Women are paid less if they refuse to share their salary history – study

Banning the salary history question is not a “silver bullet” for alleviating the gender pay gap

Women are paid less if they refuse to share their salary history – study
It pays to keep mum about your salary history during a job interview – if you’re a man. A woman who declines to share her salary history when asked is paid 1.8% less on average than a woman who was asked and did disclose, according to recent research by PayScale.

On the other hand, a man who refuses to disclose his salary history is paid 1.2% more on average.

“We were surprised to see the data pertaining to the gender pay gap which shows that refusing to provide salary history doesn't improve the odds of fair pay for women, but –  in fact –  has a negative impact," said Lydia Frank, vice president of content Strategy at PayScale. Results came from an April to June 2017 survey of 15, 413 PayScale users in the US.

The survey also found that almost half (43%) were asked about salary history in job interviews, but less than a quarter (23%) of candidates refused to their disclose it. Professionals in the finance and insurance industry were most likely to be asked, while HR professionals were most likely to provide the salary information if asked.

The findings are a setback to recent legislation in the US aimed at closing the gender pay gap. Last April, the New York City Council passed a local bill that prohibits employers from asking about job candidates’ salary history during all stages of the employment process.

The Council’s summary of the bill said the gender pay gap is perpetuated when employers rely on salary histories to determine compensation. “Adopting measures like this bill can reduce the likelihood that women will be prejudiced by prior salary levels and help break the cycle of gender pay inequity.”

Starting July 2018, employers all over Massachusetts will be prohibited from requiring applicants to provide their salary history before receiving a formal job offer. Employees in the state will also be free to discuss their salaries with colleagues.

According to Frank studies on unconscious bias show that women pay a “social cost” when they advocate for themselves in negotiation situations, because it deviates from expected gender norms.
“In this instance, managers or recruiters may be reacting differently when women and men refuse to disclose salary history when asked. It's also possible that even when women keep a low pay number to themselves, they're not asking for as much during the negotiation process as their male counterparts,” she said.

“Women should ensure they know the current market value of the position before starting any pay negotiation and take extra care not to let their previous salary negatively influence the monetary worth they place on their own skillset."

At the current pace, developed markets would close the gender pay gap by 2080, while developing markets would do so by 2168, according to research by Accenture.

Its poll of over 28,000 women and men across 29 different countries found that a woman earns an average US$100 for every US$140 a man earns. The imbalance is exacerbated by results showing that women are less likely than men to have paid work (50% and 76% respectively).

“This contributes to a hidden pay gap that increases the economic inequities between men and women: for every [US]$100 a woman earns, a man earns [US]$258,” the report said.

Frank called on employers to use market data and to ensure their offers are consistent with the company's compensation philosophy and practices. “In the long run, if compensation is misaligned with the talent market, the employer ends up with pay inequities that are not defensible, employees feel unfairly treated and talent retention becomes a critical problem."

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