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September 06, 2008

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Depends on who "they" is that's asking. Co-workers? Friends? MYOB.

In job interviews, you offer that reasonable explanation. It's called salary compression, by the way.

I agree w/FMF - start out with honesty or your relationship with this potential new employer is going to get off on the wrong foot.

There are times you're almost forced to give a number, so give your TOTAL compensation package: salary base + bonus + the value of ANY perks + the employer's social security contribution + the value of ANY benefits (insurance, etc) + 401(k) contributions from the employer. Your true compensation package is much higher than you realize because you're paid much more than just your base. Just reply to them that your "total compensation package is" $$$$ but that you're looking to improve that significantly.

I was in the situation a few months ago of taking a new job and having to give my salary history. I did it, and they based their offer on my salary history, which was way too low since I was underpaid at my old job. I came back to them and explained that I wanted at least fair market value plus some (I had good, defensible, reasons for wanting a little more than fair market), and the company raised my salary to my expectations with the promise of a raise after a year. I ended up getting about $15K more than the first offer. I think that as long as you're honest and you know exactly what you want and what you're qualified for, your salary history shouldn't impede you. You have to catch up at some point, and losing this opportunity to get paid fairly would be very frustrating, so I'd be very clear about what offer you need in order to take the job.

Assuming my current position was in the private sector, I would tell them that I believe that my salary falls under a nondisclosure agreement by which I am currently bound and am not comfortable violating that agreement. Check your employee handbook; I've never seen one that didn't have a nondisclosure clause.

I would come prepared knowing my current annual pay rate including any bonuses, and would round that to the next highest $5,000 increment that's at least 10% more than my current salary. In other words, if I made $39k I would round to $45k, not $40k.

Using that figure, I would say "I think it's alright to tell you I made less than $45,000 last year, although I'm hoping to improve my income at my next position."

Here's what I've done:
a.) I'm not being difficult or evasive (negative things), I'm honoring an agreement with my current employer (a positive thing)
b.) I've given them a reasonable starting point (what the interviewer really wants) higher than my current wage (what I really want)
c.) I've shown I respect the privacy of my current employer's competitive information and abide by agreements I have with that employer, and presumably will do the same for the interviewer's organization if hired (demonstrating professionalism and good character)

Nowhere in there would I feel I was being disingenuous, obstinate, or deceptive. Of course, everyone's conscience is their own and you have to do what feels right for you.

I only go from one job to the other if my pay will increase by at least 15%. Obviously, I factor in bennies and 401k match and any shift differential that may be on the table. Just be upfront about how much you want to make. Before you interview, make sure you point out something that you do that's important and stands out. Trust me when I say they won't hesitate to give you the extra 15%. Being completely honest always works and telling them what you expect now will make you look even better. Don't lie, because if your caught, it will make you look like a fool. Especially in more specialized jobs.

It would be okay to disclose your salary, which would show that you have nothing to hide and that you are honest. But, I guess you can 'fudge' the numbers a bit to protect your own interests.

I'm the OP. Thanks for the advice all, I'm definitely a lot more clear about what I want to do now. I definitely do not want to lie, but I think my approach is going to be "I can bring _____ to the table and make ______ project work for your company. The market seems to be supporting $xxx per year on average, so given that information, I am willing to consider any reasonable offer". I'm still not telling them unless they insist, because I am of the mind that it isn't any of their business, just like they would likely tell me it's none of my business what people who already work for them are getting paid.

It turns out it's not like to matter though; the two positions I interview for next week are consulting contracts for which I already know the payrate (though there might be some negotiating room, we'll see). The most appealing job, as far as what I'd get to do, is also fortunately the one that pays $15,000 more per year than what I make currently. I think things may work out just fine without having to be concerned about this issue!

Companies are not asking because they are curious - they ask because they want to get the best value for their dollars - and hiring the most capable, experienced candidate at the lowest salary is part of their profit-making approach!

I have been in that boat - hired on to do X, then the job evolves and responsibilities increase to X, Y, Z and also A and B - but the salary doesn't keep pace. I definitely don't agree that full disclosure is appropriate - nor do I think you need to 'bash' the former employment by indicating you were significantly underpaid. I would deflect the specifics without lying (if you don't have a non-disclosure, don't say you do - they could call HR at the former employer and validate), by indicating your total compensation - say you make 40,000 salaried. That's $40,000 plus your employer's contributions to SS & Medi - +15%, plus 'paid time off' - add that value back in, plus your benefits' costs - include the max value of 401k matching, plus any potential bonuses available to you (regardless of whether they've been paid). Probably in the $55K range at this point ($6000 for SS/Med, $6000 for benefits, $2000 in 401K match) - If this number is still less than the research you've done regarding the local market, then I'd state that my total compensation needs to increase from my last position to ensure I maintain pace/comparability to what others are paid for similar responsibilities.

Also - remember that not just salaries are negotiable. I was coming from a company where I had 5 weeks' vacation - and going back down to 3 (the company's standard), meant I asked for an additional $XXXX (to match the extra time). When they balked, I countered with requesting to be given seniority to achieve that 5 weeks. And it worked, so I still 'got' those extra two weeks' pay out of them.

Isn't telling the truth the easiest way?

The reactions of some people to the truth are astounding.

The opportunities that open up, even if not immediately, can be phenomenal...it can lead to some pretty big results...

I am sorry, but my salary history is not any of their business; they are not going to volunteer the pay of previous position holders, not are they? No, I have experienced this coming to bite me, although I came out better, in the end. I simply mark my previous salary as $5K less than what I want to earn, because I would not accept a new position for less than a $5K pay increase, and at this point in my career, I am beginning to think that is too low. In one position, they met my expectation, but I later found out that I was making $5K less than the previous position holder... and they parted on very bad terms.

I feel that requesting a salary history is inappropriate, bottom line. What they are after is their best interest, and I am after mine. If they want to have me in their employ, they will meet my expectations, and if I truly want to be in their employ, I will have to meet their expectations; thus far, I have been able to have my requirements met, and I assume the same has been true for my employers.

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