To disclose or not to disclose: The salary history dilemma

Should you disclose your last-drawn salary to a potential employer? This age-old question continues to perplex jobseekers. In some markets, salary transparency laws are already reshaping the hiring landscape, promoting pay equity and reducing information asymmetry. However, in regions where salary disclosures are still left to the candidate’s discretion, opinions remain divided on whether revealing past earnings is in a jobseeker’s best interest.

On the one hand, sharing salary history can offer hiring managers a clear picture of a candidate’s experience level and expectations, helping to establish a fair starting point for negotiations. When a candidate is transparent about their past earnings, some hiring professionals feel they can better assess the individual’s market value relative to industry benchmarks. This approach can potentially lead to quicker and more efficient hiring decisions.

Yet, for many jobseekers, particularly those coming from underpaid roles or industries, this disclosure can be a double-edge sword. Revealing past salaries could unintentionally anchor future offers to lower rates, reinforcing wage disparities that may persist from previous roles. For instance, a study by the US Bureau of Labour Statistics in 2023 found that women continue to earn less than men, with the gender pay gap widening in recent years. By disclosing their past salaries, women risk anchoring their negotiations to lower figures, perpetuating the gender pay gap.

Furthermore, past salaries may not accurately reflect an individual’s current market value or the skills they bring to the table. Factors such as job responsibilities, industry standards, and economic conditions can influence salary ranges over time.

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In Asia, some organisations are beginning to lean towards salary band disclosures, where job postings indicate a range, allowing candidates to assess fit without sharing past earnings. This approach is gaining traction, particularly as organisations place more emphasis on pay equity. Candidates who are asked about their salary history might consider discussing their desired range or highlighting growth areas they can bring to the role. A survey by Milieu Insight also found that nearly 80% of respondents in South-East Asia believe pay transparency could enhance an organisation’s attractiveness and help address pay gaps.

For jobseekers, the choice of whether to disclose past salary largely depends on individual priorities and their read of the organisation’s culture. Some may find that being transparent speeds up negotiations, while others prefer to keep past earnings private to focus on their skills and role fit.

As the job market continues to evolve, the debate around salary history disclosure remains a hot topic. Should jobseekers reveal their past earnings, or should they focus on their future value and market rates? The choice is yours. HRM Asia is now conducting a poll on LinkedIn to gauge industry sentiment. To participate, click here.