I’ve probably hired hundreds of people in my career and I also do a fair bit of mentoring for new technology professionals, especially new Data Scientists and Data Engineers, Software engineers, and similar roles. One thing that often comes up is looking for new jobs and how to go about that process. For more junior candidates especially, you are at risk of getting asked a very dangerous question; What is your current salary? It’s a horrible question, and should make you pause for a moment and consider if you really want to work for the kind of company that would ask it.
Know your worth.
One thing I always advise people, before they start talking with new employers, is to know their worth on the open market. Market salaries are your most important piece of information in any job search. Companies spend obscene amounts of money buying salary data so they can have a general idea of what they’ll have to pay to acquire and retain talent. They already know this information, in great detail, and if you choose not to come prepared with this information as well then they almost certainly will take advantage of you.
If you are sensitive about talking to friends in similar roles at similar companies about salary data, simply ask for ranges. If you don’t have friends doing similar work at similar companies then you need to address a more basic problem, the fact that you don’t have a professional network. Perhaps I’ll write about this at a later time. You can also look online as there are many websites which post salary data by occupation and sometimes even on a per-company basis. There is no excuse for not knowing this before you start looking and in fact you should know it at all times.
Always know your worth and set that as your desired salary. Never settle for what you think you’re worth, but rather demand what the market will support (or more if you can prove you bring a greater than average market value).
Anything you say can and will be used against you.
Sometimes during the recruiting process it can be helpful to know a candidates salary, but it’s more of a passing curiosity than a hard requirement. When a potential employer asks about your current salary in a persistent or inflexible way, it is almost certain they plan to use that information against you. The reason is that most companies who are going to offer a fair market salary (or ideally some percentage over the median market salary) will already have a budget for the position and will simply make the offer. The only reason they would need to know your current salary is if they are either paying below market and are trying to screen you out, or if they are willing to pay market salaries but want to pay you less if they think you’ll take it. The only solution is to outright refuse to provide any information on your current compensation.
Many HR people or recruiters will try a lot of deceptive tactics to get you to disclose your current salary, like saying they have talked with other people in the company doing similar jobs so they have some example salaries but if you tell them your salary they can make sure you get a fair offer. This is a lie and a trap. A fair offer is median market or more and they don’t need to know anything about your salary or the salary of anyone else in your current company in order to make that offer. Remember, they already purchased the salary data and/or know about market rates. Don’t let them trick you.
Why do they do this?
To cheat you out of money. Having a budget limitation or not wasting your time is no excuse since they can just simply be honest about the maximum they’re willing to pay. The position is already budgeted, remember?
People typically don’t leave jobs unless they’re getting about a 20% raise from their current salary. Companies know this so they will ask for your current salary and then make an offer that is around 20% higher than that regardless of the market rate for your role. From the company perspective they are saving money so they are happy to rip you off.
That being said, if they’re giving you a 20% raise and it’s still under market then you need to take responsibility for your own career path and consider if the company and role you currently have is worth the discount against your market value. See Know your worth above.
How do you respond?
Be honest. Tell the person that you are aware of your market rates and you are sure that the company will provide you with a fair offer.
Another point to mention is that it’s not relevant what you’re leaving, but what you’re going towards. People change jobs for different reasons, and depending on the stage of their career it may be worthwhile to take a pay cut for a fun challenge or pay raise for more cash but less fulfillment in other areas. The compensation you’re leaving does not necessarily matter when it comes to the compensation you’d be willing to accept.
Most companies will drop the topic at this point or tell you that they can’t proceed without you disclosing a number to them. This is either a bluff or they’re serious and you don’t want to work for a company like that anyway.
What if you are currently paid above market?
This can work to your advantage. Be honest about the fact that you know you’re being paid well above market, but that you like the role, company, culture, products, or whatever other reasons are causing you to consider making a move and for a lower salary. I almost never advocate such a change for someone early in their career, but some opportunities could call for it.
What if they keep pressing?
Again, be honest. Tell them you are uncomfortable with their pressure and you have already explained your perspective. Add that since they aren’t respecting your boundaries you are not as able to trust them since they are clearly the only side which will benefit from discussing that topic. Be firm. Redirect the conversation to cultural topics at a company which would continue pressing for such information. Make them explain to you why they have a good working culture yet press employees to put themselves in disadvantageous positions. Tell them you aren’t sure you want to continue with the process due to concerns about the culture.
You always maintain the power to walk away.
If they’re talking with you and you’re a tech person then they need you a lot more than you need them. Don’t forget that.
Many thanks to Eugene Yan for his extensive feedback and perspectives on this post.