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I have been applying for a number of similar roles via third party / recruitment agencies and all of them have asked for my current salary - usually among their very first questions.

As I wanted to see their reaction, I tested a number of recruiting consultants by giving them different values of my current salary, but the same value of my target salary range. e.g. current: 50,000 OR 65,000 / target: 70-75,000.

Everything else equal (my achievements, the job role type I applied for), those whom I told I earned 50,000 tried to convince me in the most patronizing way that it would be absolutely impossible for me to make a jump to 75,000. They listed a number of arguments and spent a huge time of the conversation on salary. However, those whom I told I earned 65,000 didn't say anything at all.

So I would like to understand if - in general - regardless of whom I apply through (recruiter or directly) - must I assume that my target/final salary will always be calculated as a function of my previous salary?

Will achievements, value, etc. and industry value not override or trump that?

In essence, I am asking to understand how likely (common/frequent) it will be that I find a job that will not underpay me because my previous job did (with respect to the industry level salary).

P.S.: Thanks for the answers so far. Could someone please explain to me - if required, in a comment - how come (why) previous salary is so much more important than industry value or, for example, the advertised salary? Is there any justification to underpay someone?

P.P.S.: @jmac, thanks for your elaborate answer. The only point that I cannot relate to is where you equate achievements with skills. To clarify, I mean achievements in terms of business expansion and contribution to the bottom line. For example, I implemented ideas that significantly cut costs and also boosted profit/growth to far above our goals. Also note that my role has direct P&L ownership, and I don't work in IT as most in here I assume.

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Liahist
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    possible duplicate of Is it required to be exact about previous salary when dealing with recruiting agencies? – Garrison Neely May 08 '14 at 21:04
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    @Garrison, that question is about whether I have to be exact or not. This question is whether my previous salary will influence my future salary in general. – Liahist May 08 '14 at 21:08
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    @Liahist, if you log in to your account, you should be able to make your edits without having them accepted, and you should be able to comment on posts directly (instead of editing your question). Mind giving that a shot? It will make it easier for people to respond to you. – jmac May 09 '14 at 08:22
  • As for why it matters: there are many people recruiting, with many different plans and ideas, but I think aside from the "anchoring" effect, most commonly it's because most people hiring believe (1) most people applying, regardless of what they ask for, will gratefully accept about a 10-15% payrise assuming that other benefits and conditions break even. (2) most people are not more than 10-15% underpaid in their current role, or else they'd have quit it earlier, and so a jump of more than that indicates they may not really be qualified for the role no matter what their CV says... – Steve Jessop Feb 12 '16 at 10:55
  • ... obviously these are rules of thumb, and there are exceptions, but when hiring it does way less damage to your business to let good candidates go, than to hire bad ones. So if you're 33% underpaid then in effect, recruiters expect you to job-hop your way to the right salary rather than proving your value all in one interview. Your previous salary is a bit like a reference from your current employer, except that when it comes to setting salary your current employer has skin in the game and when writing references it doesn't. – Steve Jessop Feb 12 '16 at 11:01

5 Answers5

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Early on in my career I learned that the best possible answer when a recruiter asks me what I'm currently making is to tell them how much I want to be making.

I did a similar experiment nearly 20 years ago. At that time I was making around $45k and wanted to jump to $70k - I was seriously underpaid. First recruiter I gave the truth and he told me that the "going rate" for the position was $49k. For the second recruiter I told them I was making $60, and he told me the "going rate" (exact same job description mind you) was $64k.

For the last one I told them I was making $70 and wanted $80 but was willing to make a lateral move. I had a job offer two days later at $72.

I've posted this before, but salary has nothing at all to do with what you are making. It is a function of what you want, what the company is willing to pay and what the difference is between them.

Any manager worth their salt is going to try and talk you down. If they "know" what you're currently making then they'll try to make you agree to something just slightly over that. Why? Because they know that ultimately most people will move for a pittance over what they currently make and it's their job to keep costs down. Unless you happen to be somewhere near the top already at which point they'll try to get you at your current price.

