Should I Disclose My Current Salary?

(See important updates at end of article since laws in some jurisdictions have completely changed the dynamic -- for the better for employees -- and my answer no longer applies in those locations.  And lest reference to laws imply otherwise, please bear in mind that I am not a lawyer and this is not professional advice.  If you need professional advice, please hire a professional to provide it.)

Having been on both sides of the table for two decades, I’m going to give you an unpopular answer — but one that is based upon repeated personal experience: It depends on the kind of company you are applying to.

If the company you are applying to cuts corners at every chance, counts how many paper towels you use in the restroom, makes you buy your own coffee, and would rather you be unreachable than provide you with a mobile phone — then you need to think long and hard about whether you want to work there.

Such a company is possibly also the kind of place that would stupidly try to pay you as low as possible, i.e., below market rate — foolishly thinking they are getting a money saving deal. What they forget is that either you are a good worker, who will get stolen by the competition that is willing to pay market rate — or that you are incompetent and can’t get a job at market rate and have to accept their low pay. That is a foolish company indeed. “Penny wise and Pound foolish.” If you have any choice in the matter, I recommend you move along to a different opportunity at your earliest convenience.

You can guess that telling such a company your salary could be problematic in that they will compound all their other bad choices by also trying to pay you as little as possible, regardless of the consequences. So this is a kind of litmus test. Tell them what you make. If they low ball you by offering less than market rate —maybe it will event be slightly better than what you are making — then you now know this is a company you will not want to work at because not only are they disrespecting you by offering you below market rate but they are demonstrating poor business judgment by doing so. It’s very useful to know that a company is prone to poor business decisions prior to deciding to join that company — so that you can say “Thanks but no thanks,” and move along to a better option. Congrats! By disclosing your low current salary, you have saved yourself heartache and misery!

On the other hand, if you are applying to a smart company, who realizes that paying market rate, or even above market rate, for solid talent is actually a smart investment, that pays the reward of having good employees doing good work who are not easily poached by other companies — then telling you prospective new employer what your current salary is has only upside.

First, they are not going to low ball you just because you are paid lower than market rate. They are going to be smart and offer you a higher salary, at or above market rate, because they know that’s a key investment to make in an employee. It makes you less likely to be poachable. And if it turns out you are not performing well, they will deal with that when that becomes apparent. Until then, you are competent and a good contributor until proven otherwise and the smart employer will pay you that way.

Second, sometimes you are actually already getting paid signifiantcly more than the market rate (at your current employer) for the kind of position for which you are applying. This may mean that you have applied for a position that is actually below your level of skill and experience. It’s much better to have that discussion now than after you start the job and learn that it is NOT what it appeared to be. Or, sometimes the fact that you are paid more than market rate already simply indicates that you are REALLY GOOD at what you do. Or that your skill set is in heavy demand at present. That’s fine. In this instance, the new company needs to know about this salary so that they can exceed it. If you don’t disclose your salary, they will offer you market rate. You will look at that and feel insulted. And no one will be happy.

So, go ahead and tell your prospective employer what you make. Also, tell them what the market rate is for your skills and the job you are applying for. You can figure this out via online tools like Salary.com and Glassdoor – Get Hired. Love Your Job. And if you like, tell them what your salary expectations are — remembering to keep them real based on what market rates are.

Why? Because you’ll either learn now that they are “cheap” company who makes foolish economic choices — in which case you know you should stay away. Or they will bring your current low salary up to or above market rate. Or they will go back to the drawing board and find a salary or a whole new position that matches your higher-than-anticiapted existing salary.

In other words, disclosing your current compensation has many “up side” impacts of one kind or another. So in the context of while collar work in large public companies in healthy industries, for professionals with demonstrated skills, the benefits typically outweigh the liabilities.

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UPDATE 2017

Note that rules around asking for and disclosing salary history are changing in various jurisdictions in the USA.  One example is Oregon, where employers are now often prevented from asking about salary history before making an offer, it seems:  https://ogletree.com/shared-content/content/blog/2017/june/oregon-pay-equity-bill-signed-by-the-governor.  And I understand that in January 2018 a new California law will both precent employers from being able to ask about salary history AND enable applicants in the process to ask for the salary range of the position they are discussing, according to:  https://www.millerlawgroup.com/alerts/new-california-workplace-laws-for-2018-and-how-to-get-ready.  If you are seeking employment in one of these locations, you should of course completely revise your approach and expectations versus what I described, above.

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