What is Your Current Salary?
If it was up to me, I would have everyone respond indignantly—None of your %^%#(& business!
However, that does not work in our current work environment.
So, how should you answer the question, “What is your current salary?”
Note: I originally wrote this post in August of 2014. It was updated in November 2017.
I have a client who, just the other day, was asked this by a recruiter. It was the beginning of a series of interviews or, as I call it, she was going to run the gauntlet.
My client very politely said it was early in the process and that she would discuss salary later. It was all about total compensation, benefits, yadda, yadda, yadda. Pretty standard response.
The recruiter persisted in wanting to know. She finally said, “We need to know whether we can afford you. What is your current salary?”
My client broke down and told her, but added twenty thousand. It turns out that this was in her range.
I told my client I would have turned it around.
Oh, you want to know whether you can afford me? What have you budgeted for this position and I can tell you whether you are within my range?
Make them give you a number!
Can They Ask? Really?
The world is shifting as it relates to pay and pay equity. The states of New York and Massachusetts have passed laws that ban employers from asking the ‘What is your current salary’ question. Several cities in the United States are following their lead but this is being challenged in the courts. You might want to check on the following articles that discuss this issue:
- ‘What’s your salary?’ becomes a no-no in job interviews
- Cities are finally banning employers from asking everyone’s least-favorite interview question
The answer for now is, yes, they can ask but that does not mean you have to answer.
What Are You Worth?
Recently, I wrote in a post called Managing Your Career is Like Selling a Vintage Fiat that a car is worth what someone else is willing to pay. Plus, you only need one buyer!
You are worth what a company is willing to pay you. That amount has nothing to do with your current salary. This is particularly true if you have worked for the same company for 5 or more years.
Over the last 5 years, pay increases have been almost nonexistent. Often the only way you will get a significant pay increase will be to change companies. Therefore, if you have been in your job for 5 or more years, your current salary is irrelevant to what you are worth in the current job market.
Salaries can vary a lot based on location. Living in Austin, Texas I have had many discussions with Californians moving to Austin. They needed to understand that, if you move from San Jose to Austin, the salaries and cost of living will both be a lot lower.
The amount of public information on salaries has exploded in recent years. What has changed is our willingness to share what we make on social media sites. Check out the following:
In today’s work environment, it is perfectly acceptable to ask what someone makes. This is a big departure from when I started working in the 1970s where it was both taboo and could be a fire-able offense to disclose your salary. In fact, a few companies are making all of their salaries public. This practice is becoming more and more common.
It is alright to ask colleagues at competing companies about what they make. Yes, most will tell you and they will want you to share what you are making.
Determine a fair salary range that you would be willing to accept.
Salary is Not Everything!
What else do you want? You will need to determine how much Paid Time Off (PTO) you want. How much are you paying for health insurance and is your spouse currently covered by your plan?
Health insurance has become a huge issue this year. You need to understand what you can purchase on the open market for your family because there is no guarantee that the new employer will cover your spouse and children with their plan?
Check out the following article titled I have heard that because of Obamacare, employers have been dropping spouses from their plans. Is this true?
You need to carefully evaluate what is covered by the employer’s health insurance plan. It could be a major factor in your compensation.
Does Gender Matter?
According to the Harvard Business Review article Why Banning Questions About Salary History May Not Improve Pay Equity, yes it does.
The author writes:
- People react negatively when women negotiate for higher pay. We know from numerous studies that women face a “social cost” that men do not when they initiate salary negotiations, regardless of the gender of the person with which they’re negotiating. By not disclosing their salary, the women in our study may have signaled to a potential employer that they were intent on negotiating — and were punished for it. Women, it seems, may be penalized for sending this signal, while men are not.
- Employers may assume women who refuse to disclose pay earn less. Whether it’s conscious or not, employers may be jumping to conclusions about a woman’s salary when she declines to reveal it. The fact that a pay gap still exists for women is well documented; most hiring managers are likely aware of this issue. Does the gender of the candidate refusing to disclose pay, then, affect an employer’s perception of what that candidate is likely paid (i.e. that a woman likely has a low salary)? In the absence of information, what information is being assumed?
In our study, both male and female refusers tended to earn more in their current jobs than the candidates who revealed their salary history, regardless of whether they were asked or volunteered the information. What an employer didn’t know, in this case, potentially hurt some of our respondents, as offers made to these women were less than those made to women who disclosed salary.
Is There Research to Back This Up?
Yes, there is. The author continues on to say:
There is a lot more research to be done on this topic area at PayScale, but in the meantime, it’s clear that asking salary history is having a negative impact on female job candidates, just in a different way than was previously believed. In addition, it’s worth remembering that there’s likely a double standard taking place with any salary history request: When employers ask about past pay, they’re asking for a level of transparency from the candidate that they’re often unwilling to meet themselves. Try asking a group of recruiters or hiring managers whether they’d consider including salary ranges in their job postings. I expect you’d be met with an awkward silence.
There is a social cost for women who do not disclose their current salary. Even so, I still do not recommend disclosing this information.
So What is Your Current Salary?
If they insist on knowing your current salary, you can say,
“I am looking for $xxxx in salary, but I will be evaluating the entire compensation package, which includes salary, bonus, and benefits.
Do not tell them your current salary, but what you want to be paid!