Stop Asking About Salary History and Do This Instead
It's pretty clear that people who write laws prohibiting discussions about salary history don't know anything about hiring. If they did, they would write a law preventing companies from box-checking skills, experience, academics, and salary history, too. The reason: Asking these questions prevents companies from considering anyone with a different mix of skills and experiences from even being considered. This includes diverse talent, top-tier talent, military vets, non-traditional candidates, and high potential candidates who learn quickly.
As a general recruiting rule, it's always better to first discover if the person is competent and motivated before discussing salary. This way, you find out how talented the person is and if the open job meets the company's and the person's needs before discussing compensation. If the compensation doesn't match but the person is talented, the company will make the job bigger or find another job for the person, either now or in the future.
From a negotiating standpoint, if the job represents a true career opportunity, the salary range will become less important. For example, I just spoke with a "C-level" officer who was more than willing to take a 25 percent cut to get a job that didn't require her to be on the road 60 percent of the time. She also gave me referrals for two director level positions we were filling. These discussions would never have been possible if I asked about salary history first. When I was a full-time recruiter (for over 25 years), these types of discussions were daily occurrences.
So, while filtering on salary is both naïve and unnecessary, so is filtering on the "must-haves" criteria, either before meeting the person or in the first phone call. It doesn't take a lot of logic to convince smart hiring managers if you can prove a candidate can do the work and is motivated to do it, he/she has exactly the amount of skills, experiences, competencies, and education required.
This table provides the factors we've seen best predict on-the-job success. You can quickly validate these factors by completing this survey for a few people your company has recently hired. Then ask these two questions to assess each of the strong and essential factors shown in the table.
How Job Seekers Can Avoid the Compensation Trap
Sometimes candidates ask about the salary before they even know if the job represents a significant career opportunity. As a recruiter, when candidates ask me this question, I say the compensation doesn't matter if the job doesn't represent a true career move. Then I suggest we first determine if it does, and then we'll see if the compensation is a fit. Too many candidates miss the chance to have a career conversation by using some silly filter to even decide if the conversation is worthy.
On the flip side, when candidates are asked by the interviewer about their compensation requirements too soon, I urge them to say, "The compensation is less important than the career opportunity. Let's first see if it's a career opportunity, then we'll see if the compensation fits." Then ask the interviewer to describe real jobs and reverse engineer the two questions mentioned above.
No one needs to filter candidates on salary history or by a laundry list of skills and experiences. Prohibiting all of these factors would be a better law, since it would open up the talent pool to the truly qualified. You won't even need to filter out the unqualified since they'll self-select out if you simply ask interested candidates to write up a few paragraphs about what they've accomplished that best fits the performance requirements of the job.
While this is a different approach, I asked a top labor attorney from Littler (one of the top labor law firms in the U.S.) to validate it as part of my book, The Essential Guide for Hiring & Getting Hired. Here's a copy of his whitepaper, but his summary comments pretty much say it all:
By creating compelling job descriptions that are focused on key performance objectives, using advanced marketing and networking concepts to find top people, by adopting evidence-based interviewing techniques, and by integrating recruiting into the interviewing process, companies can attract better candidates and make better hiring decisions.
Because the Performance-based Hiring system does differ from traditional recruiting and hiring processes, questions arise as to whether employers can adopt Performance-based Hiring and still comply with the complex array of statutes, regulations, and common law principles that regulate the workplace. The answer is yes.