was that top-performing companies — those who met or exceeded their revenue goals and were No. 1 in their industry — were slightly more likely to report never asking about salary history.

That makes sense: top-performing orgs were also more likely to have completed a market study in the past year (56 percent vs. 51 percent of typical orgs). In other words, they had plenty of data to guide their pay decisions, and therefore less need to use other companies’ decisions to determine their offer.

So, what should you do if you're asked for salary history?

Unless you’re interviewing with an employer that’s banned the salary history question — or in a city or state that’s made it illegal — it’s best to be prepared to deal with it during a job interview. Whether that means answering or redirecting the conversation has a lot to do with who you are, and what kinds of bias you may be dealing with during the process.

For example, data gathered for PayScale’s report, Is Asking for Salary History … History?, found that women who decline to disclose their salary history earn 1.8 percent less than women who reveal it when asked. The opposite is true for men: playing their cards close to their vest will earn them 1.2 percent more than providing salary history information.

Why are women paid less when they make what should be the smarter move? Our study doesn’t provide definitive answers, but bias almost certainly has something to do with it. Other research has shown that women who ask for more during salary negotiations suffer a social penalty where men do not. It’s entirely possible that women who refuse to share information are perceived as “less nice” than those who reveal it.

Regardless of your gender, it’s important to go into salary negotiations knowing how much your skills are worth on the job market. Take PayScale’s Salary Survey and get a free salary report with a range based on your skills, experience, education and job title. Then, regardless of whether you choose to discuss your past salary, you’ll have a better idea of whether the current offer is fair.

This post originally appeared on Payscale.