When there’s a skills gap in your business, it will be costing you money every month. It will be reducing customer satisfaction or costing you sales or using up valuable extra time and money to outsource the work.
So you advertise to fill the role. It’s popular and several viable candidates come forward. One stands out as having the skills and she’s clearly motivated and capable. To secure someone like her is going to be costly, perhaps more than you thought, and yet you discover that her last role paid a lot less. You wonder if you misunderstood what such a skillset costs to attract. You can cut your offer, save a lot of money, and still, she’ll see a significant increase. If you do, and she accepts the role then everybody wins?
Well maybe not. What if she was being underpaid, her salary deliberately suppressed in her last role. In fact, do you even need to know salary history when choosing a new employee? This is one way that unconscious gender bias in the pay system can spread from bad employers to good.
When I work with businesses that are hiring we often speak about the roles and the key things that need to be in place when choosing a candidate. In my opinion, past salary isn’t one of them. it’s rarely a reliable indicator of skill or capability. A good candidate will always be able to evidence their results and the context in which they were obtained. Something else happens as well. When the candidate’s past salary isn’t the driver for offering the job, then the outputs, the results, (and the skills needed to produce them) matter more. The values and aims of the business also become more important to the candidate too. That is how everybody wins!
In America, several states now restrict the rights of employers to ask about salary history. There’s more information about that here… Is it time to do that in the UK?