“HOW MUCH MONEY DO YOU MAKE?”
If I was asked that question, I would probably respond with, “As much as I can but not nearly what I’m worth!” That answer would address my income as well as my value (with a little side-eye to my ego, of course!)
When looking to make a new hire, many clients ask how much money an applicant is currently making. Why this question receives so much weight from potential employers is confounding because the current salary is a reflection of what someone is CURRENTLY doing and for whom they are doing it.
There is no such thing as “All things being equal”– it’s more of a need to get to “apples to apples”. If someone is an applicant/candidate, they’re looking to make a change either because they’ve outgrown their current role, are looking to make more money, or have some compelling reason to move on from their current position, such as a “step-up” in title and responsibility. They’re moving away from their current position toward something they perceive will be better.
Asking the current compensation question is understandable because you want to know how the position and compensation being offered stacks up against the candidate’s current position. BUT it should be asked for informational purposes only along with other qualifying questions – and shouldn’t be used as the primary qualifier. Let me explain…
Sharing current compensation with a potential employer is important for calibration purposes because it makes no sense to waste everyone’s time if the compensation, on either side, is WAY out of range. However, judgment and bias can be the result. For example:
>If a candidate is making LESS than what is to be offered, the client may decide a candidate is under-qualified rather than just under-market.
>A decision could be made to shift to a “low ball” offer (see my previous blog “You Get What You Pay For”)
>If the candidate is making MORE than what is to be offered, the client may decide the candidate is over-qualified (and will get bored with the position) and make the mistake of “passing” on a potential top-notch hire.
>A client may infer that the candidate would be susceptible to “moving on” for more money and won’t be a long-term hire.
Remarkably, all of this can transpire WITHOUT EVER MEETING THE APPLICANT to explore in detail his or her qualifications, motivations and circumstances that led to the desire to make a change.
In other words, clients can be tempted to eliminate viable, talented, qualified candidates based on ASSUMPTIONS instead of FACTS. Either way, viewing current compensation information as anything other than one piece of a much larger, more complex puzzle can negatively impact the client’s initial impression.
Additionally, over-focusing on current compensation can throw up roadblocks to getting to the questions that really matter: Is this person qualified? Is this person interested? Are they open to your location? Are they a culture fit?
Laszlo Bock writes in his Inc. magazine article “Google’s HR Boss: Stop Asking Candidates About Their Current Salary”…
“By paying for the role, not the person, you start with a clean slate and mitigate any bias embedded within…prior compensation.”
Companies should make hiring decisions based on the role and finding a person who wants to do that role. Then make fair and honest offers that reflect the duties and responsibilities associated with the role. Taking this approach would not only assist in identifying and recruiting the top PERSON for the position but would be a step in the right direction in leveling the field and eliminating gender and other pay biases that currently exist.
My advice to companies? Take the proper steps now to ensure that when your current/potential employees are asked, “How much do you make?”, they can answer “Fair market value for what I do.”
That’s the best, and RIGHT, answer.