Suppose you’re in a hedge fund job interview and the person across the desk asks, “What’s your salary history?” Is it illegal? Unethical? Should you answer?
Susan Lucas examined that issue in a recent article for BNet news. And surprisingly, it’s neither illegal nor unethical to ask, though it may be an unproductive question.
Lucas says employers may ask about your salary history for one of three reasons:
1) They may assume you want more money than you were making before, and don’t want to waste your time or theirs if the position you’re interviewing for doesn’t pay as much;
2) They like to see steady increases in compensation over the years which, presumably, show you are competent, able to learn and grow in the company. If your salary bounces all over the place, or worse, has been declining, that’s an obvious red flag;
3) They want to see if your previous or current employer valued your contribution correctly. That means if someone else thinks you’re worth $150,000, you must be worth that. If you’ve gained additional experience or training, you might be worth 10% to 25% more, and would be pleased with the incremental increase in your compensation. It’s human nature to benchmark one’s compensation against others in the same category, and employers do the same.
Okay, so how do you respond to the salary inquiry? Lucas suggests several techniques. One is to emphasize that you are looking for a position that pays you “fair market value.” Or you can mention a range of compensation figures, say between $150,000 to $200,000 base salary. Cast a wide net, in other words. Be artfully vague. You answer the question, but leave some wiggle room.
As annoying as a salary history question can be in an interview, get used to it, she says. It’s a reality of today’s job market and with tough competition for fewer jobs, it’s something you’ll have to deal with. The interview process is all about finding the “right fit” and compensation is one of those pieces.
Have you ever had to deal with an uncomfortable salary history discussion during a hedge fund job interview? Add your comments below.