The morality of disclosing salary requirements

post by PhilGoetz · 2015-02-08T21:12:26.534Z · score: 6 (11 votes) · LW · GW · Legacy · 39 comments

Many firms require job applicants to tell them either how much money they're making at their current jobs, or how much they want to make at the job they're interviewing for. This is becoming more common, as more companies use web application forms that refuse to accept an application until the "current salary" or "salary requirements" box is filled in with a number.

The Arguments

I've spoken with HR people about this, and they always say that they're just trying to save time by avoiding interviewing people who want more money than they can afford.

My view is that the company knows what the job is worth, and the applicant does not, so the company should make an offer that gives them some profit per employee. The company also knows what the cost of living is in the job's location better than the applicant does.

Fair market negotiations should be informationally symmetric. I think salary negotiation is already asymmetric in the company's favor; job values probably have higher variance than salaries. Also, the company is closer to being a monopoly than the employee is. (That's why they can even get away with demanding the employee rather than the company name the first figure.) Fairness would mean moving in the opposite direction, not having the employee disclose his/her requirements or salary, but having the company disclose their books.

This is especially true for government contractors, where the employee is being hired to fill in one slot on an already-approved contract, which has an exact dollar amount attached to it. The contractor has already told the government they are going to pay the person who fills this slot $X; it seems fair to me for them to list that on the job advertisement and pay that person $X. [1]

There's a problem with that, though: The company won't be able to fill some jobs at the advertised price. Supply meets demand eventually, but not quickly enough for the contract. The company needs to lowball some employees so that they can hire people at inflated wages to fill the slots that are hard to fill just by bad luck, and still make a profit.

If I don't especially want a job, I'll either give a high figure or walk away if they insist I give my salary requirements before they name a range. It lets me indulge in a gratifying pretense of morality. But I wouldn't call the company immoral.

I do call the second case "immoral" [2]: requiring an employee to disclose their current salary. The only reason I can think of for a company to require your current salary is to circumvent market mechanisms for establishing salaries. Specifying a salary requirement would satisfy any other purpose. The practice locks people into career salary trajectories, preventing market mechanisms from restoring fairness. Disclosing salary therefore defects against all other applicants, and lowers salaries overall, even if your salary is high.

What do you think? If you were applying for a job that you wanted, and the company said "You must give us proof of your current or most-recent salary or we will not give you an interview," what would you do? (A poll is in a comment below.)


[1] The real money in government contracting is made by the companies--I don't even remember their names; they're not household words--that are authorized to contract out their employees to the government. (I don't mean firms like SAIC or Raytheon that do work in-house.) When I got job offers from the Naval Research Labs and from NIH, they told me to apply to one of these companies and tell them that the NRL / NIH agency wanted to hire me. The company would list me as an employee and then hire me back to the agency, maybe without ever seeing me. The company would do nothing except satisfy the legal requirements for me to be hired for a contract that they didn't even know existed, and for that they charge the agency 50-100% of the job's salary on an ongoing basis.

[2] More precisely, something workers should refuse to tolerate and should unite against.

39 comments

Comments sorted by top scores.

comment by mwengler · 2015-02-09T20:28:38.376Z · score: 5 (5 votes) · LW · GW

Fair market negotiations should be informationally symmetric.

I think that is essentially impossible. And not a good idea anyway. If I know I will take a job for $75,000 but am anticipating getting $110,000, why should I have to reveal that to the company? Information symmetry would require this.

You don't need to know everything that the company knows about the job in order to negotiate effectively and reasonably. What you need to know is at least something about what your choices are. You accomplish this by applying for more than one job at once. You don't need to know anything about any of the companies, except what they are offering you, and how they respond when you "hold them up" by talking about the other jobs you are considering.

As to disclosing my previous salary? I am virtually positive that I am well paid in my current job, and if I thought proof of this would get me a higher offer at a new job, then I would disclose it. If they asked for proof and I thought it was in my interest to provide it, I would. If they made me an offer I considered too low, I might explain to them that no matter what I was making in my previous job, that for my own reasons, the amount they needed to get me is X, and what did they think of that? If they called my bluff, so be it. If they tried to call my bluff and I didn't like it, I wouldn't take the job.

Considerations of whether I am supporting a family or not have to be irrelevant! My urgency to get a job should make me apply for more jobs at a time, which means I am going to do a better job of maximizing my outcome by having competing offers. My urgency or not to get a job is irrelevant just as their urgency to hire someone should not cause a moral obligation on me to behave differently in making it easier for them to hire me.

