Measuring the desirability of a job applicant by salary history

Friday, August 8th, 2008 - career transition, contract negotiation, credit crunch, How to Write a CV, Job Application Rejection, job hunting, job offers, NGO/NFP, resume writing, social networking

Salary Negotiation

Money makes the world go round
Creative Commons License photo credit: a.drian

Ron, an educator, asks: I would like to know why recruiters and HR Professionals measure the desirability of a job applicant by salary history? I can think of several very good reasons for salary history to be among the most unreliable measures of employee desirability. Here are a few:

  • I worked for a start-up and sacrificed salary for a piece of the action. The company went belly up
  • Some people take time off to raise a family
  • Some people take time off to join the Peace Corps, or work on the mission field
  • Some people try a different career, perhaps a lower-paying one, just to see how it is, or to learn something different.

All that tells me that to use salary history as a measurement of increasing employee responsibility, or competence, or whatever, is bordering on the absurd. I liken it to deciding whether someone is ready for college on the basis of SAT scores alone. I can only see salary history working when taken holistically, and I have never before met anyone who reviews potential employees holistically. So tell me: why is it done? What is to be gained from it?

In answer:
Salary is one item by which employers reward employees for giving them their time and effort. Present research shows that employee’s consider salary less of a reason to stay than other more human reward factors – recognition and development, for instance.

Reward and particularly salary hence in its present research view is more inline with Hertzberg’s theory, in that its level indicates an “acceptable” level on behalf of the individual, for undertaking a particular job or piece of work. Hence, the examples you give – start-ups, peace corp’s, raising a family, etc – can be seen in concept of a whole rewards system to the individual, over a pure salary reward focus.

With regards to a more standard work progression – from one similar job to another, possibly higher or related – then understanding the reasons for a candidates application/moving are important factors in assessing fit. Package reward is one of those factors – that’s in both base salary, as well as benefits. For instance, older applicants are often more focused on the pension system and contributions; some applicants having had recent family or close to them health scares are more focused on healthcare.

Starting Salary

However, as every Recruiter and HR professional will tell you – often its the starting salary which creates the greatest problems in candidate contract signature, and most likely in sales recruits. Those who see themselves as “progressing” will initially look at OTE, but when it comes down to signing the contract most focus and question base salary. Often, the most motivated candidates are those have left their employers within the first three months of employment, having not assessed their own needs. Recruitment is an expensive process, so hence why recruiters and HR professionals will ask and ascertain salary levels before making an offer – plus, why not try and get best value for your company?

Salary is not and should not be seen as a whole solution/test of progression – its better positioned as part of a whole reward and recognition system. Good recruiters and HR professionals will always ask that question, and good candidates will be clear throughout the recruitment process why they are moving, what they seek and what that whole rewards package looks like.

Good Luck!

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