Latest / Hiring & Firing with Fexingo: Recruitment, Performance, and Workforce Decisions / Why Asking for Salary History Hurts Your Hiring
Transcript
- Lucas: So, Luna, I want to start with a question that still comes up in almost every hiring process: 'What was your previous salary?' Luna: Right. The classic salary history question. I've been asked that more times than I can count. Lucas: And it's a question that, as of July 2026, is actually illegal in about a dozen states — including California, Massachusetts, and New York. But even where it's legal, I'd argue it's one of the worst questions you can ask. Luna: Why? It seems like a straightforward way to gauge what you can afford. Lucas: Here's the problem: when you anchor on past pay, you're importing the biases and inequalities from a candidate's previous employer. If someone was underpaid at their last job — maybe because of gender or race — you're perpetuating that gap. Research from the National Bureau of Economic Research shows that salary history questions explain roughly 20 percent of the gender pay gap. Luna: That's a big number. So by asking, you're literally baking in past discrimination. Lucas: Exactly. And there's another angle: candidates who know they were underpaid might lowball themselves. Meanwhile, candidates who were overpaid — or who are just better negotiators — get an inflated anchor. You're not measuring the role's value; you're measuring their previous employer's generosity, or lack thereof. Luna: So what should you ask instead? Lucas: Focus on the role. Ask about salary expectations for this position. That shifts the conversation from 'what did you make?' to 'what is this job worth?' It's a subtle switch, but it changes the entire dynamic. Luna: I want to come back to that. But first, you mentioned the gender pay gap — is there data on how salary history bans have actually affected hiring? Luna: I know there's been pushback from some employers who say it just moves the negotiation elsewhere. Lucas: There's a great case study from a tech company in Massachusetts that banned the question voluntarily back in 2018, before the state law. They tracked outcomes over two years. What they found: the proportion of women hired increased by 15 percent, and average starting salaries for women rose 8 percent relative to men. They also saw no increase in time to hire. Luna: Fifteen percent more women — that's a meaningful shift. And it didn't slow down the process. Lucas: Right. And here's the thing — if you're a company that values diversity and equity, this is one of the lowest-effort changes you can make. You just remove one question from your interview process. No software change, no new training, just stop asking. Luna: But some recruiters argue that knowing past salary helps them set realistic expectations. If a candidate is making way above your range, isn't it better to know early? Lucas: That's a fair point, but you can get that same information by asking 'What are your salary expectations?' If they say something way above your range, you have the same signal. And if they say something below, you have the opportunity to be transparent and offer market rate — which builds trust. Luna: That's a good segue into something I read recently. A study from 2025 found that candidates who refuse to disclose salary history are often more skilled negotiators — they know the question is a trap. But they're also more likely to be screened out early in the process. Lucas: That's fascinating. So by asking the question, you're systematically filtering out people who are better at advocating for themselves. That seems like a terrible signal to eliminate. Luna: Exactly. And it's not just about gender — there's evidence it hurts candidates who've made career changes or had gaps in employment. Their salary history might not reflect their current potential. Lucas: Yeah, if someone took a pay cut to switch industries or moved for family reasons, their past salary is misleading. You could miss out on a great hire because their number didn't fit your preconceptions. Luna: So we've talked about the problems. Let's get practical. How does a company actually implement a no salary history policy? Lucas: First, train your recruiters and hiring managers. Explain the 'why' — tie it to equity and talent quality. Second, remove the question from all application forms and interview guides. Third, if a candidate volunteers their past salary, politely redirect: 'Thanks for sharing, but we base offers on the role's market value, not your history.' Luna: What about states where it's still legal? Should companies still ban it on their own? Lucas: Absolutely. We've seen that voluntary bans work just as well. And it's becoming a competitive advantage — candidates are more aware of these issues. A 2026 Glassdoor survey found that 67 percent of job seekers say they'd be less likely to apply to a company that asks for salary history. Luna: Wow, that's a clear signal. Companies that keep the question are actively repelling talent. Lucas: Right. And look, I know some listeners might be thinking, 'But what if a candidate's past salary is the only data point I have?' That's lazy hiring. Do market research. Use salary surveys. Benchmark the role against similar positions at competitors. You don't need their history to know what the job is worth. Luna: So the takeaway is: stop asking about salary history, start focusing on the role's value. Lucas: Exactly. And if you're a candidate listening, know that you don't have to answer that question. Even where it's legal, you can say, 'I'd prefer to focus on the value I can bring to this role, and I'm sure we can find a number that works.' That's a power move. Luna: I like that. It shifts the negotiation from defensive to collaborative. Lucas: So next time you're hiring, consider dropping that question. You might be surprised at the talent you find — and the equity you build. Luna: And if you're a candidate, you now have a script to handle it. Lucas: That's a good place to wrap. Thanks for the conversation, Luna. Luna: Thanks, Lucas. Great topic.