I think there should be a name for a cognitive bias whereby a story about your self-interest gets turned in to a moral argument that the other parties "should" do the thing that is more in your self-interest. Maybe this is named already and I'm just not aware of it.

comment by taryneast · 2015-02-11T05:22:22.654Z · score: 1 (1 votes) · LW · GW

"guilt trip" ?

comment by PhilGoetz · 2015-02-16T06:58:24.450Z · score: 0 (0 votes) · LW · GW

As to disclosing my previous salary? I am virtually positive that I am well paid in my current job, and if I thought proof of this would get me a higher offer at a new job, then I would disclose it. If they asked for proof and I thought it was in my interest to provide it, I would.

In other words, you don't have what we call "morals"? Morals being rules of behavior agreed on by a group of agents for their mutual self-interest. If everyone who believes it's in their interest to disclose former salary does so, management will realize that anyone who doesn't has a low salary and can be lowballed.

comment by mwengler · 2015-02-16T15:37:33.675Z · score: 0 (0 votes) · LW · GW

In other words, you don't have what we call "morals"? Morals being rules of behavior agreed on by a group of agents for their mutual self-interest

I am openly disclosing what I would and wouldn't do. So as an agent in a group, this statement is me telling you what I would not agree to. My statement expressing transparently what I would not agree to is evidence that, by the definition you give, that I do have morals.

comment by Dagon · 2015-02-09T17:31:01.386Z · score: 3 (3 votes) · LW · GW

I'm not sure I see the moral aspect. Assuming the same work gets done, it's pretty much zero sum whether the applicant, other applicants, or shareholders get more of the surplus. If it matters to you, look for a coasean solution (side-payments to those you think you've harmed).

There is a moral argument to be made regarding good matching of jobs to candidates for optimum production. But it's not clear which direction this pulls in this case.

I certainly can understand tactical aspects, and it probably depends on specifics whether it's in your best interest to disclose your current/previous salary.

comment by PhilGoetz · 2015-02-09T19:22:15.212Z · score: 0 (0 votes) · LW · GW

I think you're assuming outcomes with the same expected value are equally preferred. No society's morality works that way.

As indicated in one of my footnotes, I'm using the term "morality" to mean something like "a group will call moral that behavior that can solve coordination problems for that group, which aren't solved by rational self-interest." This is a "the morals of employees" formulation, not a "morals of society" formulation.

comment by Dagon · 2015-02-09T20:07:43.481Z · score: 0 (0 votes) · LW · GW

Hmm. I think I understand that defintion, but I don't think I agree with it as common or useful enough to use in a post title. Perhaps "the coordination effects of disclosing salary requirements" would be clearer.

Mostly, I don't think "employees" (or worse, "employees applying for a given job opening") are a particularly robust way to segment a population for moral evaluation. As a member of many overlapping groups, I find it difficult to decide which group's coordination problems I want to assist with.

comment by PhilGoetz · 2015-02-09T20:42:46.435Z · score: 0 (0 votes) · LW · GW

Here's a way of connecting the views of "social morality" and "group morality", and explaining why groups using expected value wouldn't result in society using expected value. (Not that I think it should, but that's a different discussion.)

Say society is composed of different groups, each with their own coordination problems, and behaviors that could solve them. Say you can analyze a situation x in the space X, and for each group g, find the gradient ∇u(g,x) of their utility surface u(g,X). Each group g then prefers an action given by the direction of ∇u(g,x), with a strength of preference given by its magnitude.

Suppose each agent z is a member of one group g(z). (We don't need this assumption, but it makes the notation simpler.) If we call "socially-moral behavior at x" the average, over all agents z, of ∇u(g(x),x), I'm pretty sure this is going to give results that do not maximize social expected value.

comment by PhilGoetz · 2015-02-10T05:59:51.634Z · score: 0 (0 votes) · LW · GW

Er... for the simple cases I've looked at, following the gradient, and solving directly for the maximal-utility point in the space, give the same results, as long as there are no local minima. I should have expected that.

