Last week, Aditya interviewed himself for a Corporate Strategy position in a fast-growing chemicals major. He cleared multiple levels of interviews, aced the Case Study round like a pro and met the owners as well. They said they would be delighted to have him on board.
All went well till they communicated the compensation part. They made a spot offer and offered a 20% hike on his existing salary.
That was the deal-breaker
Aditya’s point of view was that why should his existing salary matter at all in the first place and he articulated the same clearly to the company.
They must assess his worth basis the position he was being hired for and thus offer him a fair number basis the same
But they were so fixated by the existing base that they just couldn’t reconcile themselves to paying more than that 20% hike
Isn’t that a very common situation in most corporates
They ask you your CTC (Fixed and Variable) as a compulsory question in the application form. Should they decide to go ahead with your candidature,they will offer a % hike on your existing base.
The moot question is Why?
Its like the HR saying
We need your current salary, because we have no idea how to assess your value ourselves. We are trusting that the other company knew what they were doing by paying that person that much. While the fact of the matter is that the person may or may not be worth it.”
A candidate’s existing salary may be lower than market standards because of multiple reasons. Some of them could be :
a) Maternity break
b) Economic recession playing spoilsport during the candidate’s CA/MBA campus placement season
c) His/her relocating to hometown due to family exigencies at an exploitative salary , often at a 50% cut.
If you set salaries for new hires using their previous pay as a base line, the one who were underpaid in their first job, will continue to be underpaid in every job after that…forever.
Is perpetuating the wage gap fair?
Isn’t it the right time to let go of this traditional frame/mental model and allow candidates to keep their salary information confidential
What are your views on this??