The Implications of Discussing Salary Requirements during an Interview

by Mark Szypko, CCP, GRP - August 5, 2016
Share this article:
Tweet about this on Twitter
Share on LinkedIn
Share on Facebook
Email this to someone

Interviews are an essential part of the hiring process. They give employers the chance to have far-reaching, insightful conversations with their job candidates about what they can bring to the company. In addition to talking about an individual’s education, experience, skills and ideas, the conversation will often turn to salary – and the interviewer must be prepared to have a meaningful, two-way conversation about the topic.

While asking a candidate about their salary requirements can be a sensitive subject, the goal should be to identify their expectations and understand how it aligns with the company’s compensation plans. Still, many employers ask more than just what the candidate is expecting, commonly inquiring about their current compensation.

However, this might not be the best move. Recently signed Massachusetts legislation goes beyond the Equal Pay Act (EPA) protections. Asking for an employee’s current pay will be against the law in Massachusetts once this new law goes into effect. The reasoning behind this provision is to ensure that gender pay inequities are not perpetuated in the marketplace.

In states where it is currently not unlawful to inquire about a candidate’s current salary, there are other reasons why you probably shouldn’t. First, there is the chance that the candidate might actually exaggerate their current or previous pay to land a bigger paycheck. Second, the danger in using this information to determine salary is that the candidate’s current or previous job could be different from the job they are applying for. Hence, you could end up paying for a position that you are not hiring for, or overpaying for the actual position.

Salary Requirements should Focus on Market Data

Instead, the focus should be on the job at hand and the value of that role to the organization. Recruiters, HR professionals, hiring managers, and candidates should understand what the job is worth in the market by accessing the tools that give them these insights. Understanding the value of the position will provide a better idea of the range you should offer and/or expect.

Now, if a highly qualified individual asks for more than what you’re willing to give them, this doesn’t mean the conversation needs to end there. Many factors go into the pay for an individual versus just the market rate such as experience, qualifications and past performance as well. Highlighting benefits beyond the salary, such as vacation time, employer match for 401(k) and other perks (that they might not receive at their current role) can help convince them to accept your offer. The focus should be on the total rewards package, not just the salary.

The interview provides the opportunity to ensure both parties are on the same page around compensation before going to the offer stage. But to be truly effective, interviewers need to be just as informed to ensure they’re not underpaying or overpaying their talent. The key to getting it right is leveraging benchmark data to ensure you know the market worth of each of your positions, and having a plan to compensate employees accordingly. By doing so, you can have meaningful, productive conversations around compensation that help you make the right offer to the best candidate.

Download Sample Compensation Philosophy:

Ready to get started with your own compensation philosophy?

Download a sample compensation philosophy statement to see how best-in-class organizations are tying their organizations’ goals back to their total rewards programs.

Copy and paste this HTML to share this article on your site:

Related Content