comment by PhilGoetz · 2015-02-08T22:53:22.412Z · score: 3 (3 votes) · LW · GW

If you were applying for a job that you wanted, and the company said "You must give us proof of your current or most-recent salary or we will not give you an interview," what would you probably do? [pollid:816]

comment by [deleted] · 2015-02-09T00:58:33.239Z · score: 6 (6 votes) · LW · GW

I typically advise my students that this is a case by case basis. If this is the only interview you've had in a long time and times are desperate, just give them the information they've asked for. In most other cases, it makes sense to simply not provide that information, many times you can move forward anyway if you know how to skillfully deflect this question.

comment by Plasmon · 2015-02-09T17:57:14.953Z · score: 4 (4 votes) · LW · GW

There are other options. Especially in cases where requiring this is illegal, forging such a proof may be an option. Or, answer "If I give you proof that my previous salary was X, I will precommit to only accept this job if you pay at least X + 20%".

comment by Viliam_Bur · 2015-02-10T12:58:24.655Z · score: 1 (1 votes) · LW · GW

On one occasion I have said my previous salary but I also said that I believe I was seriously underpaid at my previous job, so I want X + 100%. At the end I have received X + 70%.

I had very good references though -- my former student was a developer at that company, so when the boss invited him to the interview, he said "well, he taught me what I know" (which wasn't literally true, but made a good impression).

comment by mwengler · 2015-02-09T20:31:27.499Z · score: 3 (3 votes) · LW · GW

I picked refuse, but for me anyway these are not the right choices. If it was a job I didn't really want that much I would refuse. If it was a job I wanted a whole lot, I would give them the info. As far as I am concerned, refusing is essentially me purchasing a luxury consumable, not behaving like a job-offer maximizing machine, which is how you should behave if you want the best possible job at the best possible pay. The purpose of applying for a job is not for me to educate the world or give it feedback on how it "should" behave. The purpose is for me to get job offers.

comment by kalium · 2015-02-10T03:43:58.613Z · score: 2 (2 votes) · LW · GW

I'm definitely underpaid now, and I'd definitely be screwing myself over by telling them my current pay, but it's likely that when I finally get off my ass and start a job search I'll be so sick of things that screwing myself over to get out more quickly will feel worth it. Even though it's probably not. Sigh.

comment by ilzolende · 2015-02-10T00:27:16.136Z · score: 1 (1 votes) · LW · GW

I have to say, it's in the best interests of the survey-taker to lie on this survey. I would refuse, and also 1-box on Newcomb's problem, and also reject any offer lower than 50% in an Ultimatum Game.

(Yes, making this fact known is not in my best interests, but this is a pseudonym, people don't believe the precommitments of a high school student made under pseudonyms anyway, and I think the benefit to me of mentioning this is higher than the slight cost incurred by making my commitment less believable.)

comment by [deleted] · 2015-02-08T22:02:45.601Z · score: 3 (5 votes) · LW · GW

Many firms require job applicants to tell them either how much money they're making at their current jobs, or how much they want to make at the job they're interviewing for.

Citation needed as this is actually illegal in many jurisdictions. They may ask, but they may not require disclosure.

What do you think? If you were applying for a job that you wanted, and the company said "You must give us proof of your current or most-recent salary or we will not give you an interview," what would you do?

Next job please. I wouldn't want to work for these jokers.

comment by PhilGoetz · 2015-02-08T22:59:49.735Z · score: 1 (1 votes) · LW · GW

Citation needed as this is actually illegal in many jurisdictions. They may ask, but they may not require disclosure.

Asking for salary requirements is nearly universal for private-industry CS jobs anywhere in the US that pay over $90K/yr. Asking for current salary is less common, but still common enough that I think the burden here is on you to go out and fill out some job applications before saying citation needed. I've only interviewed at one place, in Pittsburgh, that requires a proof of current salary (a W2 form or paystubs).

Here is a citation, though not a definitive one.

Where could I find out what is legal in a given jurisdiction? This post claims asking for current salary is legal, though it doesn't specify the jurisdiction (Boston? MA? US).

comment by [deleted] · 2015-02-08T23:05:08.137Z · score: 2 (4 votes) · LW · GW

Asking for salary requirements is fine and perfectly normal. You should state your salary expectations upfront, so as to not waste everybody's time.

Asking for salary history is a totally different situation. Employers are not legally entitled to that information.

I don't know which laws you would look at; this was part of my HR training at a previous gig.

comment by Error · 2015-02-09T17:21:51.553Z · score: 1 (1 votes) · LW · GW

Legally unentitled or not, there are lots of application forms that make it impossible to submit without specifying your pay rate at previous jobs. I'm not sure how they avoid getting dinged for requiring it, but I assume that they manage somehow.

