Insights

Inform Your In-House Executive Recruiting Team of Applicable Laws

Posted by Reed Flesher

Salary history may be a legally sensitive topic with some of your job candidates.

One factor in the executive recruiting process is the salary that will be paid, which for an executive is considerable. Among candidates that otherwise appear equal, being able to pay a lower salary may become a major factor in who gets hired. While many details go into the salary and compensation determination, one of them has traditionally been the candidate’s salary history.

Laws About Salary History Are Changing

Salary history used to be a typical question on many job applications and was also asked about in interviews. But many states and localities have begun to pass laws making it illegal to ask candidates about their salary histories in an effort to bridge the gender pay gap. Policymakers and advocates argue that women often started out their careers making less than men and that the salary history question just enables each successive employer to compound that gap by continuing to pay them less than other (male) candidates.

Currently, 16 states and the Commonwealth of Puerto Rico have banned the salary history question, with municipalities in other states doing the same. Companies that continue to ask about salary history risk fines and other consequences that will end up more than offsetting any savings they gain by continuing these practices.

In reality, regulations regarding hiring practices often change, and it can be challenging to stay in compliance with them. This becomes even more difficult when your company hires in many different locations around the U.S. Thrive TRM now offers tools, including filters, that can help people on the in-house recruiting team avoid running afoul of the law in various states and cities where candidates are sourced.

Why Salary Matters

Not being able to ask about salary history can make the hiring process more difficult, because you may now risk making an offer that is too low or too high. Bungling the salary offer has cost hiring teams their preferred candidates more than once. How can in-house teams make fair salary determinations without having salary history information?

The only thing left for hiring teams to do is to look at other factors like the candidate’s experience, salaries for similar positions at comparable companies, and what their company can actually afford to pay. When the team gets to the point where they want to make an offer, they need to have a conversation with the preferred candidate beforehand to gauge their receptiveness to the offer and to the likely compensation package.

Ultimately, these laws may help to make salaries fairer and eliminate wage gaps that may exist not just for women, but for racial minorities and even certain industries that may lag behind others in executive salaries.

Thrive TRM can help with all aspects of the executive search process, from inputting candidate profiles with no manual data entry to creating instant reports that show the status of your search and make sense of the endless data executive searches can generate. Contact us to find out how Thrive TRM can be your in-house executive search team’s partner in a successful search.

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