By Barbara Mitchell
Q: What's the best way to determine a hiring salary to offer a candidate? I used to ask applicants for their salary history, but I'm hearing that some states and cities are making that illegal. What should we do to offer a fair but competitive salary?
A: It's too bad that it's taking legislation to change hiring-salary practices. Smart employers realize that asking what candidates were paid in previous jobs has kept some employees underpaid throughout their entire careers.
When you ask what candidates made in their last job, you're assuming that their previous employer paid a fair wage, which may or may not be true. What if that employer had a practice of underpaying women or minorities and you then perpetuate the unfairness by basing their new salary on that number?
There is a better way: Determine what the job is worth to your organization. You want to pay a fair wage to compete for the best talent, and you also need to maintain internal equity. That means you have to do some research.
Here are a couple of ways to gather data:
You want to pay a fair wage to compete for the best talent, and you also need to maintain internal equity. That means you have to do some research.
Once you determine what the position is worth in the marketplace and to your organization, don't neglect to review how that salary compares with what you pay current employees who do similar work. This ensures that your organization maintains internal pay equity.
Certainly, your final decision will depend on your salary budget, but it never makes sense to underpay employees, whether they are new or existing staff. If employees feel undervalued, you won't get their best work and you risk losing them.
When you offer a candidate the job, be sure to highlight your total compensation package, including benefits and perks like flexible schedules, which for some employees may offset a lower salary offer than they might get elsewhere. Make sure your entire package is competitive.
Bottom line: Don't ask for salary history. Pay what the job is worth to your organization.
Barbara Mitchell is a human resources and management consultant and author of The Big Book of HR and The Essential Workplace Conflict Handbook. Do you have a question you'd like her to answer in "Ask the Expert"? Send it to [email protected]
In "Create a Fair Salary Process by Ditching Salary Histories," published on asaecenter.org, learn about four factors you should consider to help close the pay gap and avoid discrimination in the recruitment process. (ASAE login required.)