The most consistent job-search advice I've heard is to avoid going through the HR forms until you've already discussed the position and pay rate with the hiring manager and reached an agreement in principle. The only method I'm aware of to achieve that without an inside lead is to put your resume up at the usual sites and let recruiters contact you first. Of course, that doesn't work if your resume is insufficiently impressive to get bites.

comment by [deleted] · 2015-02-09T20:23:08.342Z · score: 0 (2 votes) · LW · GW

The only method I'm aware of to achieve that without an inside lead is to put your resume up at the usual sites and let recruiters contact you first.

This absolutely won't work. Go to conferences, meetups, social hours. Meet people and network.

I have never, ever gotten a job via an HR form.

comment by Error · 2015-02-09T23:13:05.050Z · score: 3 (3 votes) · LW · GW

I question your "absolutely", given that it worked for me. The important bit seemed to be getting the "yes, we want to hire you at roughly X rate" before touching the forms; at that point they were just a necessary formality, and including the salary history on the forms no longer hurts any.

Go to conferences, meetups, social hours. Meet people and network.

This is what I meant by having an inside lead. Note that the things you're suggesting for acquiring one, while I'm sure they work for some people (perhaps most), are spectacularly unpleasant for others. Having a second-best solution is still valuable for those of us who experience unstructured meetings with strangers as roughly equivalent to being dropped in the shark tank at the aquarium.

I have never, ever gotten a job via an HR form.

I agree that going through the standard HR application process is a terrible idea, yes. I find it amusing that every careers page for every company on the web will tell you to do exactly the thing that you should not do if you want to make any kind of headway. HR in general seems to make it as hard for anybody to get what they want as possible. My partner's in management, so I've (peripherally) seen them from both ends.

comment by taryneast · 2015-02-11T05:19:17.358Z · score: 0 (0 votes) · LW · GW

spectacularly unpleasant for others. Having a second-best solution is still valuable for those of us who experience unstructured meetings with strangers as roughly equivalent to being dropped in the shark tank at the aquarium.

They are spectacularly unpleasant for me too, but I still go them because I want to have a decent salary and choice of job options. Also: don't forget you can network online in chat fora/mailing lists etc (where you can do your networking without being face-to-face).

Likewise: it's possible you just haven't found the right meetups etc to go to... there are a lot of aspie CS people around, and they still tend to like learning new stuff at tech meetups... find the ones that are very specific to your geekiest technology (avoid the ones that are like "web entrepreneurs" and instead choose something for your programming language, or even more specific - some really-specific toolset for your industry... the more geeky you get, the fewer random strangers you find, and the more people just like you - who are also not highly sociable, but will be more likely to be interested in your topics, and help you out when in need.

Also: you don't have to thoroughly enjoy the experience... you just have to endure it and fake being social for one night a month... and practice makes perfect here (or fake-it-til-you-make-it)

comment by palladias · 2015-02-09T16:32:04.605Z · score: 0 (0 votes) · LW · GW

I've been asked for previous salaries in webform applications where the question is marked as required and won't take dummy info (I tried both "no response" and 0 without success)

comment by sketerpot · 2015-02-11T00:55:29.058Z · score: 0 (0 votes) · LW · GW

Other useful dummy values are $1, $42, $1,000,000, $9999999999999.95, and "'; DROP TABLE salary; --". As someone who has written input validation code for web forms on a few occasions, I personally give you my blessing to subvert them.

comment by [deleted] · 2015-02-09T00:56:43.875Z · score: 0 (0 votes) · LW · GW

Mark, as a career coach, I can tell you it's very common.

comment by [deleted] · 2015-02-09T01:33:04.720Z · score: 2 (2 votes) · LW · GW

I think you're missing the point -- an interview is a two-way street. Demanding past salary history would be a clear warning that these are not people I want sell a portion of my life to.

comment by [deleted] · 2015-02-09T02:04:05.995Z · score: 1 (1 votes) · LW · GW

I was actually responding to this part of your comment:

"Citation needed as this is actually illegal in many jurisdictions. They may ask, but they may not require disclosure."

It's (sort of) common for employers to reject people who won't provide their salary, regardless of the legality of the practice.

