Let’s face it. Most nonprofits are notorious for not paying high salaries in comparison to their for-profit peers. Recently, there’s been a movement, which has the support of some state legislatures to make it illegal for employers to ask for salary history.
Prospective employees also feel especially many in the nonprofit sector which is notorious for paying below market wages, that they lose any standing in any negotiations. Candidates also feel it’s an invasion of their privacy.
Why has salary history become an issue?
- Technology: Technology has created a situation where applicants are “forced” in online applications to reveal their pay history. In turn, employers have been able to screen out people based on that criteria alone–regardless if someone can do a job or not.
- Wage Gap: Studies have shown that women earn $0.80 to every $1.00 her male counterparts earn for the same job. And, between black people and white people, there is a gap in earnings of 26.7 percent. So, by asking for salary history of individuals who have been systematically earning lower wages than others, pay has become a matter of fairness, addressing systemic poverty and social justice.
On the flip side of the coin, there are valid reasons why employers ask about salary history, including the following:
- Affordability: One of the key reasons why many organizations ask for salary history is because hiring managers can learn if they can afford to hire someone.
- Benefits and Bonuses: Hiring managers can determine if the candidate they would like to hire received any additional financial benefits, such as monetary bonuses.
- Candidate success: In combination with the work history, a hiring manager can learn if a candidate was promoted, given more responsibilities and compensated.
So, how should you deal with salary negotiations in this new environment when candidates are less inclined to provide salary history, and state legislatures are changing laws that may prohibit employers from asking? How can you find the happy medium?
- Know the law. As a nonprofit or social enterprise business, make it a point to know the law in your state about whether or not you’re permitted to ask about salary history.
- Respect your candidates and workers. Realize as an employer, especially in the nonprofit sector, that many people have not earned what they should be earning. Candidates also see it as an invasion of their privacy. Remember that you want to strike a balance between your business needs and those of the candidates and your employees.
- Tweak technology. Don’t require applicants to list their salary history online even before you’ve considered their application. If you publicize a range, which you have for any job you’re posting, prospective candidates will apply or not if the salary range is acceptable to them.
- Stick to the range. Do your research. Know what other nonprofits in your area, and even across the country, are paying for similar positions. Here are some excellent salary surveys from PNP Staffing Group and The Bridgespan Group. Then, in all fairness to your organization and the candidates, be open and fair about the salary range.
- Be serious. Many times nonprofits begin salary discussions with prospective candidates asking for histories (assuming it’s legal in the state) before they have any real interest or desire in the candidate. Don’t bother. When you enter into salary negotiations, respect the candidate and be serious about their candidacy.
As more and more states make it illegal for organizations and businesses to ask about salary histories, you’ll get more pushback, even from candidates in states where asking for such information is legal. Don’t start off your relationship with prospective employees on the wrong foot. Take this delicate discussion seriously, remember how it annoys potential team members. Would you like someone asking you about how much you’ve made, particularly if they’re not that interested in you?
Ask for salary targets from candidates, which is open and fair game. Provide your salary range, so candidates know whether or not you’re even in the same ballpark. Remember that the Internet gives you power and knowledge. It also gives the same to prospective candidates. With a little research and mutual respect, salary negotiations don’t have to become a zero sum game.