Does Your Salary History Really Matter to a Future Employer?

Posted by Kristina Cowan

Your salary history tells an important story of how far you've come along a career path, so it's fitting that a prospective employer might be interested in learning more about your past earnings. Yet it's unfair to take a salary history at face value, because there are so often back-stories that need explaining.

Career experts say you should be prepared to discuss your salary history with a prospective employer, along with any back-stories. For example, if you changed careers and took a pay cut in the process, you'll want to share that. Still you don't want to put yourself at a disadvantage, so it's important to tailor your approach to the circumstances.

Salary History: Irrelevant, Perhaps, But a Likely Topic During the Interview Process

Talking about your salary history probably won't be the highlight of interviewing for a new job, but you do need to be prepared to tackle it. Here are a few tips to help get you off to a graceful start.

Your salary history may be irrelevant, but don't be surprised if the topic arises.

Employers could ask about salary history, but it's often irrelevant because it doesn't relate to the job for which you're applying, the market value for the open position, or what the market will bear, says Barbara Safani, president of New York-based Career Solvers, a career-management firm. But if a prior salary was below market value, you should be prepared to explain—maybe your company was struggling and froze salary increases, or you made a career change and took a pay cut. "Whatever the reason, the job seeker needs to be able to explain past salaries but also articulate what they are looking to be paid in the future based on their current market value," Safani says.

Joyce Maynard, vice president of HR Xpress, a human-resources firm in Rhode Island, agrees. "What a candidate made before may or may not be relevant to the company or job they are applying for now. An interviewer will ask questions around salary history so the candidate has to be prepared to say, 'I expect that if there was a salary offer it would be based on the requirements of this job.'"

Be flexible, and don't forget important back-stories when it comes detailing your salary history.

It's common for employers to request salary history during the application process, says Laura DeCarlo, president of Career Directors International, a professional association in Melbourne, Fla. DeCarlo recommends adding a line to the end of a cover letter, such as, “During the last several years my compensation has grown into the mid-$80K range. However, I am currently negotiable.”

She points out another potential back-story behind a salary history: changing locations. If you moved from Boston to Florida, for instance, and your pay was nearly cut in half, you need to explain that. It's also important not to include starting and ending salaries for your past jobs, she notes, because that could limit you.

Focus on your competitive advantages when salary history is discussed.

Salary history comes up, says Dr. Rachelle J. Canter, author of “Make the Right Career Move: 28 Critical Insights and Strategies to Land Your Dream Job,” but it's best to focus on your competitive advantages (experience and skills that make you valuable) for the job, so "prepare a couple of relevant anecdotes that showcase these competitive advantages, and dazzle the interviewer. Make them want you to increase your leverage in salary and job responsibility negotiations."

• 7 Tips for Negotiating Your Salary in a Troubled Economy (PayScale for Yahoo)
• Good Example of How to Handle Salary Negotiations (Free Money Finance)
• Those Pesky Salary History Requests..... (The Career Channel)
• Advice on Salary Histories and Salary Requirements (The Career Doctor blog)
• How to Handle Salary Requirements When Applying for a Job (The Salary Reporter)
• Salary Negotiation in Tough Times: What Not to Do (The Salary Reporter)

Comments

[Holly]

I like your approach to dealing with this salary issue. I work for a staffing company, Hollister Staffing (www.hollisterstaff.com) and plan on sharing your advice with my clients and co-workers. I agree that the back stories are very important because this will help determine how you are paid if you are hired for the particular company. Salary is always a tough topic to talk about, and I think you're approach to handling it is great. Thanks!

[Dating Tips]

I agree with your post, however, many employers ask about salary history because past income has impacted the applicant's life style, thus, it is important to keep close salary level to be happy on the job and not look for another job. A guy I dated got laid off. It took him several months to get another job, although he got calls all the time; job interviews - several times a week. He was in a high income bracked, so not everyone could afford to hire him, yet they did not offer him $90,000/year knowing that a person who made $170,000/y for the past several years will simply not be able to meet his financial obligations that he has established.

[rng]

I recently left a career path that I was unhappy on. Although I'm willing and expecting a paycut in my career change, several companies have actually told me that b/c of my last salary, I am considered high risk.. I am still job searching. I understand why companies protect themselves, but I wish I'd been aware of this sooner.

[Megan]

In my opinion, salary history nor credit history are good indicators of a persons skill or ability to do a job. I too have changed jobs, I even owned a company for six years. Shamefully, I had to take the "owner" distinction off of my resume and put "manager" because of the prejudices against people with a high level of experience. Where did I get hired? I got hired where they didn't ask my salary past...I was a waitress. Yes, I made it being a waitress, same bills, same gas, same obligations. I had no other choice. Was it tough? You bet! But I did it. So this silliness about people being risks is just another way to be legally prejudiced. Lifestyles will adjust to the salary being made.

I have essentially over the last 10 years gone from making $35,000 to $120,000 to making $9,000. How can that be indicative of anything other than a crap economy?

I just got turned down for a receptionist position even though I had recent receptionist experience and had worked for a similar industry in the past. An internal candidate was chosen. I am currently in school earning my MBA, and got turned down for a part-time receptionist position, at the school I go to, in the school of management office.

When/if the economy picks up, this will change back to the way it was before, where they are glad to have good people, whom they will be willing to train. It's an employers market right now. This "be experienced but not too experienced, make us believe that you are going to stay forever, even though there is no human way to guarantee that" HR mentality is going to have to face reality some day.

[Janet]

This wouldn't apply when you want to leave a job when you feel you are grossly underpaid. It isn't acceptable to state your reasons you want to leave your current job is because they pay below market rate.

If I was a hiring manager for a sales position, it a candidate had low expectations from a salary standpoint or didn't counter offer something, I would have my doubts on whether this candidate is any good in sales. In that type of job, you have to be assertive and brave enough to get through the awkward times.

[Michael]

From what I have seen, offers have nothing to do with market rates, the position for which one is hired, or his/her performance. I have found that employers are willing to offer a bit more than a person is currently making instead of what they should be paying. So, if the market rate is $45K and I'm earning $35K now, then an employer may be willing to pay $40K-42K max (probably start with $38K). To get to the $45K, I would have to make 2-4 moves within the next 2 years!

[Hayli Morrison]

I think corporations should not hesitate to try to hire a person who previously made a higher salary. Maybe that person's financial obligations aren't so great, maybe they've been living beneath their means, and would be willing and able to take a step back salary-wise if the new employer held great promise for the future. On the converse, employers shouldn't hesitate to offer six-figure salaries to those who haven't reached that level yet. First time for everything - maybe that person is qualified, but hasn't been given the chance.

Hayli Morrison
Mktg. Comm. Specialist
hmorrison@risesmart.com
http://www.RiseSmart.com/jobs