Frank Capra, the famous director of the 1920’s, turned down an offer for his first directorial role for the grand total of $35 a week because he felt he was worth $45.00 a week. When the interviewer told Capra the offer stood at $35.00 because “them the rules,” Capra replied “I’m not asking you to break any rules. Start me today at $35.00 and tomorrow you raise me to $45.00. Everybody’s happy and no rules broken.”
Needless to say, Capra got the job and went on to direct many memorable movies including “It’s a Wonderful Life” and “Mr. Smith Goes to Washington.” For Mr. Capra, getting to “yes” in salary negotiations may have been less complicated than it is today for job hunters, but in many ways it still required his having a strategy, and a good sense of humor!
Let’s say Mr. Capra did not get the raise he wanted. Did he have other options? Certainly, in the 1920’s working from home instead of an office, having health care coverage, and contributing to a retirement savings plan were not part of the compensation package, thus not negotiable items. Possibly the use of a company car could have been one of his bargaining chips, or extra time off from the job. But we’re only speculating here.
In today’s job market companies offer a variety of benefits and perks that were not available in Mr. Capra’s time, so negotiating today is more about getting a fair compensation package, which can include more than salary. Sign-on bonuses, performance incentives, a wide variety of health care options (despite some limitations for smaller companies), vacation time, and covering relocation expenses to name a few. So why the angst felt by so many job hunters when handling the salary question on interviews?
"Companies miss out on very good candidates for jobs they're perfectly capable of performing."
Uppermost in the minds of hiring managers and HR professionals is a candidates’ salary history because they feel it gives them a measure of someone's ability to perform a job's functions, but unfortunately this has led to many bogus assumptions about a person’s ability to perform the functions of the job for which he/she is applying. If your salary is too high the assumption being you’re “overqualified” for the job. Conversely, if your salary is too low the assumption is you don’t have the skills or experience to do the job. Either way, companies miss out on very good candidates for jobs they’re perfectly capable of performing.
The good news for job hunters, some states are enacting laws to help eliminate this bias, especially between men and women performing the same job functions. As one step in this direction, New York, Massachusetts and California are enacting laws that will prohibit companies from collecting salary information during the interviewing process. This would include not asking applicants to disclose current or past salary on job applications, and in interviews, prior to a conditional offer being extended. (A conditional offer in most cases meaning you have the job pending a satisfactory check of your references, and where required, the passing of a toxicological test.)
Why is this such good news? Let me share an example. A client of mine who is a marketing and communications professional has worked for some very prestigious financial services organizations, and although she has advanced in both title and job responsibility over her career, she is always a level or two below her male counterparts in salary who hold comparable positions. A big part of this discrepancy lies in the salary information she felt obligated to disclose during the interview process.
Because disclosing salary can lead to bogus reasons as to why someone is not qualified to do a certain job, career coaches (myself included) will advise clients not to disclose their salary before an offer is made. It’s the old “he who shows his hand first stands the most to lose.” This approach, however, is not always that easy. I’m sure many of you have had the difficult choice of whether to include your current and/or past salary history on job applications, plus deal with the proverbial question “how much are you making?” And let’s be honest, sometimes to avoid appearing difficult (despite attempts to defer the salary question) people tell hiring managers or HR what they want to hear.
With the enactment of these new laws prohibiting companies in asking about salary, the momentum should swing in favor of the job hunter. This change, however, is not to say that once an offer is made if the starting salary (or total compensation package) is not in line with the market value for the job, or the value you bring to it, that you simply accept it. The difference is that as the job hunter you now have more leverage to negotiate a better deal since an offer is on the table.
One final caveat regarding these new laws, there is nothing that says you cannot voluntarily disclose how much you make or made in a current or prior job. But why would you? With this information in hand, companies are still likely to come up with the same bogus reasons for not hiring you as stated above. So as a job hunter, stick to your guns and defer the salary question until the company makes you an offer. Until then, you have nothing to negotiate. As the multi-billionaire Warren Buffet once commented: “If someone is going to be unfair with you in salary, they’re probably going to be unfair with you in a hundred other ways.”
If you have some thoughts on this subject let me know. Also, if you’re in the throes of interviewing and facing the salary question, you may want to consult a career coach to help you navigate these often tricky waters.