End Salary History: a guide for recruiters

The Fawcett Society and the REC are calling on employers and recruiters to #EndSalaryHistory – to stop asking applicants how much they were paid in their last jobs. By basing salary offers on previous income, this practice bakes in gender, race and disability inequality and perpetuates existing pay gaps.

There is a reason why more and more people are advocating for bans on asking people about their salary history. This briefing looks at research on salary history bans in the US, and an exploration of some other positive gender equality changes to recruitment. The Fawcett Society looked at results of national polling in the UK in Oct 2021¹ , and case studies from people impacted by salary history questions from Fawcett East London, creators of the #EndSalaryHistory campaign.

The call to #EndSalaryHistory is being considered by the Government Equalities Office, who have recently announced a pay transparency pilot with participating employers to include salary details on job adverts and stop asking about salary history during recruitment.

This joint guidance produced by The Fawcett Society and the Recruitment and Employment Confederation explains and evidences why recruiters should stop asking for salary history to tackle gender, ethnicity and disability pay gaps. This guide is based on research by The Fawcett Society.

What are salary history questions?

Salary history questions ask job applicants to provide information on their pay in previous roles. Employers primarily use this data to determine pay offers, although some also state that they use it for other purposes such as organisational salary benchmarking.

Salary history questions can be asked at a number of stages within the recruitment process, from job application forms, to pre-screening questions, to the salary negotiation process. Recruiters are often asked to gather this information by their clients as part of their service.

US analysis has suggested that some employers switch to asking about desired salary as a way around the salary history bans in place there².  We encourage recruiters to avoid making this ask entirely, although of course applicants may volunteer information about their expectations in negotiations. This may change if more employers include salary bands in their adverts.

As 55% of those who have been asked salary history questions agree, they mean that your past low wages come back to haunt you and any historical biases that have affected your lower earnings are perpetuated.

Ending salary history questions has a significant positive effect in closing pay gaps

In the US, 21 states or city governments have taken the step of banning salary history questions to some degree. Research on the effect of these changes tends to find that these bans have narrowed the gender pay gap, with effects ranging from closing 4.7% of the existing gender pay gap for all employees, to a 6.2% boost to women’s pay. This closes 43% of the gender pay gap for job-changers (and half of racial pay gaps). US bans have also been shown to help workers who entered the workforce during a recession and still bear the wage ‘scars’ from that lost opportunity, increasing their hourly wages by 3.4%.

Half of working adults have been asked salary history questions

The Fawcett Society asked respondents if they had been asked salary history questions, describing them in these terms:

When employers ask job applicants to tell them how much they have earned in past jobs, in order to help determine how much to pay them. Research finds that this results in people from some groups who often start on lower pay, such as women and people from ethnic minority backgrounds, being paid less.

Four in ten (40%) adults, and half (47%) of working adults agreed that they have been asked salary history questions in the past. Slightly more men than women had been asked these questions (43% vs 37%), and people aged 25-44 were more likely to have been asked salary history questions (52%) compared with those aged 55+ (29%).

Salary history questions impact women’s confidence to negotiate

The 920 respondents who had been asked salary questions were asked how those questions made them feel (figure 1). For several negative effects, over half of respondents, women and men, agreed or strongly agreed that they had experienced them.

The most reported impact for women was reduced confidence in negotiating for better pay, affecting 61% of women. This also affected 53% of men, suggesting that hampering negotiation may have an overall drag on wages.

“When I have been asked about my current salary, I have been offered the lowest rate in the salary band when offered the role despite having relevant skills and experience. I have experienced this financial setback throughout my career unlike male counterparts who openly share their salary with me.” – respondent to East London Fawcett survey

“One time I gave my actual salary, and they gave an offer lower than the advertised range to match it.” - respondent to East London Fawcett survey

The other main argument for ending salary history questions is that they result in lower initial offers of wages for employees, and 58% of women and 54% of men reported that they felt this may have been the case. This feeling was highest (65%) in the 35-44 age bracket, the point at which for many women the motherhood penalty also begins to negatively impact their salaries and widen the gender pay gap.

N: 920 respondents who had been asked about salary history by a past employer (481 men and 439 women)

Salary history questions tarnish employers’ reputations

For 58% of women and 56% of men, salary history questions made them feel uncomfortable about the recruitment process, while for 57% of women and 54% of men it made them feel less positive about their potential employer. Building on the evidence that female employees care if their employer is taking action to tackle the gender pay gap, this demonstrates the reputational risk for employers of not taking the simple step of ending salary history questions. It also makes clear that these questions are unpopular with all workers and not just women.

The above data covers the views of those who have been asked these questions. Among all respondents to Fawcett Society’s survey, responses were similar when asked to say how they might feel if they were asked. 56% of women and 49% of men said they thought they would feel uncomfortable.

The survey asked all respondents how they feel about employers who choose not to ask these questions. Slightly more women than men, 63% compared to 58%, agreed that they would think more highly of an employer who chose not to ask salary history questions. Very few women and men, just 9% and 11% respectively, disagreed. Notably, agreement was significantly higher among retired people, at 68% – suggesting that this issue resonates with older people, perhaps both as consumers and former employees. An important point to note if we are to keep older workers in the labour market.

