Ah the dreaded salary question; a necessary evil in any recruitment process … but what if that was all about to change?
Massachusetts became first (and only) state that has passed a law barring employers from asking applicants to disclose their past salary history before offering them a job. This new law, which will take effect officially in July 2018, is the first of its kind in the U.S.A. and is being touted as a model for others to follow.
The law is quite simple: it is now illegal for a hiring manager to require an applicant’s past salary information, thus putting the onus on the hiring manager to disclose a compensation figure upfront based on what they believe an applicant’s fair worth to the company would be. In actuality, such a law forces many hiring managers to rethink their approach to salary negotiations. It is common knowledge that corporations and their hiring managers have pre-decided salary budgets and brackets to work within. However, when a candidate asks for more details about the salary range, they’re often (a) denied this information completely (b) given a vague answer – something about it being negotiable based on the unique candidate’s profile (c) ignored and asked what they think an acceptable range should be and/or (d) deemed as difficult and too money-hungry only to be cast aside as someone who is not seeking a job change for the right reasons. Ironic, but true.
With this new law in place, gone are the days of using an applicant’s previous pay as a base line, plus 5-15% to equal a new salary that is just a bit more enticing for the applicant. Moreover, applicants will no longer be left with the lingering suspicion that perhaps they’d have received a better offer if they’d inflated their past earnings. By forcing companies to ‘show their cards first’ when it comes to the wage they’d pay for a particular role, applicants can finally escape their lower wages from holding them back from achieving higher ones. And fair wages for fair work is just the beginning, this new law has the power and aim to be revolutionary.
The gender wage gap is a persistent problem in our societies and a particularly hot election topic for our friends south of the border. In the U.S.A. equal pay laws exist, but none have gained much traction in changing the norm. This new Massachusetts law is being hailed as a trail-blazer in not only fighting ‘a wrong’ in corporate recruitment processes, but also for the ramifications it will surely have on closing the wage gap. It is a fact that minorities and women are historically more likely to accept a lower salary than their male counterparts for a variety of reasons. Compound this with the fact that many employers often take an applicant’s past earnings into consideration when deciding on a salary offer, the gender gap persists. By failing to negotiate or accepting one lower salary, women and minorities are set back years – their past wages have the ability to follow them for a lifetime. In essence, this new law forces companies to be more objective and transparent in their hiring processes in the hopes of eroding the gender wage gap one role at a time.
Surely the change won’t be overnight, but I believe this new law is a step in the right direction. As HR professionals, we can lead the charge and take preemptive steps throughout our own hiring processes. From relying more on well-researched salary brackets than individual historical earnings, and encouraging managers to decide how much they would pay for an individual’s specific expertise, we can do our part in eroding the wage gap daily. As this new law continues to take shape, other states will likely adopt similar legislations and it might not be too long before we see a similar policy here in Canada!
Nicole is a Senior Consultant in the Montreal office of Odgers Berndtson, specializing in the assessment, identification and recruitment of senior and executive level talent within a broad spectrum of industries in the Quebec market. Nicole’s international consulting and project management experience, excellent rapport with candidates and strong analytical skills enable her to uncover and deliver top managerial talent to large public organizations, private companies and the academic sector.
Prior to joining Odgers Berndtson, Nicole worked for a multinational technology and consulting organization in Germany where she collaborated on the design, development and delivery of a global employee engagement survey for more than 35,000 employees. Nicole holds a Master of Science in Management, with a specialization in International Business from the Richard Ivey School of Business. She also completed her Bachelor’s degree in Management and Organizational Studies with a specialization in Finance from Western University. http://www.odgersberndtson.com/en-gb/people/nicole-duncan