There was an article in last week’s Wall Street Journal about how high salaries haunt some job hunters and eliminate them before they barely get started interviewing. The article claimed that:

  • Human resources executives say that asking about pay right off the bat helps contain compensation costs, insures that candidates have reasonable expectations and spares recruiters chasing prospects they can’t afford.
  • Focusing on compensation history “holds down wages because now the jobs are being filled by people with lower salary expectations”… “We have a whole generation of people who are permanently adversely affected.”
  • Finance chiefs are probably looking ahead and saying they want to keep the escalation of labor costs from going up in a way that will put pressure on earnings.
  • Employers may feel they can lowball applicants because they believe there is still a surplus of qualified candidates.
  • Workers over 45 years old take a bigger hit than workers under 35 years old
  • Some employers hesitate to hire at far below a past salary, concerned that the employee would resent earning so much less. (…and therefore leave or look for another job with a higher salary.)

The conclusion of the article is that when job candidates are asked what they want to earn and then tell a perspective employer what their desire is, they get eliminated.

Unfortunately, what the article doesn’t tell the prospective job seeker is how to deal with this issue. Here are ways a job seeker can deal with this question and keep themselves in contention for the job.

  • When asked, “What kind of money are you looking for?”, don’t try to guess what’s on the mind of the interviewer. Answer the question by stating something like, “In my last position I was earning $XXXXX. I’m not as concerned about what the starting salary is as I’m concerned about the opportunity in my ability to perform. My experiences have been that if I give good service, the money is going to take care of itself.”
  • Don’t pay any attention to what a “published” salary might be. Just because an organization publishes a certain salary doesn’t mean they’re going to pay that.
  • Quit thinking that people are trying to “lowball” you are anybody else. When you deal from a defensive attitude like that you won’t negotiate very well.
  • Remember to communicate that money is the fourth or fifth reason that people work. The company, what they do, the people… all are a lot more important than just money.
  • Quit thinking that just because you’ve made a certain amount of money that you “owe it to yourself and your family to get an increase.” An increase may not be what the market will bear. A lateral move or even a step backwards in salary is common in today’s market.
  • Communicate as much as you can that you are “open” regarding money. You might even give an example like, “In the last two jobs that I’ve had I started out at a lower salary than what I had made before and I wound up getting salary advances because of my performance. Again, I’m not as concerned about the entry salary as I am about the company, the people and the opportunity. If all of those things work well, the money usually works itself out.”

It doesn’t take a mental giant to know that older employees, because they usually make higher salaries, are more likely to take less money in finding a new job than younger workers. But that’s not because they’re older, it’s because they have been making more money. A “younger” candidate making more money than a hiring organization might want to pay will have the same problem.

For a while, companies will try to “contain” salaries and earnings. But as candidates become harder to find and the job market gets better, these companies will have to pay more and increase starting salaries to compete for good candidates. It happens every time we come out of a recession.

A job seeker’s pay history may very well be a challenge to deal with. But if it’s handled the right way, it can become no more than a minor issue.