Bear in mind that a recruiters first responsibility is to place you; that's how they get paid. It's far easier to do that when you have a lower salary.

I don't consider lying to a recruiter about this an "ethical" or "moral" issue in any way for the simple reason that what I agreed to take in payment for my time before has nothing at all to do with what I'll agree to now but yet, somehow, they'll use it against me.

NotMe
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  • This answer goes against the "never lie in an interview" rule. Are you sure that this hasn't cost you job positions in the past? I know most companies won't disclose what you use to make while working for them but you risk getting caught. Despite this I really want to try this out when moving to my next position instead of refusing to say. – CincinnatiProgrammer May 13 '14 at 17:06
  • @PaulBrown: The last time I filled out an actual application where I had to list my previous pay on a written piece of paper was when I applied to McDonalds. Since then the only thing that appears on my resume is who I worked for, when and what I did. The recruiter will ask for that information to help match potential jobs, but they won't submit salary history. They only submit your resume and rate. A recruiter will absolutely talk you down, again, to make it easier to place you. A manager will try and talk you down further to save money. – NotMe May 13 '14 at 17:15
  • this answer is so beautiful that whenever i read it i read it in a mirror upside-down, just so i can spend more time reading it. – bharal Jan 23 '15 at 00:54
  • "Any manager worth their salt is going to try and talk you down" While I mostly agree with the rest of your advice, no good manager will always try to talk candidates down on salary. They get a budget and are free to use that as they will to find the best employee that that money will buy. Some may have to talk candidates down if they have a hard number they can't go over. Some will offer much more if the candidate gave a low offer but is hitting all the right requirements. A manager's main job is to assemble a team of high-performing employees. Keeping costs down is secondary at best. – Lilienthal Apr 07 '16 at 06:07
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Yes, previous salary does matter regardless of skill.

  1. There is no magic bullet in determining value
  2. Previous salary indicates a concrete real-world value for your skills
  3. Achievements/skills suggest potential value to an employer

No Magic Bullet

There is absolutely nothing whatsoever that will automatically get you a higher salary offer. There are plenty of very talented athletes that end up getting less money (or shorter contracts) because of personality issues, plenty of very well-paid CEOs who have trouble finding comparable salaries, and people with great personality/connections who are unable to get a great salary because they are lacking in another area.

Every single aspect of your personality/career will be taken in to account when determining your next salary -- no one aspect trumps others. Some positions will regard certain aspects more highly than others, but there are very few positions in the world that will totally disregard available pieces of information when making a hiring decision.

Previous Salary

Previous salary is important because it is a quantitative indication of your value in a real-world situation. If you are otherwise a tremendous candidate, and everything suggests you should be a $70k performer, why were you only being paid $50k by your previous employer? There is no one answer to this question, but the prospective employer may ask themselves:

  1. Are they overstating their skills/achievements?
  2. Are they not producing work up to their potential?
  3. Are they poor at making their contributions visible?
  4. Are they held back because of a serious deficit in another area? etc.

When you get a significant pay increase, you are asking the person giving that pay increase to bet that you are worth the extra value. If your previous employer was unwilling to do that for even a fraction of the difference, why would the new employer be more willing to increase your salary dramatically on even less information?

Achievements/skills are Qualitative

We had a question the other day asking about making pretty CVs that stand out. If you click through to the templates, you will see graphs that look something like this:

 Photoshop   ●●●●●●●●●○  
 InDesign    ●●●○○○○○○○  
 Illustrator ●●●●●●○○○○

So what does that really mean? Does it mean that the person can do 90% of Photoshop work without any need to look anything up online? Does it mean that they can do 90% while looking at reference books/the net? Does it mean that they are in the top 10% of Photoshop users for expertise? (and what does that mean in reference to actual talent?)

