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Salary History

Joined
6/6/08
Messages
1,194
Points
58
Okay, so here's my conundrum:

My first position was a hire-at-will position for an entry-level position at a small trading firm that paid a very entry-level salary (about half of the average of a Baruch MFE grad). Now, a silicon valley firm that wants to interview me in San Francisco gives me that exact salary+$2000, but with at most a 10% bonus. And now I see why they wanted to know my salary history.

This makes me remember what my favorite professor posted about kids graduating in bad times getting crap salaries...so here's my question:

Considering that I know that it's an employer's market, and odds are, employers don't want to come across as complete Ebenezers and not pay lower than what I previously got, but considering that what I previously got was a pittance...

How exactly do I get some form of leeway in terms of bumping up this number if people ask for my salary history? I don't want to be working for a pittance all my life, and if I make a pittance on my first couple of jobs, then the next employer will simply marginally increase said pittance. That's not exactly ideal for someone who wants to start a family in a decade.

So...employer's market, I want more money, yes I realize it's an opportunity to "prove myself", but if you have a small company more interested in getting as much work out of you as possible while paying as little as possible in terms of both salary, and the attention you receive from higher ups...how exactly do I get more power on my end on the negotiating table?
 
Cost of living is much higher in Cali. Don't forget to take that into account and use it as a bargaining chip. From what I had heard last something like 20%.

Try n sell all your strengths and justify a higher salary that way (easier said than done). From what I have seen, companies do pay you based on your previous salary even though they may have more in their budget. Try adding to your skills and keep doing this while looking for a job.

Was your starting salary just for a trial basis and was there a promise of more after a short tenure?
 
Cost of living is much higher in Cali. Don't forget to take that into account and use it as a bargaining chip. From what I had heard last something like 20%.

Try n sell all your strengths and justify a higher salary that way (easier said than done). From what I have seen, companies do pay you based on your previous salary even though they may have more in their budget. Try adding to your skills and keep doing this while looking for a job.

Was your starting salary just for a trial basis and was there a promise of more after a short tenure?

I agree, relocation is usually a basis for extra pay, it usually apply to international relocation but the US is large enough that moving from Chicago to Cali will be treated the same.

Also, if you see they aren't moving too much in terms of pay see if they'll move in other terms, flexible hours etc.
That way you might be able to find something else while you're there/ work on personal projects / do unpaid internships on the side :P / do another degree part-time.

In general , unless its a great company that you will actually want to work in the long term I don't see a good reason to MOVE and get paid badly for it.
 
I agree, relocation is usually a basis for extra pay, it usually apply to international relocation but the US is large enough that moving from Chicago to Cali will be treated the same.

Also, if you see they aren't moving too much in terms of pay see if they'll move in other terms, flexible hours etc.
That way you might be able to find something else while you're there/ work on personal projects / do unpaid internships on the side :p / do another degree part-time.

In general , unless its a great company that you will actually want to work in the long term I don't see a good reason to MOVE and get paid badly for it.

Most financial firms (especially established boutiques and BB's) consider anything beyond a 60 mile move a relocation and provide relocation assistance.
 
I wouldn't answer that question, I would just say what I wanted to make and they can figure out what they want to offer. It's a trap, really and a mistake to answer; you do that and you're going to get a minimum offer every time. So, you have to decide if you're a price taker or not.
 
Things are apparently very different in the USA.

In my entire career, (having worked in a couple of different fields in two different continents), I have never been asked to provide evidence of my past salary, nor have I heard of such a thing asked of others.

While I realise that employment conditions are probably very tough and that beggars cannot always be choosers, this sounds like a losing situation to be in to me, as per joel_b 's earlier statements.
 
In my entire career, (having worked in a couple of different fields in two different continents), I have never been asked to provide evidence of my past salary, nor have I heard of such a thing asked of others.
Same, this is the first I've heard of such a thing.
 
I wouldn't answer that question, I would just say what I wanted to make and they can figure out what they want to offer. It's a trap, really and a mistake to answer; you do that and you're going to get a minimum offer every time. So, you have to decide if you're a price taker or not.

Well I already gave them my salary history since they said it'd be an auto-reject without it. Honestly though, since I have an interview upcoming with these people, let's just say I'll keep it close to the vest, but the idea is that if I relocate to Silicon Valley, there are a lot of other firms that would probably pay better once I get my bearings down.
 
