If you operate in Massachusetts, you need to pay special attention. If you don't operate in MA you should follow this rule anyway.
Recruiters often start out conversations with candidates by asking them about their current salary. Why? For lots of reasons.
The most straightforward reason is that people rarely want to take a job for less money than they currently earn (or earned at their last job, if they are unemployed).
A recruiter doesn't want to waste her time with a job candidate who will never take the position at the budgeted salary.
The other reasons are more subtle, and some recruiters don't even realize that they are doing this, but salary is a proxy for ability. What does that mean? Well, let's take two candidates: Bob and Sue. Both have a title of Marketing Manager at their current jobs, but they work for two different companies. Bob is earning $95,000 and Sue earns $45,000.
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When the recruiter hears that massive salary difference, she's likely to assume that Bob is a better marketing manager than Sue. The recruiter assumes that their current employers are paying them the correct salary for their contribution to the company and therefore, Bob must be a lot more awesome than Sue is.
Sometimes, that is true, but sometimes companies mess up. And one thing that happens when a company originally messes up with a salary is that the person is haunted by that for the rest of her life. I'm choosing my pronouns carefully here. Women tend not to be as good at salary negotiation as men, so sometimes end up with a lower salary than their skills deserve.
As they go throughout their career, raises, promotions, and even new jobs are based on percentages of that original un-negotiated salary. So, while your policy of giving new hires a 10 percent increase over their last position is neutral on its face, it reinforces the inequality that might have started 25 years earlier.
That's the idea behind the new prohibition against asking candidates about their current and past salaries in Massachusetts new equal pay law, which goes into effect in 2018. If you operate in Massachusetts, you need to pay special attention. If you don't operate in Massachusetts, you should follow this rule anyway. It won't just help employees get fair salaries; it helps your business.
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Here's how to go about figuring out salaries instead.
Do Your Research First
Before you source your first candidate, figure out what the proper salary is for the job. Sure, there will be flexibility based on the final candidate's skills, but you should know your range.
Let the Candidates Self-Select Out
Recruiters say they want to know your current salary to see if you are already making more than their proposed salary. So, just tell the candidate, "Right now we're looking at a salary between $50 and $60,000 per year, depending on the final skill set. Are you interested in the position? Here's the thing, people will say no if they aren't. You may find some people who are earning more than that who say they are still interested. Why? Because money isn't everything. Commute, benefits, environment, and responsibilities are all things people can value more than money.
Keep Consistency in Your Departments
Sometimes hiring managers find a candidate that they just love, and are willing to throw money at to get them on board. The person is rarely as fabulous as you think she will be. Look for someone who can do the job you need at the budget you've set and everyone will be a lot better off.
Sometimes You Just Have to Ask
If you just cannot come up with an appropriate salary for a job, then ask the candidates what they are looking for. This sometimes happens when you have a unique position that combines numerous skill sets. It's hard to benchmark when you're mixing marketing and plumbing together. Understand that the numbers they throw out may vary wildly. After all, if you can't figure out a salary for a job, why should you expect your candidate to figure this out?
Approaching salaries this way will have a lot of benefits not just for women as the law hopes but for everyone. If you got a low-ball salary to begin with, it won't color your whole career. Additionally, if you want to change careers, it will be easier to do so without having to explain why you're willing to take a $20,000 pay cut. Instead of focusing on the money, you can focus on why you want to do something new.
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Is a law necessary to make these changes? Of course not. You can do so within your business today, regardless of your location. Legal intervention often creates unintended consequences and we'll see what happens when this law goes into effect in 2018. Until then, though, try being proactive with salaries and pay what is best for the position, not just what some previous company thought your candidate was worth. You'll end up with a better fit in your staff and salaries that are fair across the board.