Effective May 23rd employers and recruiters in Philadelphia will no longer be allowed to ask prospective employees their current compensation. In January, Mayor Kenney signed into law the Wage Equity Law. The law was enacted to combat wage discrimination against women and minorities, a noble and worthwhile effort and cause. Debate remains as to whether this measure will have the desired effect.
As recruiters, we routinely inquire about jobseeker's compensation. In detail: Salary, benefits, bonuses (potential and achieved), stock/equity, tuition reimbursement and more. The industry paradigm has been that current compensation is ONE FACTOR in determining what a new employer might offer. We have seen a growing resistance by applicants to share this information. Employers continue to expect us to supply it.
From whence comes this resistance? This is a difficult and thorny subject with many nuances. I’ve polled recently my partners, other industry veterans, clients and candidates and this issue is so complex, fraught with many erroneous assumptions. It has also challenged me to examine long-held beliefs – which I am in the process of doing, but I am more uncertain, not less, having taken this deep dive. Organizing all this data into a cogent blog has proven difficult so I’ll share some widely held beliefs and try and provide editorial annotation where I can.
Many candidates express fears that companies are trying to hire them as cheaply as possible.
- This is generally not my experience. Most companies have a budget in mind, a value placed on a particular position.
- I would advise candidates not to accept a job with a company they feel operates in such a manner.
- “Good” firms want their new employees to be happy and want to accommodate them as much as practical.
Candidates and clients feel there is a ‘market rate’. They do research on Monster, Salary.com. Glassdoor, RHI etc.
- I have not found these surveys to be consistent nor accurate.
- In the professional world, it is very difficult to measure one’s own value based solely on the responsibilities of the position.
- This is one of the key disconnects and most difficult to discuss
- Years of experience are just not a good measure of someone’s abilities.
- Skill – How good and capable an individual is, is key to value determination. Looking at Software Developers – any two individuals may have the parallel years, even coming out of the same companies but may possess radically different analytical and coding abilities.
- Intelligence, dedication, work ethic, proactive nature, are all tangible factors, yet hard to measure. These are important determinants in the value that an employee brings to the firm
Companies, too, make different types of investment and provide other non-monetary values that need to be considered.
- Work-life balance
- Investment in their employees career or personal advancement
- Time off
- Flexible commute, work hours, job sharing
- Potential for advancement
NONE of these ideas explain nor excuse the widely held belief that future income is somehow based on current compensation.
- This has been a hard concept to shake after 30 years of recruiting and holding this belief close.
- It ‘made sense’ but I can’t really explain nor excuse; other than it is the way of the world.
- For many, mostly those who fall below the curve for their job title, this sticking point is offensive and heightens their fear that they’re being taken advantage of. My experience is that companies want to make a fair offer that creates parity with existing similarly skilled individuals.
- Rare is the example of someone who is highly compensated for their role refusing to release their income. Rarer still is the person who will say they are over compensated. Companies are more likely to stretch their budget if they have an understanding that a coveted potential employee is already earning over their budget.
- There is some truth to the standard that level of current compensation reflects the worker’s skills or accomplishments.
- The problem of diminished pay for women and minorities is real. Policies and actions must be in place to address this. If companies are honestly compensating on a skills/effort/ability scale then for these and other depressed/oppressed workers’ pay equity would be less of a problem.