Ask the Headhunter: Should you tell a recruiter your salary?
In this special Making Sen$e edition of Ask The Headhunter, Nick shares insider advice and contrarian methods about winning and keeping the right job, on one condition: that you, dear Making Sense reader, send Nick your questions about your personal challenges with job hunting, interviewing, networking, resumes, job boards or salary negotiations. No guarantees — just a promise to do his best to offer useful advice.
Question: I have your book, “Keep Your Salary Under Wraps,” which teaches why and how to avoid telling an employer your salary history. And I agree with you: If you disclose your salary when applying for a job, it hurts your ability to negotiate the best job offer. I’ve followed your advice. But now, in “Recruiters Don’t Need Your Salary History — But Here’s Why They Want It,” HR expert Liz Ryan brings up another question: Should you tell a recruiter your salary? She says absolutely not, and hundreds of people have posted their comments. I want to know what you say. Is telling a recruiter your salary different from telling an employer?
Nick Corcodilos: I don’t think you should ever disclose your salary history to any employer. But that’s not what Ryan’s column is about. She’s saying you should never disclose your salary to a recruiter.
Let’s be clear on one thing, because it’s important. When she says don’t tell a recruiter your salary, she makes it clear she’s referring to a third-party recruiter or a headhunter — not a recruiter working in the employer’s HR department. The recruiter she’s talking about will earn a fee if you are hired and also stands to gain tremendously if you’re happy with your job offer and new job. A happy, newly placed candidate refers more great candidates that are worth a lot of money to a good headhunter.
Ryan is wrong, because a headhunter’s motivation is very different from an employer’s. A good headhunter can use your salary history to help you, not hurt you — because the headhunter wants valuable referrals from you after you accept a new job she’s helped you land.
Employers and headhunters have different motives.
Never tell an employer your old salary because he’ll use it to cap any offer he makes to you. In other words, your old salary becomes what’s known in behavioral economics as an anchor. It pulls down the job offer, with seeming justification. It saves the employer money to pay you less.
A headhunter actually earns a higher fee when your job offer is higher, so she is motivated to get you the best offer possible without jeopardizing an offer altogether.
There’s no good reason to give an employer your salary history. The only good reason to tell a headhunter your old salary is if it’s going to help you get a higher job offer. And that’s where Ryan blows it while she bangs the drum to say no. She’s confusing motives, and that’s naïve. There’s more to it.
When to tell a headhunter your salary
Here are my two rules about salary disclosure:
- If it’s an employer asking — the hiring manager, the HR manager, the HR recruiter or the company’s online application form — do not disclose your salary, ever.
- If it’s a headhunter or third party recruiter, disclose your salary only if:
- The headhunter agrees not to disclose it to the employer. No exceptions.
- The headhunter explains how she’s going to use the information for your benefit — and the reason had better be good.
If the headhunter can’t pass those two tests, don’t tell.
While a headhunter is paid by the employer (her client) and thus has a fiduciary duty to get the best deal for the client, the headhunter is also beholden to you if she wants introductions to more good candidates — and a sterling reputation in the professional community she recruits in.
So a good headhunter will not use your salary history to low-ball your job offer for the benefit of her client. If you think she’s going to do that, then walk away immediately — because that’s not a headhunter you want playing middle man for you with any employer.
When Ryan says not to disclose salary to a recruiter, what she should be saying is: Walk away from any headhunter you’re not sure you trust.
And that means most headhunters who solicit you, because they’re not headhunters — they’re unsavory telemarketers dialing for dollars. They will never do a good job for you. Work only with the best or don’t work with a headhunter at all. Satisfy yourself that the headhunter is going to optimize your job offer — and, more importantly, get you in front of the right manager for the right job.
Here’s the advice Ryan left out of her column.
Why disclose your salary to a headhunter?
What good reasons could a good headhunter possibly have for wanting to know your salary?
If it’s me, I want to understand how your career growth and salary growth reflect one another.
- Do I think you’re overpaid? Underpaid?
- Do I think you’re squandering your abilities for too little money?
- Or are you living a fantasy about what you’re going to earn next?
- How does that affect what salary you should be asking for?
I’d rather discuss that with you before you talk with my client, because it could affect how I advise you to interview and negotiate.
Maybe you’re on the wrong career trajectory. You might be earning at the top of the range for, say, a digital design engineer. If you want to be a research and development engineer, you may have to take a step back in salary to shift to the new career direction. I want to prepare you for that. I don’t want you to get sticker shock after you’ve invested your time in interviews with my client.
If you don’t trust a headhunter like you’d trust a doctor to share your personal information, then don’t work with that headhunter.
The 92 percent salary increase
I’ll give you an example of when it pays to tell a headhunter your salary. I recruited a candidate who was earning $40,000. I helped him get a 92 percent salary increase.
He was hoping to get a 10 percent salary bump. After a lot of assessment (including talking with his references and having him talk with an industry expert whose opinion I respected), I knew he’d be great for a very different kind of job with my client.
If I hadn’t asked for his salary history, he’d have blown the interview, because the job paid over $70,000. His jaw would have dropped if this came up in the interview, and he would have betrayed his old salary if only in his mannerisms. My client never would have offered what he was worth. I would have had no idea if I didn’t know the candidate’s salary.
We had a long talk about how to behave while discussing a job that would almost double his salary. Based on the candidate’s aptitude, I negotiated a $77,000 job offer. My client never batted an eye and never learned what its new hire had been earning. The candidate and his wife were able to buy their first house. I earned a nice fee — and several great referrals. The new hire performed so well that I got more search assignments.
I asked for and got the candidate’s salary history — but I never disclosed it. I used it to coach him properly so he could get a better deal.
If you’re not satisfied a headhunter is going to work that way with you, hang up the phone, or delete her email.
It’s up to you to draw a line in the sand.
A headhunter is not an employer. Different rules apply when a job seeker deals with a headhunter. That’s why I wrote a 130-page book about “How to Work with Headhunters, and how to make headhunters work for you.” What I just explained is in the book.
Liz Ryan can offer good advice. This time she is wrong. Her advice to not disclose your salary is reasonable only if you’re dealing with a questionable or unsavory headhunter or recruiter — but in that case, you shouldn’t be working with that recruiter anyway! Just as there are plenty of lousy HR people who will waste your time, there are plenty of unsavory headhunters.
If you’ve properly vetted the headhunter and the headhunter gives you satisfactory answers to the two tests I posed above, you’ll gain a lot by letting the headhunter know your salary history, so she can assess and coach you properly. A good headhunter stands to make a lot of money by helping you get the right job for the best possible salary. And the headhunter’s client never needs to know your old salary.
If you don’t know how to separate good headhunters from unsavory ones, check the nine tips in “The truth about headhunters.”
Dear Readers: Have you ever worked with a headhunter who helped you get a really great new job and salary? How did he or she do it? Maybe you’ve only gotten burned by recruiters — what have you learned from it? How do you tell the goods ones from the unsavory ones?
Nick Corcodilos invites Making Sense readers to subscribe to his free weekly Ask The Headhunter© Newsletter. His in-depth “how to” PDF books are available on his website: “How to Work With Headhunters…and how to make headhunters work for you,” “Keep Your Salary Under Wraps,” “How Can I Change Careers?” and “Fearless Job Hunting.”
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