Well I already gave them my salary history since they said it'd be an auto-reject without it

You were fooled :( Usually there is an appendix to your contract. This appendix contains some information about the situations when it's ok disclose your salary - something like "Only to the lawyer or government or similar" - it's written in better enlgish of course. It could be a lot wiser to send them this appendix and ask them why do they want you to break the existing contract? If you didn't have any you could ask your current firm for the rules in a print form when it's ok to disclose the salary and then send it.
 
You were fooled :( Usually there is an appendix to your contract. This appendix contains some information about the situations when it's ok disclose your salary - something like "Only to the lawyer or government or similar" - it's written in better enlgish of course. It could be a lot wiser to send them this appendix and ask them why do they want you to break the existing contract? If you didn't have any you could ask your current firm for the rules in a print form when it's ok to disclose the salary and then send it.
There is no current firm. He's unemployed atm.
 
It only works when you've made more at other places and you're looking for a more stable gig and take a pay cut, and try to get as much out of them as possible.

The internets is helpful with this: http://www.asktheheadhunter.com/faqsalary1.htm

Q "Divulging salary history"
I am in the process of looking for a new job. One of the things I frequently see in various advertisements is a request for salary history. I am hesitant to give out my salary history because I am looking for an increase in salary. Also, I am not sure how to include salary history. If I provide a prospective employer with this info, do I include it on my resume or in the cover letter?

A You've brought up one of the more serious flaws in the Employment System.
Employers have no business asking for your salary history. It's confidential. It has nothing to do with hiring you. Imagine what they'd say if you asked to see the history of salaries they've paid for this job over the past ten years. Or, if you were to ask the manager what his current salary is. Sorry, Mr. Manager, but what's good for the goose is good for the gander.

The excuse employers make is that your past salary helps them determine your experience level, it pegs your value, and it helps them establish a new salary for you.

Hogwash. By that logic, they don't need to interview you. All they need is your salary history and you're off to the races. By using the figures other employers have used, they'll know what their job is worth and what you are worth. And they'll win the lottery, too.

Salary is a judgment of value. It's incumbent on an employer to figure out what the job he wants done is worth, quite apart from who you are, what you've done, or what you've been paid before. In the interview, the employer factors in his judgment of how you would contribute to the success of that job. That's how an offer should be derived. It shouldn't matter what you were making at your last job, especially in a world where 17-year-olds who were earning five bucks an hour flipping burgers last year are earning $40k this year designing web pages, and where $100k executives are seeking $50k sales jobs.

Bottom line: when you divulge your salary history, you put yourself in a corner that's very difficult to negotiate your way out of.

Here are my suggestions about how to deal with the "salary history" problem.

Skip the classifieds.
The ads are the subtle beginning of an employer's effort to gain an edge in negotiations. If you're dealing with ads, you're made to believe that if you don't submit all the information that's requested, you won't even be considered for a job. And know what? That's true. How do you deal with this? Don't respond to the ad at all, because your resume and application essentially go to resume jail -- in some personnel jockey's drawer.

Don't be afraid of forms.
If you must fill out a form, list your salary as CONFIDENTIAL, to be discussed only with the hiring manager. (Alternately, cross out the "salary history" title on the form and replace it with "required salary range".) If a company insists on your salary history to determine where you'll fit, they should divulge your boss's salary so you'll know where you might "fit" in the future. (Funny how this logic works once you think about it.)

Deal with managers directly.
Ask The Headhunter is devoted to teaching people how to control the job search, not how to follow some administrator's "processing rules". If you're going to divulge your past salary at all, gain an edge in the process. There's nothing wrong with saying to a personnel rep, "My salary history is confidential, and I will discuss it only with the hiring manager." Could it jeopardize your chances? Sure. If you don't want to rely on "chance", don't talk to personnel jockeys.

Lead with your requirements.
What does your past salary matter if you won't accept an offer below $X? (Understand that this cuts both ways: you've got to be willing to figure out what your abilities are worth.) If you decide to divulge what you've earned in the past, do so by firmly stating that your current salary is one thing; your required salary range is another. This is how you level the playing field: by getting them to divulge the range they're willing to spend. If there's no agreement on the range, you probably don't want to interview. Don't feel you're "pricing yourself out" of the job by doing this. An employer knows what range she can pay; you're not going to materially change that by "avoiding the salary discussion until you can impress them".

