Don’t Talk Money, Part 1

Apr 27, 2020 | Negotiating

Why You Should Never Discuss Money During An Interview

 “A nickel ain’t worth a dime anymore.” Yogi Berra

“Show me the money!” Rod Tidwell (played by Cuba Gooding, Jr. in Jerry Maguire)

“Very few negotiations are begun and concluded in the same sitting. It’s really rare. In fact, if you sit down and actually complete your negotiation in one sitting, you left stuff on the table.” Christopher Voss

“How much did you earn in your last position? How about the one before that? And the next before that? And the previous one?”

Most of us have received the age-old advice of “Don’t talk money during a job interview.” Do you subscribe to that adage, and do you follow it? Consistently? Have you ever slipped up and answered? If so, all we can say is “Ooooops! Bad move.”

Part I of this two-part series will discuss why you should always avoid discussions of money during interviews; Part II will examine several tried-and-true tactics for delaying that conversation until the right moment. In other articles, we will review some of the tactical and strategic tricks to winning at negotiations.

Let’s start Part I with a pop quiz:

Question 1: Is it legal for job interviewers to ask candidates about their salary histories during interviews?

Answer: It is now illegal in several US states and cities to ask about salary history. 

Question 2: In which jurisdictions are job interviewers prohibited from asking candidates about their compensation history?

Answer: As of April 2018, according to Business Insider the following locales have current or soon to go into effect laws prohibiting some or all questions about compensation history.

States that prohibit compensation history inquiry

California: Beginning in January 2018, the state “has banned private and public employers from asking about a candidate’s pay history.” 

Delaware: Since December 2017, the statebanned all employers from asking candidates about their salary history.”

Massachusetts: Beginning in July 2018, the state will ban “all employers from inquiring about a candidate’s pay history.” 

New Orleans: “Banned inquiries about all city departments and employees of contractors who work for the city. The rule is already in effect, but, in this case, it only impacts individuals who are interviewing to work for the city of New Orleans.”

New York City: Since November of 2017, the city has banned public and private employees from asking about a candidate’s pay history.”

Oregon: “Has banned all employers for inquiring about a candidate’s salary history.” 

Philadelphia: A judge pending court challenge from the Chamber of Commerce stayed a rule that was slated to take effect in May of 2017, which would have “banned the salary history question for all employers,”

Pittsburgh: “Banned city agencies from asking about candidates’ pay history. The rule is effective immediately, but only effects city employees.”

Puerto Rico: Effective last month, Puerto Rico “banned employers from inquiring about a candidate’s pay history.” 

Illinois’s state house passed similar legislation, but Gov. Bruce Rauner blocked it in a veto. Running counter to this rising trend, Michigan and Wisconsin actually passed laws prohibiting any such bans on the question through their states.

Why is this important and or relevant to your career and job search?

These laws and regulations recognize that asking for a candidate’s compensation history could be, and is often prejudicial. Past compensation information has the potential to give employers unfair leverage over candidates. Employers could exclude candidates, or set unfair parameters when making offers and negotiations based on the information. The theory behind this is based on findings that the potential prejudice has the largest impact on women and minorities. If one was underpaid in the past due to gender or other biases, then using those stats to determine future wages only dignifies those partialities. 

The point is not to debate the merits of these laws (although the reasoning does seem sound), but to recognize a long known fact; allowing employers access to the information gives them an unfair advantage. From our perspective, what someone earned in previously has little to no relevance to the value and worth they bring to a new one. 

How does this negatively affect the job seeker?

Revealing one’s compensation history helps the employer in two primary ways: determining that someone is overpriced and deciding not to pursue that candidate; or making a below-market value offer based on historically underpaid earnings. The employment candidate loses all negotiating leverage, which is difficult to overcome. The risks of sharing too much compensation information are clear:  

Overprice yourself, and risk getting prematurely screened out, missing out on the later stages of the hiring process when more in depth value discussions usually occur. 

Underprice yourself and leave thousands of dollars on the table by setting your salary expectations below the range the employer was willing to pay, or give them the impression you are under qualified or not suitable for the role.  

How should you answer the question: “How much did you earn previously”?

If you live where it’s illegal to ask these questions, the answer is simple:  politely remind the interviewer of the law. Use tact, and avoid an affirmative statement by asking a leading question similar to, “Gee, didn’t I read a couple of weeks ago that our state has banned that question?”

If you don’t have the good fortune to live in one those jurisdictions, our simple recommendation is don’t answer the question. Sounds easy, right? Well, yes and no. 

While it might be tempting to say, “That’s none of your darned business,” not many of us can pull that off as effectively as Cuba Gooding, Jr. from Jerry Maguire. For the rest of us subtlety is imperative. 

Tune in to our next post to learn the best ways to handle this question and more.

Want to know more? Visit ECP right now at: ECP.com to find out how we can help you overcome challenging salary questions and #GetHiredFaster. 

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