“I'm helping them negotiate against myself if I'm being honest. They are putting me in the very awkward position of either helping them negotiate against myself, lie, seem unpleasant if I refuse to tell them, or have to be smart enough on my feet to avoid the question.” – respondent to East London Fawcett survey

Determining pay through salary history is unpopular

Fawcett Society’s polling found clear disagreement among the public with the idea that asking for salary history is fair way of determining pay, with no real difference between women and men. Metrics such as the skill and responsibilities required to do the job (80% of respondents), and the value of the work to the organisation (77%), were agreed to be the most valid ways to determine pay. A smaller but still very substantial majority agreed with the use of industry and occupational benchmarks (67%). Clearly, the public do not view past salary as a valid way to determine pay – just 24% of all respondents agreed it should be used, with women (22%) less likely than men (26%) to agree. Interestingly, older people were also much less likely to agree that past salary should determine pay offers, with only 19% of those aged 45-64, and 13% of those aged 55-64, agreeing.

N: 2,220 respondents (1,076 men and 1,144 women)

Four in ten workers lie in response to salary history questions

An employer might claim that salary history questions are useful in that they could be either an indication of employees’ past and therefore future worth (which would be both discriminatory and unpopular), or potentially a source of benchmarking data for general pay structures.

However, these potential uses, would only be valid if that information was reliable. The survey (figure 3) shows that it simply cannot be trusted: 24% of women and 32% of men overall said that they had lied when asked about their salary during the recruitment process. This gender difference is explained by more women than men (31% compared to 23%) having not been asked about salary at all, which is likely to be due to more women working in minimum wage jobs (i.e., where there is no possible flexibility on pay) and/or in different industrial sectors, and is reflected in studies from the US. ³

N: 2,220 respondents (1,076 men and 1,144 women)

Only a very small proportion of people of either gender (3% of women and men) feel able to refuse to answer salary history questions, suggesting that rather than expecting people to refuse to answer – recruiters should just not ask.

“Disclosing this information cannot work in my favour but if you don’t disclose it you may be thought of as ‘difficult’ from the outset and thus not get to interview either! Minefield.” – respondent to East London Fawcett’s survey

When looking just at those currently working, four in ten (39%) workers say that they have lied in response to salary history questions. That is slightly higher than previous international polling on this issue, and shows that salary history questions cannot be relied on to make salary offers or to create reliable benchmarking information.

Transparency on salary bands is the other side of the coin

Something else that has been explored alongside ending salary history questions is wage posting – that is, advertising a job with a specific salary or salary band, rather than ‘competitive’, ‘negotiable’, or similar. Research shows that providing that information helps to overcome the negative impact of negotiations on women⁴,  by encouraging negotiation but also by limiting the impact of lower prior salaries. In the US, experimental approaches have shown that Black jobseekers are expected to negotiate less than white jobseekers, and are consequently offered lower starting salaries if they do⁵.  Experiments also find that women are penalised for initiating salary negotiations more than men.⁶

However, in the UK there is evidence that posting jobs with salary bands is not sufficiently widespread - a 2021 survey of HR managers by the Young Women’s Trust, conducted by YouGov, found that 40% agree that jobs in their organisation are often advertised without details of the salary level.⁷

A further link to salary history bans has been identified by some academics. These show that some employers use the practice of asking potential new hires about their salary expectations as an alternative to salary history questions, as another route to depress wages. Some US states require salary ranges to be published to counteract this.⁸  Given the evidence supporting this practice, it appears that ending salary history questions and simultaneously requiring the publication of salary ranges are two sides of the same coin.

“In my experience, [salary history] questions usually coincide with a job advertisement that is silent, vague or misleading about salary rate.” – respondent to East London Fawcett survey

Conclusion

It is clear that by stopping asking salary history questions recruiters can play a key role in addressing gender and other pay gaps in the UK. Recruiters can also work with their clients to encourage them to also stop asking salary history as part of their recruitment process. By following the lessons demonstrated in the US, the UK can create a more balanced and fairer labour market for all workers. Employers and recruiters can sign up to support the #EndSalaryHistory campaign here.

1 To understand the impact of salary history questions, The Fawcett Society commissioned Savanta ComRes to interview 2,220 UK adults online from 22nd to 24th October 2021. Data were weighted to be demographically representative of UK adults. Savanta ComRes is a member of the British Polling Council and abides by its rules.

2 Agan, A., Cowgill, B., and Gee, LK., (2020) Do Workers Comply with Salary History Bans? A Survey on Voluntary Disclosure, Adverse Selection, and Unraveling. AEA Papers and Proceedings Vol. 110, 215-219

3 Agan, A., Cowgill, B., and Gee, LK., (2020) Ibid

4 Mazei, J., Hüffmeier, J., Freund, P. A., Stuhlmacher, A. F., Bilke, L., & Hertel, G. (2015). A meta-analysis on gender differences in negotiation outcomes and their moderators. Psychological Bulletin, 141(1), 85

5 Hernandez, M. et al. (2019) Bargaining while Black: The role of race in salary negotiations. Journal of Applied Psychology 104(4) 581-592

6 Bowles, H., Babcock, L., and Lai, L. (2007) Social incentives for gender differences in the propensity to initiate negotiations: Sometimes it does hurt to ask. Organisational Behaviour and Human Decision Processes, 103(1) 84-103

7 Young Women’s Trust, ‘Young Women’s Trust calls for employers to advertise salary details to tackle gender pay gap’ Press release 25 May 2021 accessed at <https://www.youngwomenstrust.org/media-centre/young-womens-trust-calls-for-employers-to-advertise-salary-details-to-tackle-gender-pay-gap/>

8 Adler, L. What are your expectations? How employers circumvent the salary history ban. Research presentation cited in Bleiweis, R., (2021) Why salary history bans matter to securing equal pay. Center for American Progress, accessed at https://www.americanprogress.org/issues/women/reports/2021/03/24/497475/salary-history-bans-matter-securing-equal-pay/