There is no pussyfooting around on this subject: When you provide your salary history, you give up your negotiating leverage.

If this sounds extreme, consider how you're going to feel when you're offered less than you want and you've already spent hours of your time in interviews, and weeks waiting for an offer. It's a simple fact from the world of behavioral psychology: the more the employer puts you through, the more likely you are to rationalize accepting a low offer. (The phenomenon is referred to as "cognitive dissonance".)

Now let's get to what's really troubling you: all employers seem to require salary history at some point or other. How can you buck that? You stand up for what's right. To steal a little from Arlo Guthrie, imagine if 10 people a day refused to provide salary info. Then 50 people, then a thousand people a day, all challenging employers to figure out for themselves what a worker is worth before hiring them. The world will change.

Any company that rejects a good candidate because he or she refuses to divulge salarly history isn't a very smart company, and certainly not a competitive one.

You will clearly need to make a judgment about each situation as it arises. This need not be an adversarial approach: you'll find that many managers will respect your position if you present it candidly, then immediately turn the discussion to how you can help the company be more successful and profitable.

Making an issue of salary history does not require being rude or presumptuous. It requires that you be polite and firm.

But, don't be afraid to make an issue of it if it's important to you. It may cost you some opportunities, but you've got to draw a line for yourself.

Best wishes,
Nick Corcodilos
Ask The Headhunter
 
It only works when you've made more at other places and you're looking for a more stable gig and take a pay cut, and try to get as much out of them as possible.

The internets is helpful with this: http://www.asktheheadhunter.com/faqsalary1.htm

Theoretically, what this article says is true and I agree with it 1000%. But perhaps balking at such questions works for the privileged few (those not under a glass ceiling). In my years of work experience in the US, I've worked with headhunters and various HR personnel and have been on many types of interviews: no process can move forward without providing some salary information at some point, whether it's in the beginning or at the end. The tactics sound reasonable but for those who are job searching in this recession, I'm afraid his theory loses value because the companies hold the upper hand. Let's not forget that many quants are tethered by work permit restrictions so there is less flexibility to demand what is theoretically correct. I'm about to make a phone call to some bulge-bracket investment bank who wants to hire me for some other position I applied for - I'd like to see how they react when I ask what the hiring manager's salary is when they persist on knowing and I refuse to tell... I think I can kiss this one good-bye.
 
Agreed not all of it is feasible (i didn't read all the points), but that's what it comes down to: You have to decide your value and be prepared to walk away; providing any other information other than what you want to get paid gives away any power in negotiation.

If you have an inflated sense of value, or you think you should make 'what the market rate is for the role' maybe a self-evaluation is in order.

I realize it's a tough job market. However, I would suggest you would not be happy working for the type of company that asks for salary history to determine how little they can pay you to do the job. On the other hand if I had to bite the bullet and give salary history becuase I just needed a job, I wouldn't be surprised at what I was offerred either as I have clearly shown my hand.
 
Hi Ilya, do I understand right that they offer you a salary without even interviewing you yet? To say true I never heard anything like that before.
 
@IW: Yes, you understand absolutely correctly. Their HR person said "this is an entry level job, so the salary is $42,000" and when I asked about extra compensation for having an MS degree, I got more or less the same reply "entry level, salary's set, we can't do much about that", and on top of that, no relocation either.

From the look of it, they know it's an employer's market.
 
Looks like that is very tough market for the people without good experience now. I remember I got 43K while studying part time for my MFE on my first full time job (Market Risk Analyst position) back in 2005. If you really think this job can give you something good to put on your resume within a year and a half I would take it. But do not stay there for too long :)
 
Why do companies ask for salary history? I imagine it's because they are looking for the best balance between how strong a candidate is and how much they will have to pay.

In that case, wouldn't you be best served by letting them know early in the process what you consider an acceptable salary range? Otherwise everybody is just wasting their time.
 
When I was asked that question in interviews, I simply told them, you can get the numbers from my former employer, but don't base on that, I feel that I am under paid and that's why I am here interviewing with you. So let's talk how much I want and not how much I made.
 
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