You’ve seen a job, your’e the perfect candidate and, the best bit is, the salary is some 20% higher than your current pay. So you apply. Then the employer (or recruiter) calls you up, and after a positive phone interview they ask: “What’s your current salary?”
What do you say? Do you have to disclose it? Will it put you in a weaker negotiating position? Don’t panic. Have a read below to understand your rights on answering this much-debated question…
It turns out that this is a rather polarising topic. With something so life-changing as salary on the line though, you’d be naive to expect anything less. While employees express a sense of caution in disclosing their salaries to potential employers, employers need to know if what they are looking to pay is fair and realistic.
This is where many job interviews can hit a stumbling block, as neither party wants to give themselves a ‘weak’ negotiating position.
It would be the easy way out to take one side of the debate and run with it. But here at Agency Central, we like to offer impartial, accurate and thorough information at all costs. This is why we’re going to bring you both perspectives (the employer and employee) via a two-part series.
This first piece will focus predominantly on the candidate’s perspective, but check out the employer’s point of view by following the link at the end of this article.
The candidate’s perspective on salary disclosure
There are many worries a candidate has when disclosing their salary to a potential employer. From knowing whether their current level of pay will scare away hiring managers, to making themselves vulnerable in the negotiation process, all of the key considerations for an applicant are listed below …
Many candidates believe that disclosing your salary can weaken your negotiating position.
How do I know my true worth to a company?
This is a tough question. There are many factors to take into account when considering a job, such as company size, career progression, development and training opportunities and, of course, earning potential.
Here’s some handy bullet points outlining ways in which you can assess your true value to a company:
- Map out your skills to see how closely they fit the job specification.
- Check how many of the ‘desirable but not essential’ skills you offer.
- Check to see if your qualifications not only match, but exceed what they require.
- Determine whether your past industry experience is applicable and advantageous.
The more boxes you can tick in these areas, the higher your worth is. If you’re ticking every box they’re asking for, or even going beyond, then you’re likely the strongest (or one of the strongest) candidates they’re interviewing. This puts you in a great negotiating position when it comes to salary demands.
However, it’s a widely accepted truth of the industry that people inflate their salaries when applying for jobs. Afterall, it’s the first and most obvious step to gaining that juicy payrise.
However, don’t get too cocky. Ironically, many companies see overqualified candidates as disadvantageous, because it usually means that they’ll have to pay the ‘big bucks’ for them. Instead, some companies will opt for a less experienced candidate and train them up.
This doesn’t mean you should undermine your worth though.
By effectively demonstrating what you can offer to a company, you’ll hopefully persuade them to pay a little extra for your services in favour of a less experienced candidate. The best way to do this is to show your talent, not tell it.
For example, don’t just say: ‘I can write engaging content that’s highly effective’.
Say: ‘I can write effective and engaging online content, as this article here demonstrates.’
Whatever skills you claim to have, ensure you back it up with some form of evidence.
An increase in salary is the primary reason many people change jobs.
The fear of weakening your negotiating position
First and foremost, many candidates feel vulnerable offering up what their current salary is to a new employer. It goes against every rule in the negotiating book. You wouldn’t walk into a used car dealer and tell them what your absolute maximum budget is, because you can bet your last pound that, if you do, you’ll probably end up paying it.
Lying about your salary in order to achieve more money from a new employer can backfire.
Instead, you aim to start low and reduce the price of the car as much as possible. This analogy works, but in reverse, for getting a job. As a candidate, you ideally want to start salary negotiations as high as possible, so that the onus is then on the employer to chip it down.
It must be said that this technique only works effectively if your experience and qualifications put you in a strong position to begin with. If you’re newly qualified and have less than a year or two experience in the role, then we’d advise not being overly ambitious with your demands.
Not only will this make you seem rather difficult to the employer, but it could price you on par with more experienced candidates – who will of course be the more favourable prospect.
Can a new employer check your previous salary?
Theoretically, a new employer could always calculate your previous salary from the P45 you give to them. Some simple maths would reveal what your annual income was. However, hopefully by this point, the interview went smoothly anyway. The employer’s more than happy that you’re the right person for the job, and are satisfied that they’re remunerating you fairly.
In addition to this, it is unlikely that your P45 will ever pass by the senior management team that interviewed / negotiated with you – therefore your P45 will likely only be seen by the HR department anyway.
Even so, it’s a widely accepted truth of the industry that many people inflate their salaries when applying for jobs. Afterall, it’s the first and most obvious step to gaining a juicy payrise, right?
Just because it’s a ‘done thing’ though, doesn’t mean it’s right. Lying about your salary in order to achieve more money from a new employer can backfire. In certain sectors for example, such as law or finance, there are stringent background checks involved – which can include looking into a candidate’s past employment in great detail. This could reveal things like your earnings.
And while honesty is a trait welcome in any sector, law and finance are two which are built on them – therefore lying about your salary in these circumstances certainly isn’t a good start.
Then there are sectors which are often measured in structures and bands, such as teaching or construction, so overinflating your salary here could also prove a risky move.
Other occupations, such as sales or marketing, which feature more freeform salary packages, can hinge on looser negotiations though. Basic salaries, commission structures and even company car levels can all be used as levers in the process of chasing the best package available to you.
What to say if a potential employer asks for your current salary
Not all employers will ask this but, for those that do, we’ve got you covered. There are all kinds of forums and advice out there on this question, but perhaps the best and most diplomatic one comes from Career Coach and Owner of Advantage Career Solutions, Richard Phillips.
In a recent interview with Monster, he talks about how to tackle such a question – both on application forms and face-to-face.
“Don’t offer salary history in an initial written application. If you’re filling out an application, put a dash in the box for salary history, indicating that you saw it. If you’re responding to a job posting that says to send in a CV and salary history, just send the CV.”
In his interview, Phillips continued to say what you should do once you are face-to-face:
“At this point, instead of telling the employer your current or past salary, ask what range they expect to pay for the position. You could also offer to provide your desired salary range.”
This response doesn’t always work favourably though. Some employers may be dissuaded from taking you further in the interview process due to your unwillingness to comply. However, Phillips notes that any organisation that does so is probably a company you don’t want to work for anyway.
He does have a point.
Summary
Ultimately, as a candidate, you’ve got to think about what salary would make you happy. Not one that you could merely ‘get by’ on, or one that’s significantly below the market value for your role, but one that will motivate you to work your hardest and give your best every day. Afterall, it’s only what your employer would want from you, and you would be doing yourself and them a disservice otherwise.
In the same breath, you need to remain realistic. Do your research. Find out what the going rate is for talent with similar skills and experience. Take into account your commuting costs, city / rural living and other lifestyle factors that play a part in your monthly finances. Only by doing this will you know what salary is best for you.