Why We Need to Change How We Discuss Salary Expectations

Whether you’re an employer hiring new talent or you’re an employee looking for a new job, I want to share my biggest pet peeve in the hiring process; discussing salary expectations and current pay in the first phone interview!

The money conversation happens too early in the interview process.

I’ve seen countless employers resort to using the ‘salary expectations’ question as a way to reduce their candidate pool and identify hirable talent.

Unfortunately, salary expectations and money have become part of the process to either qualify or disqualify a candidate.

Oftentimes, questions about pay will happen on the very first phone call and I believe this is detrimental to both the employer and employee.

Here’s why it causes problems: it perpetuates the gender wage gap.  Candidates don’t have access to the same salary data used by employers.  When asked to talk about money at the very beginning of the process, without any context of the role, responsibilities or pay philosophy of the organization, the candidate is often answering blindly and risks lowballing their potential earnings.

When candidates have to make blind decisions around their own pay they’re often left feeling frustrated and undervalued from the start.  This is not the best way to begin a future potential relationship.

The employer may ask about a candidates desired salary expectations (and hopefully not salary history) to try to understand if they can afford said candidate, but they employer doesn’t yet know what position the candidate could qualify for. It limits the scope of identifying the value of the candidate’s future contribution and instead puts a price tag on talent from the get-go.

So, why not invest in getting to know the culture of the organization as well as the qualifications and potential of the candidate before discussing money?

Employers will argue that interviewing is a huge investment of time, resources, and energy that takes away from meeting business goals and in part this is true – however, hiring is a part of business.

Investing in the best talent for your organization is priceless.

You can’t determine how qualified a candidate is to close a sales deal, save a failing customer relationship, or lead a team by asking what they want to earn.

Yes, employee’s are a cost to a business AND the right employee’s will contribute value well beyond the scope of what they are paid to deliver.

As an organization, if your pay philosophy is to pay candidates what they ask for in the first phone interview, how are you protecting yourself against unequal pay, gender gaps, and internal equity? How does a candidate know their potential career trajectory and growth if you’re not able to share how hiring, pay, merit reviews, and promotions are handled internally?

The money conversation should be based on all of the facts – from both the employee and employer – so both parties can make the best decision if and when a job offer is extended.

Like it or not, we are in a time where most candidates in technology, healthcare, and other growing fields have the pick of the litter when it comes to choosing their preferred employer.  Growing organizations’ biggest complaint is their ability to find and hire great talent.

How would the process change if you put your best foot forward and openly shared how you manage and pay talent, your company’s best asset?  How would that transform the interviews you are having?

Hiring great talent, paying them fairly and competitively from the beginning, will save businesses money in the long run.

Do you know the cost to the business of losing great talent, due to lack of growth, equal pay or career progression? The latest stats show the loss of one employee will cost a business 1.5 to 2x of the annual base salary to replace them.  

Employers and HR, it’s time for you to start creating transparency around your pay bands.

Employers:  Here are some alternative ways to identify top talent and discuss salary prior to the job offer stage:

  1. Create agreements and/or a process around hiring that’s adhered to by both hiring managers and People Operations. Agree to share with potential candidates the internal salary range for a position and/or agree to discuss salary expectations only after the 2nd or 3rd round of interviews, when the pool is narrowed based on qualifications, potential, background, expertise, and cultural fit.
  2. Create salary bands based on external market research for each of your positions or levels. Discuss pay band transparency with both internal employees as well as external candidates
  3. Train your leaders! Offer coaching and training to new managers who will be interviewing and making pay decisions. Train your leaders on your performance review process. Create an internal feedback system for interviewing and performance that can be duplicated for each employee.

Employees, don’t feel obligated to state your current salary or salary expectations when you are interviewing for a new role.

Employees:  Here are some alternative ways to talk about money with a future potential employer:

  1. Don’t feel obligated to answer questions around your pay history or salary expectations in the first round of interviews. You can deflect and ask to obtain further information about the role you may be hired into. Ask for time to do some research.
  2. Your current salary is irrelevant to your earning potential in the market. It is possible to receive 10%-70% raises by joining a new organization, especially if you are currently underpaid. Your goal is to align your new salary to the role, expectations, and qualifications of the new position. Let go of any self-limiting beliefs that a $30,000 increase is “too much”!
  3. If you’ve done your market research and you know you’re ready to earn $100,000-$120,000 in your next role – let the employer know. Be clear about what you are looking for up front so you can have a candid conversation with the employer about the range they pay for someone like you in a role with responsibilities of XYZ. Determine if they can afford you.

Let’s start having some frank conversations about when it’s appropriate to talk about money.

No matter what “side” you’re on, let’s start having some frank conversations about when it’s appropriate to talk about money.  After all, we are all employees at the end of the day!

I want to hear from you!

As a candidate, what challenges do you face talking about pay with a potential new employer?

If you’re on the hiring talent side, what challenges are you currently facing to attract and hire the best talent?

Let me know in the comments below!