I pretty much agree with your second point (barring the situation I mentioned above, which is that the alternative is going into debt or worse).

comment by Val · 2015-02-09T21:03:50.130Z · score: 2 (2 votes) · LW · GW

The problem with the current system is that people with good haggling skills (for example, former used car salesmen) have an unfair advantage against people with less haggling and more technical skills.

comment by MathiasZaman · 2015-02-11T08:01:14.964Z · score: 3 (3 votes) · LW · GW

Isn't that part of a generalized problem where hiring processes test how well people do at hiring processes rather than how well they do at the job?

comment by gjm · 2015-02-11T14:20:53.697Z · score: 3 (3 votes) · LW · GW

It is, but I think there's a useful distinction between hiring-process skills that are related to job skills but not the same (e.g., mathsy problem-solving or programming language trivia, when interviewing for a programming job) and ones that have basically nothing to do with job performance (e.g., how good you are at selling yourself, when interviewing for a programming job).

Measuring the first sort of skill is to some extent a necessary evil. No feasible hiring process is ever going to measure exactly the right things. (Though one can adjust the quantity of evil a bit; e.g., programming language trivia questions are a rotten guide to performance for most programming jobs.)

Measuring the second sort seems more fundamentally unwise.

comment by JoshuaFox · 2015-02-12T18:05:42.726Z · score: 0 (0 votes) · LW · GW

If asked your salary requirements, put off your answer to as late a phase as possible.

I precommit to myself to always say "let's see if we're a fit first, I'm sure we'll agree on a reasonable salary" at any phase of negotiations before they know they want me. " I perfume to do this even I think it will lose me the job. I don't think it ever has.

When asked my salary requirements by third party recruiters, I always say " you're the expert. You know the member better than i do. What do you think i can make at a stretch?"

One way to get yourself some flexibility is to remember that compensation includes not only salary but also various benefits. So, if you crack under pressure and tell them previous pay or requirements, you can use that fact to later give your answers the interpretation you want.

comment by JoshuaFox · 2015-02-12T17:56:02.467Z · score: 0 (0 votes) · LW · GW

If asked your previous salary, say "my contract with my former employerforbids me to say that [which is probably true], and I take my responsibilities to my employers very seriously."

comment by is4junk · 2015-02-09T00:14:47.101Z · score: 0 (0 votes) · LW · GW

My view is that the company knows what the job is worth, and the applicant does not...

Is this a problem now a days with sites like glassdoor? Or maybe some industries are not well represented.

When interviewing if you can get multiple job offers then you can play them off each other (in some industries). I don't have any experience with government work though.

comment by [deleted] · 2015-02-08T22:19:10.073Z · score: 0 (0 votes) · LW · GW

I think it depends. In a high-demand field, applicants will have their pick of jobs. The applicant has more leverage than the company, and it's reasonable for the company to want to know if they are even able going to be able to recruit you. In a high-supply field, the practice is exploitative. Companies should let their employees know what their salary is from the outset. Luckily, most companies have fixed wages for low-level employees and are generally upfront about what those wages are. Your experience seems to suggest that you are in a high-demand field. If you're in a position to demand a ludicrous salary any time you're forced to answer the salary question first, then that doesn't sound like a monopoly to me.

comment by PhilGoetz · 2015-02-08T22:56:10.112Z · score: 1 (1 votes) · LW · GW

If you're in a position to demand a ludicrous salary any time you're forced to answer the salary question first, then that doesn't sound like a monopoly to me.

Only because I'm single, have no kids and no debt, and have saved up money.

comment by Omid · 2015-02-09T13:30:32.856Z · score: -1 (1 votes) · LW · GW

If wages are too high, causing unemployment, might it be better for employers to get more advantages while hiring?

comment by [deleted] · 2015-02-10T07:27:16.476Z · score: -3 (9 votes) · LW · GW

Are you American? I have a feeling a crazy thing like this can only be found in America.

comment by taryneast · 2015-02-11T05:28:45.565Z · score: 2 (2 votes) · LW · GW

I am downvoting mainly because nothing in this comment adds to the discussion and it is derogatory to americans without any real cause.

Secondly because it happens to be wrong.

I have experience with the Australian job environment and the British job environment. Both locations try to get you to disclose your past salaries in this way. In my experience, they don't force you to, by using online app forms or refusing interviews to those who don't tell past-salary, but perhaps I'm not applying for the same kinds of jobs as the author of this post. They do, however, ask - all the time... and they make you squirm if you try to avoid the question, even though they have no particular right to the information.