Interviews are never easy. We often feel like beggars hoping to get a well-paid job. Although this is actually not the reality, especially for tech workers, interviews stress our nerves, make us sweat, and we usually don't feel well doing them. We are constantly graded and evaluated, classified, and then deemed worthy or not. Interviews are full of questions we have all already heard of. There are classics, clever questions, riddles, whiteboarding, and what else.
One of those classics that's asked more and more, especially by recruiters, is the following one:
"What is your current salary?"
This is one of the most critical and morally questionable questions to ask a candidate, and here is how you deal with it.
Before we talk about the question and how to handle it, we need to talk about how the value of work is determined. With this knowledge, you will understand the catch of this question and why answering honestly puts you at a disadvantage. To completely cover a topic as deep as how to value work, it would definitely need a whole article or even a book on its own. We will thus go with a pretty simplified version that gives you at least a basic idea of how it works.
The value of work is individual.
It is partly based on:
in the global, but even more in the local markets.
Chances are high that no two employees doing the same job, even at the same company, are paid the same. Companies earn different amounts of money each month and year. They have different operating costs, and they have different leadership. All businesses, however, have in common that they try to minimize costs while maximizing profits, at least up to a certain extend.
When a company starts to hire, it creates a budget. This is basically what they are willing to pay a new employee for a certain job. This amount is based on experience, supply and demand in the local markets, and more factors. Beginning with a certain salary, there will be interest in a position. Going below and no one will want to work for this company, going too high, and the company gives away too much money they could have spent on other things. This means that a company tries to find a sweet spot to get enough candidates to choose a suitable one from. It only needs one suitable candidate to fill a position—multiple ones to fill multiple positions.
Multiple hires probably won't earn the same. Although a company has a salary range in mind, they will still try to negotiate your pay based on the outcome of the interview, your previous experience, and what you have in mind. If you ask for less than what they had in mind, that's awesome for them.
As you learned, a company that wants to interview you usually has a certain salary or better range in mind. Often, they don't state this range publicly because it would weaken their position for negotiations. And this is where this tricky question comes in. If you currently earn $100k a year, why should they suddenly pay you $150k for a similar job? Stating what you currently earn weakens your own position for all future negotiations. Often, recruiters try to sell you this question because they "need to see whether you fit in the company's salary expectations," but this is largely a stupid excuse. They could easily have asked for your salary expectations then. For a company, it's easy to say that a 50% raise is "too much" and that they "can't see anything that justifies this jump in pay." Suddenly, they have a point to focus on. It doesn't even matter anymore that you are currently underpaid for all the work you do. Even a 20% raise would already be a huge win for you, wouldn't it? No. It wouldn't.
The value of work is subjective and depends on the individual company. The same work you do at company A can bring this company fewer or higher profits than company B. It's not all about you. It's also about their marketing and sales teams, the size of their customer base, their customer's will to pay a certain amount, etc. If company B can sell your work for more than company A, the first one can easily afford to pay you more, even for the same work. It's as easy as that. You deserve a slice of the cake. This is what you show up for every day.
If an honest answer isn't a great option, what then? Circumvent it and state your salary expectations instead. No matter what a recruiter or an interviewer says, don't state your current salary and don't lie about it. Really, please don't lie about it. If you ever happen to tell someone what your previous salary was, and this information finds its way to your manager or HR, there is a slight chance that you won't have an easy time negotiating for a raise in the foreseeable future.
You both (the company and you) want to find a base for further negotiations. If your expectations don't align with the company's, this specific job isn't for you. You might have to look for another job then, but that's still better than underselling yourself in the end. In my experience, everyone who ever honestly gave their current salary away had a way harder time negotiating for a fair salary afterward. This is why you should politely decline to answer this question and offer your salary expectation instead.
"I am sorry, but I think that my current salary is not of interest here. I understand that you need a number to figure out whether our expectations align, though. I can tell you that I currently look for positions that pay in the range of around $140k to $170k. I am sure that we can narrow this down further as soon as we have talked deeper about what your expectations for me are and when I could show you what I am capable of. I believe that you will see that I am well worth this money, and I can promise you not to disappoint during our coming interview rounds. Is this range something you can live with? Do both our expectations align here?"
This is a great example of an answer. It politely declines to talk about your current salary and instead states your own expectations. But it still shows that you respect the company's need to determine whether they are willing to pay enough. It provides a range and not only a single number. This shows them you are willing to negotiate, based on how well you both align. What they expect of you might be different from what your current employer expects. After this, the answer shows that you are self-confident enough to promise to deliver in the interviews. The next important point is that this answer shows confidence that you are worth the money you ask for. It awakens the assumption that you thought about your salary expectations well enough to build this confidence. And lastly, the answer gives an exit. If the company can't live with this amount of money, they are free to decline at this point.
If you doubt that you can decline to answer this question, or if a recruiter or company should ever insist on you telling them your current salary, here is what I have done in the past and would recommend you to do.
Ask them how much they charge one of their large customers on a custom plan. They will most likely decline to answer this question because this is company-internal information. Next, ask them whether they would give this information to another customer if they asked. I can already tell you they would never do that. Custom plans are always negotiated. Why should a company give any customer at least a hint that they might try to charge them more than other customers? Correct. They should and would never. Your current salary is the last customer, and now they want you to give them a hint they would never, themselves, give one of their own customers. This counter-question should make clear that you don't take the bait.
I'd love to count you as my ever-growing group of awesome friends!