Dilemma of the Month: Low Salary Expectations

Back Q&A Jul 12, 2018 By Suzanne Lucas
I’m a corporate recruiter. For candidates that progress to an HR phone screen, we ask their expected salary and share the range we have for the role. Is it appropriate to use someone’s low salary expectations as a reason for not moving forward? For example, I was recruiting for a mid-level management role, with compensation between $125,000-$150,000 per year. Many of the candidates had salary expectations within that range. However, a few candidates that seemed like a good fit only asked for around $85,000 per year. I’m concerned that a candidate who makes so much less won’t be a good fit. Is that the case?

As Americans, we don’t talk about our salaries. Basically, the only people who know how much we make are our bosses and our accountants — 20 percent of us don’t even share that information with our spouses.

Many companies see previous salary as an indication of a candidate’s true value. But why should you assume the previous company paid this person fairly?

This means it’s really, really hard for people to know how to gauge a fair salary. If you don’t even know the salary of the person with whom you’ve pledged to spend the rest of your life, can you really trust Glassdoor? Heaven knows online tools have been tremendously helpful at shedding light on mysterious salaries, but it’s still an area shrouded in darkness.

My point is that just because someone doesn’t make top dollar now doesn’t mean she’s being paid fairly. Unless the position is as a compensation specialist, it’s not this person’s job to know about salary market rates. Being paid below market rate doesn’t indicate her ability to do any other job.

Related: Dilemma of the Month: Retracting a Job Offer

Related: What to do when responsibilities come quick but compensation doesn’t

Recently, the Ninth Circuit Court of Appeals (which governs California) ruled that you can’t use salary history as a tool for determining current salary. Now, technically, you aren’t doing this — you’re using their desired salary as a tool for considering if you’ll continue meeting with them. But, the effect is the same. Someone who is currently earning $75,000 is unlikely to state she’s looking for a job at $50,000, just like someone who is currently earning $50,000 is unlikely to state she’s looking for $75,000. So, you punish candidates who currently have a lower salary by not considering them further.

Many companies operate this way — they see previous salary as an indication of a candidate’s true value. But why should you assume the previous company paid this person fairly? What if there was illegal discrimination going on in terms of race, gender, religion or pregnancy status, for instance? Because someone else behaved poorly, you’ve just rejected that candidate.

The real question you need to ask is: Can this person do this job? (And, incidentally, you aren’t asking “Can this person do this job perfectly?” because perfect rarely exists.) If the answer is yes, does it really matter what someone else paid that person? It doesn’t.

Now, there is a simple way to stop judging people by their previous salaries: Stop asking them their salary histories and requirements. Simply tell candidates upfront about your salary range. “Thanks so much for taking the time to speak with me about the position of marketing director. Our budgeted range for this position is $125,000-$140,000, depending on the specific skills and experience the right candidate brings. Are you still interested in the position?”

Your candidate who would have asked for $75,000 is thrilled (although probably intimidated), and your candidate who is looking for $150,000 will probably probe to see if you can go higher and if not, politely withdraw. Mission accomplished without perpetuating any low-ball salaries.

Remember that you wouldn’t want to be punished your entire career because you accepted a job at 22 years old that didn’t pay the correct market rate. Additionally, people who stay at the same company for many years tend to be underpaid because companies often have limits on pay raises. You don’t want to punish loyalty, either.

Your goal is to get the best possible person for the job. If that person has been underpaid in the past, then that’s even better — you get the best person and you do a good deed in bringing someone up to market rate while staying within your expected range. That should help you sleep well at night, confident in a job well done.

Have a burning HR question? Email it to evilhrlady@comstocksmag.com


Anne Oswald (not verified)July 17, 2018 - 8:01am

I agree with your answer and have other reasons why previous salary or requested salary should not be a huge consideration. Many career-minded people are more concerned with what they are doing and what cause they are supporting than they are about the money they earn. Salaries for key positions at smaller start-up or family-owned businesses, as well as many nonprofits, are low because these businesses and organizations may not have the means to pay more. I would not penalize someone who felt led to work in that type of environment. In fact, that might even appeal to me if I saw other indications of altruism. I can say from personal experience that a candidate can gain a broad base of knowledge and experience in these environments, leaving them well prepared for numerous other positions.