Your salary history: how to share it with potential employers

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Talking about money can be a little awkward for some. But it’s essential to be prepared to answer potential employers when they ask about salary history and expectations, in the course of job seeking.

To preempt situations that could lead you to a tight spot, here’s a curation of why it’s important to be aware of your salary history, how to approach question related to it and a bonus template to enable you to put things in the best light, while being completely honest. Interestingly, this list is for all job-seekers, whether you’re transitioning into a new industry or browsing greater challenges and responsibilities in your current industry.

Reasons Your Employer Asks for Your Salary History

Understanding why employees ask about your salary history is the best place to start when you need to know how to frame the answer. Usually, your potential employers will want to ascertain your salary history to:

-      Detect your market value: Your employer can easily assess your market value, in terms of performance and contribution to past-employer goals, from your salary history. Your salary is, after all, a reflection of your ability to accelerate organizational growth.

-      Align your expectations with their budget: An employer may consider you overqualified for the role, if your most recent salary exceeds the one that can currently be offered.

-      Ensure the remuneration on offer is fair: If most of the jobseekers’ recent salary histories well-exceed an employer’s budget for the role, considering an increase in package may be considered appropriate.

Sharing Your Salary History: A necessity?

It’s not compulsory for employers to approach this phase, and it’s also highly dependent on the employment laws pertaining to your location. It’s crucial that you’re aware of your rights as a job applicant. This will enable you to differentiate between what’s allowed and what’s illegal. Then again, some employers do not ask for the salary history of candidates; instead, they request an expected salary range. In such cases, revealing your salary history is a matter of choice.

If you are convinced that your salary history does not reflect your abilities or potential by a wide margin or you are not comfortable sharing the details for any genuine reason, you could politely decline or deflect from answering the said question. A simple statement like, “I’d like to understand the roles and responsibilities of the job before discussing salary expectations,” would work well. However, remember that you may have to explain the background and reasoning behind such a decline/deflection.

Sharing Your Salary History: The Ideal Approach

There are broadly three approaches to sharing your salary history. The choice among these will depend on the information you are willing to share, the details requested by the employer and the part of the process wherein this question emerges.

-      Respond with approximations: You could avoid mentioning an exact amount by subtly using general terms. (“My salary at the moment is in the mid-fifties.”)

-      Respond with ranges: This is especially worthy if you’ve received a salary-raise in compensation for your performance as it impresses your potential employer into thinking you provide enough value to earn a raise. You could highlight this achievement by mentioning your starting and current salary. (“When I began working with my current employer, I drew ₹50,000 and I’m currently drawing ₹75,000”)

-      Respond with the exact Account: Either mention your exact salary or round it off to the nearest whole number, to avoid mentioning the exact figure. (“I currently earn ₹90,000,” if you’re earning ₹87,000)

Mention Additional Compensation: This includes any amount of added/regular bonuses, commissions, or other monetary incentives, apart from your base salary.

(“At the moment, I’m earning a base salary of ₹45,000 plus a quarterly bonus of ₹3,000”)

Reveal Gross income rather than Net income: In case you’re asked to provide a salary history, make sure to include your gross annual salary i.e., the total amount earned on an annual basis in a job position, before taxes. This is not only a convention, it presents your ‘cost to company’ or CTC and helps the potential employer plan their salary cashflows better.

Always Stick to the Truth

Finally, avoid providing misleading or false information as this is a foolproof method of being blacklisted by the company you apply to and sometimes, even other companies in the same industry, if your employer has a robust network. Every number, approximation, or range you share must be verifiable at the end of the day.

Remember that sharing your current salary with your potential employer doesn’t necessarily provide you with leverage to obtain the same salary. At the same time, it does not diminish your negotiation power for a higher package. Employers realise that job-seekers usually apply for jobs with the expectation of higher salaries, especially if the roles they are slated to take up are more challenging or complex in nature than their previous jobs.

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