“The idea of having to craft a total rewards offer without salary history information can be daunting to some managers and employers. But when hiring managers and recruiters are educated and given reliable compensation data on market rates and pay ranges, the need for a candidate’s salary history diminishes,” said Sue Holloway, CCP, CECP, WorldatWork director of executive compensation strategy. “What we are seeing in practice is that actually eliminating the use of salary history isn’t as challenging as many feared it might be. Implementing a salary history ban requires strong change management direction from employers. It’s a significant shift in how many employers construct compensation offers, but it’s one that can be done.”
The survey of WorldatWork members found that 37% of employers have implemented a policy prohibiting hiring managers and recruiters from asking about a candidate’s salary history in all U.S. locations, regardless of whether a local law exists requiring this practice. 35% of employers reported prohibiting this practice only where laws are in place requiring it.
For those employers that have yet to implement a nationwide salary ban policy, 40% are somewhat likely or extremely likely to adopt a nationwide policy in the next 12 months.
“As more cities and states pass laws prohibiting employers from asking job candidates about salary history, more employers are adopting nationwide U.S. policies,” said Holloway. “I’d expect this trend to continue, especially as pressure builds for employers to justify their pay practices and ensure gender pay equity.”
One area in which salary history data may still be used is when internal candidates are being considered for new roles. The survey found that 73% of employers do not prohibit consideration of an internal candidate’s current pay for setting pay in a new role.
Additional findings:
- 84% of employers rely on salary history to asses a candidate’s salary expectations relative to internal pay levels.
- 80% of employers rely on salary history in determining an offer that is acceptable to the candidate.
- Salary history is not heavily used in assessing candidate qualifications and fit for a job.
The WorldatWork report, “Quick Survey on Salary History Bans (U.S.)” summarizes the results of a February 2018 survey of WorldatWork members gathering information to understand approaches organizations are taking to comply with new laws and the changing landscape of U.S. salary history bans. The survey closed on Feb. 16 with a final dataset of 838 responses.
