Want to Fight the Gender Pay Gap? Don’t Share Salary History

Gender and pay is all the talk lately. What other topic has Pope Francis, Jennifer Lawrence, and Laszlo Bock, Chief of People Operations at Google talking? Sounds like the beginning of a joke. A Pope, an actress, and a HR exec walk into a bar talking about the gender pay gap. The Pope says it’s a scandal, Jennifer Lawrence blames herself for not negotiating, and Laszlo Bock says companies could fix the problem by paying for the value of the job not the person. Except, if you are a woman experiencing a pay gap, it’s not that funny. If you want to close your personal pay gap, negotiating a fair salary is crucial, but the way you negotiate can have a huge effect on your outcome.

For the pay gap to close employees, employers, society, and government need to be part of the solution. But Mr. Bock specifically alludes to one solution that is rarely discussed: employers need to stop asking about a job candidate’s current or previous pay. When employers ask that question, it becomes the foundation to build all the other solutions upon. Other factors that influences pay are undermined the moment the salary history question is asked.

The Gender Pay Gap Is Everywhere

There is no level of education without a gender pay gap. There is no industry without a gender pay gap. There is no experience level without a gender pay gap. There is no state without a gender pay gap. Research conducted by American Association of University Women (AAUW) shows that 7 percentage points of the gap experienced in the first year of employment cannot be accounted for. The unaccounted gap grows to 12 percent ten years into a career. Regardless the reasons behind the pay gap, each woman carries the burden of unexplained underpayment from job to job during her entire career because the salary history question is asked time and time again. The impact of this one question, when used formally as part of the calculation or as an unconscious anchor for future pay, compounds and perpetuates the gender pay gap.

Price the Job, Not the Person

True, asking about previous pay is how things have always been done. It’s what we know. It’s why we are familiar with the cry “know your worth”. The truth is, people are priceless, but jobs have an ever-changing value. Consider this question: if a finance director decides to move to the non-profit world, should the non-profit pay her based on her previous pay? Of course not. When this actually happened to a friend of mine, she had to answer many questions about her willingness to earn less before any non-profit would hire her. If Jennifer Lawrence, the highest paid actress in 2015, someday decides to leave acting, should she expect to be paid millions of dollars if she takes a job as an accountant, marketer, or pharmacist? No employer would consider that. So why, when moving as an accountant at one company to be an accountant at another, do we think it makes sense for an employer to base your current pay on your salary history? The truth is, this is a biased approach. Unless employers can verify that the previous pay truly was appropriate with no explicit or implicit bias, then they may be of guilty of compounding and perpetuating a pay gap. But why spend resources checking the appropriateness of other employers’ pay? A more effective approach would be to check the competitiveness of compensation for their job.

Negotiating Pay Without Salary History

Still the question of current and previous pay is on many job applications and often it is a required field. Leaving it blank is not an option. What is a gal to do to be considered for the job and still be able to negotiate appropriate pay?

First thing is to leave the field blank if at all possible on applications. When required, try and enter $0.00 to meet the digit requirement of the field. You have more leeway when it is a text field. State that your pay is confidential, which it is for about 60 percent of employees in the private sector. You will need another response if you work in one of the growing number of states that no longer allow pay secrecy agreements such as New York and California. Shift the focus to the value of the potential job by replying that you are looking for a competitive compensation package in the new job. You may hear the classic, “Well, I don’t want to waste your time. Knowing your pay helps me determine if we are in the same compensation ballpark.” As I learned on day one while working at a staffing firm, no job is truly open without approval and a budget. Your response should be, “Oh, well I assume this job has been approved and budgeted. What’s the budget for the job and I can let you know if we are in the ballpark?” Many recruiters answer this question and you can more on to your qualifications for the job.

Here’s to the day when the salary history tap dance is a thing of the past as is the gender pay gap. Until then, enjoy the dance.