Achievements are also difficult to evaluate. Let's say I'm a salesman. I put down on my resume, "Exceeded quota by 25% in 2 consecutive quarters" -- does this mean I was a particularly good salesperson? Maybe my industry grew faster than projections (resulting in better sales). Maybe my region exceeded projections. Maybe major customers decided to buy for tax purposes. That achievement does not necessarily mean that I can repeat that performance in the next job.

We can do all sorts of things to try to get a better idea of what a candidate's technical skills are, or how significant their achievements were, but at the end of the day it is can't tell me how valuable the employee is (an employee is more than the sum of their skills anyway). So based on skill and past achievements alone, it is very difficult to judge what an employee is actually worth.

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jmac
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The salary you'll get is a function of:

  • Your current salary
  • Your negotiation skills, and theirs
  • What they think you're worth
  • What they can afford
  • What you financially need (although typically not particularly applicable)

If the other points come into play to a significant enough extent, you can get a massive increase on your current salary, but your current salary would still affect it most of the time.

From the company's perspective - paying you more is generally done to keep you (financially) happy and as part of trying to prevent you from looking for another job. Getting a 20% increase should already do the keeping you happy part to a fair extent (that's a big increase) - motivating the addition 30% to get you from 50k to 75k would probably be a bit difficult (perhaps depending on what the market looks like). They can also give you bigger raises after you've proven your value in the company to get you up to your worth.

Keep in mind that perks and benefits also play a significant role when talking about a salary - some benefits have a direct monetary benefit, like contribution to medical and retirement, while one may have to do a bit of convincing to put a price tag on other benefits.

Your current salary is much less significant when moving to a different city or country, as average salaries can vary quite a bit between them.

Note - lying about your current salary, regardless of whether this is to the recruiter or the company, will most likely massively hurt your chances of getting hired if discovered.

Bernhard Barker
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    "Note - lying about your current salary, regardless of whether this is to the recruiter or the company, will most likely massively hurt your chances of getting hired if discovered." Instead of outright lying, you can just refuse to tell them what it is. It's really none of their business in the first place, as the market rate for 'Position X' is the same no matter what your previous salary was. – aroth May 08 '14 at 23:54
  • @aroth Straight-out refusing to tell a potential employer anything, regardless of whether or not it's their business (or you think it isn't), tends not to be the best idea. Although redirection can work to a fair extent. It's common practice to ask for payslips as proof of employment (and perhaps also salary) (in some countries?), so they may find out eventually anyway, unless you refuse that too, which they'll most likely find rather suspicious. – Bernhard Barker May 09 '14 at 15:18
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Assuming a recruiter gets paid a percentage of your first year's salary, this is a bad idea. I realize their clients (employers not employees) may want to factor this in, but these people are suppose to be good at sales. They should be steering their clients to focus on offering a competitive wage to attract the best candidates regardless of what someone was willing to accept as a salary.

Be honest about your current and expected salary. You like your job in spite of the salary and will leave if the pay is significantly higher. This is part of negotiating. Ask them why they feel a need to share your current salary with their client. If they tell you, "That's what the client wants." then ask them if they are a sales person or an order taker. Recruiters need to "churn" positions. What better way to do that than to provide higher salaries?

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must I assume that my target/final salary will always be calculated as a function of my previous salary?

No, there are a few exceptions that come to mind. First, if you change geography that may well change your future salary as you could be doing the same job yet the salaries would be quite different.

Secondly, if you change roles in a major way, e.g. Software Developer to IT Recruiter, that could also change your salary in a way that your previous salary isn't a factor in the new salary.

Third, if you are applying at start-ups, chances are your salary would be converted to part cash and part options which isn't directly a function of your current salary.

Will achievements, value, etc. and industry value not override or trump that?

They can though it is worth noting what kind of achievement you mean here. A Nobel prize would likely trump that I'd imagine. However, if you mean something less grand then perhaps not. The key is how well is this to be something that is rather rare within your industry to do that would enable you to be among .0001% of the population as for rather rare people exceptions may well be made.

JB King
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