While many countries are moving towards prohibiting salary history, in Singapore, companies can still ask about your current salary and request for payslips as verification.

As a job applicant though, this does not mean you have to comply. Job applicants have the right to not declare that information and employers cannot insist on it. 

But this has become an extremely common recruitment practice here in Singapore, as high as 95 per cent in 2020! We see “last-drawn pay” as a compulsory field on job application forms, and hear it asked during screening rounds that somehow you’d feel obliged to answer in order to proceed.

Why are companies asking for salary history?

It is not surprising job seekers worry that disclosing their prior pay could make future employers use it against them to undercut with a lower offer. After all, it is in the interest of companies to save costs.

This could be true in some cases, but most of the time, the rationale behind companies asking for salary history is to ensure that a candidate’s expectations align with the company’s budget before proceeding with the interviews. 

“The last thing most job seekers want is to engage in a protracted and sometimes arduous interview process only to realize at the very end that their salary expectations are not aligned with the pay range of the position.”

Sylvia Francis, total rewards manager and a member of SHRM’s HR Disciplines Special Expertise Panel

Some also pointed out that by knowing the candidate’s current salary, recruiters can get a full picture of their past career progression and market value so as to justify a better salary negotiation.

Why are job seekers rejecting salary history?

Other than the fear of being lowballed, using salary history to determine future pay can perpetuate the risk of being undervalued throughout one’s career. 

MoneySmart illustrated this very well. A fresh graduate can be asking for 30 per cent less than market average in exchange for work experience and learning opportunities. But if future employers use this as a benchmark for salary offers, it would be an endless chain of being undercompensated and limiting future earning potential.

“Some of them will think that if they are underpaid currently, they will be underpaid forever, with their current salary as the (always low) base.”

Gabriel Nam, Partner at Page Executive Asia

This is the same case where salary history practice can worsen existing pay disparity in the workforce. For instance, we know that female workers tend to ask and receive lower starting salaries, which continue in their employment from companies to companies.

American Progress reported that “setting starting pay based on prior salary is not just a one-time decision: It affects a worker’s subsequent raises, bonuses, promotions, and retirement savings, as well as any other factors that may be tied to their starting salary.”

On the flip side, there is also an apprehension when salary history ends up restricting the job seeker’s options. For those willing to take a lower pay due to reasons like career switch or retrenchment, revealing the last-drawn salary might scare off prospective employers. 

What can employers and job seekers do?

There is much advice online and from career experts for job seekers on how to tackle and deflect the salary history question.

But ultimately, you need to know your worth as well as what the prospective employer is willing to pay, rather than basing it off your current pay.

• Do your homework on the market average for your level of expertise
• Ask for the role’s salary range if it’s not stated
• Communicate the value you can bring to the table and justify your expected salary
• Understand what it takes to receive the desired compensation

For prospective employers, more and more candidates will refuse to divulge their confidential salary information. In fact, job seekers find red flags in companies who insist on having such information and will avoid them.

Instead of relying on past salary data to screen candidates, there are more effective and ethical ways to go about the recruitment process, such as:

• Sharing salary ranges upfront with candidates to align expectations
• Using salary expectations and market rate at the current economic climate, not past salary, as a benchmark
• Making salary decisions based on candidate’s value, not history
• Communicating the rationale of the final salary offer from the given range

It is important to note that money is not the only deciding factor. Job seekers look at opportunities as a whole with monetary and non-monetary benefits that companies can provide. Employers also have to view candidates beyond a salary number for the skills they can contribute. 

Using salary history to determine whether they are a match can be limiting on both sides and do more bad than good. 

Where JobWiz comes in

On JobWiz, employers are encouraged to assess candidates fairly by sharing salary ranges in job postings. Having this information upfront benefits both job seekers and hiring companies:

• Puts job seekers in the driver seat to decide whether to apply for a position
• Gives job seekers a gauge of their value to the prospective employer
• Saves the recruiter’s time and effort in screening applicants
• Turns the company into a green flag for its transparency and trust

This sets the stage for a better hiring experience and gets the right candidate through the door. Both parties can focus the conversation around understanding the candidate, the company and the role and responsibilities, not dancing around or haggling over salary. 

Beyond salary, employers on JobWiz can attract talents who are looking at a total compensation value, such as learning opportunities and work flexibility. These are perks that job seekers today want, and JobWiz helps them seek out such opportunities more easily, now with our new personalized job recommendations! 

Relying on salary history is not sustainable. On the contrary, transparency will be even more appreciated to attract good people to join the business.

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