For employers in New York, October 2017 marks the beginning of the ban of the dreaded “salary question” — that is, it will soon be illegal to ask job candidates what their current or most recent salary is when they apply for a job. In Massachusetts, this same law will go into effect next year, and several other states are considering similar legislation.
This measure is good news for both sides of the hiring equation: Candidates won’t be judged or underpaid based on their previous employer’s salary standards, and companies can ensure that they’re hiring the best talent at fair market value, without unintentionally (or intentionally) discriminating against anyone.
But some employers still do ask about salary in job interviews, and if you’re one of them, there’s a good chance you may have to reevaluate the way you value and compensate certain roles.
The team has asked seven members of the Forbes Human Resources Council to each share one tactical change HR departments can make to ensure they’re not only in compliance with the law, but compensate their teams more fairly.
1. Focus More On The Value of Talent:
When it comes to determining salary, hiring managers sometimes focus too much on the immediate impact on payroll and the bottom line, but compensation should focus more on the talent and experience of the individual, the uplift they will bring to the company and the salary figures for comparable roles in the market. Being competitive in the hiring market means investing in your team.
2. Use Validated Market Data:
Asking a candidate about their salary history is a surefire way to underpay an employee for the job or discriminate, even without realizing it. Validated market data should be used to set the salary range for your position, then you should pay at market. Many factors can manipulate the reason someone was paid differently before. Benchmark your job, then pay employees what they are worth!
3. Analyze Your Costs And ROI:
HR should think like a business owner analyzing the costs and ROI of a major acquisition. In this case, it’s talent acquisition. This means we gather and analyze data: salary market data, economic data for the market to be hired in and impact of unemployment data on the hiring process for the area. When speaking to leadership, utilize the data and your analysis to make compensation recommendations.
4. Focus On Salary Expectations, Not History:
HR and hiring managers will need to focus more on salary expectations rather than salary history. Although employers can no longer ask job candidates for their salary history, they are still allowed to ask the candidate for their desired salary. HR will need to re-evaluate their application questions and provide proper interview training for managers to avoid litigation.
5. Match Offers To Skills And Competencies:
Excluding salary histories will force us to know fair market value for roles and match offers to skills and competencies rather than salary history. We may offer some more, we’ll offer others less (and they may decline), but we’re more likely to build teams where compensation and skills are aligned. That’s a step toward ensuring the best employees are rewarded the most for their contribution.
6. Determine Every Position’s Value:
When the law takes effect in October, HR will be required to determine each open position’s value to the company. This will take additional effort on the part of HR departments, especially if they are struggling with constructing effective job descriptions. Then the salary is based on the candidate’s qualifications, past experience and demand for filling the position, rather than on salary history.
7. Take A Holistic Approach To Meet Company And Candidate Needs:
It means we have to change our talk track and adjust the way we discuss compensation, by having holistic conversations about the targeted compensation range for specific positions while also ensuring that the range meets the needs of the candidate. A candidate’s past salary history is not indicative of what they are worth; it’s more about what the market compensates for a particular position.
Source: http://bit.ly/2eVnrMd
