got into the headhunting business in Silicon Valley when I was just 24 years old, fresh out of grad school. Not yet a real headhunter, I flew east to visit my family for the Christmas holidays that year. At every holiday party I attended, word got around that a headhunter was in the room and I was swamped with requests for advice and job hunting help. That was when it hit me: being a headhunter (no matter how "green") was very cool. I had instant friends. Without hesitation, people were whispering in my ear, sharing the most private things about their work lives. The one thing that startled me most was this: people just blurted out how much money they made.
Who says my salary is any of your business?
Now, I grew up in a working class household. Whether it was due to modesty or out of a sense of their place in society, my parents never talked to anyone about how much money they made. In fact, my parents taught me never to divulge my earnings to others. Your income was private, and your regard for another person was not to be based on how much money he earned or possessed. That was just the rule.
Today, people still want to tell me how much money they make. Maybe they think any discussion with me constitutes an interview, and in an interview you're supposed to tell your salary. After all, one of the first things that's requested on a job application is your detailed salary history. Prospective employers routinely want to see a pay stub. When they make you a job offer, you're required to sign a statement confirming your last salary. And people open their kimonos just as routinely, sharing information that is no one's business but their own.
It can be argued that your income does indeed say something about who you are. But, when you're about to begin negotiating for a new job, do you really want to prejudice an employer's judgment about you by divulging what someone else paid you? Should it really matter to a prospective employer how much money you make?
Let yourself be judged; insist on it.
In my opinion, your salary is an irrelevant measure of your worth outside the confines of your place of employment. Some will want to wring my neck for that statement, but before you don your assassin's gloves, please read on.
Your employer pays you what he thinks you are worth to him, based on what he can afford to pay you. If one's compensation were a true and objective measure of one's worth, no one would ever get a 20 percent salary increase when changing employers. He'd get only what he was already earning, or perhaps an increase equal to whatever raise his own employer would give him. If salary were a true measure of worth, it would be objective, and a given increment would mean the same to one employer as it means to any other.
But that's not the way it works. Your value actually depends on the needs and judgment of the particular "buyer," and on the buyer's ability to pay. That's why an engineer who's been earning $76k per year gets an offer for $95k to change jobs — the new employer has a need that's worth $95k to satisfy. As long as the new employer gets what he expected in exchange for the $95k, everyone should be happy. Except the engineer's last employer, of course.
Now we come to the tough part. If your value is really a function of judgment and need, why would any employer care what you've been earning at your last job? Good question, and one I'm asked all the time by people who are rightly perplexed when a personnel jockey insists on knowing their salary history.
A responsible, well-managed business shouldn't care what you've been earning. What will matter to that company is whether and to what extent it needs your abilities; how much it can afford to pay you; and how much profit it projects you will bring to its bottom line. Such a judgment requires that the company evaluate you carefully and in terms that are relevant to its business, not in terms that are important to someone else. Once the company decides what you are worth to it, negotiations can proceed in a pretty rational way. A smart company would never pay you based on anyone else's judgment of your worth, because that worth is relative.
That's why there is no reason under the sun to divulge what your last employer paid you. It simply should not be necessary because it is not relevant.
Salary surveys can hurt employers.
Now, some may argue that a company must know what other companies are spending for a given constellation of skills, if the company is to be competitive.
Hogwash. The use of human resources salary surveys can actually hamper a company's efforts to be competitive because these surveys drive job offers toward the mean. If you want to hire the best — and doesn't every company? — by definition you're seeking the tail of the curve, or to be off the curve. You don't want to hire — or pay for — average workers.
The recent controversy over the "I.T. worker shortage" proves the point. The information technology industry publication Computerworld recently reported that IT managers in some companies snatched the hiring process from their HR departments when they realized good candidates were being lost because HR was basing job offers on "industry standard pay scales." These scales — which are descriptive of past trends rather than of any job candidate's value — were serving as a poor substitute for sound judgment of the worth of a good job candidate in a competitive market.