Your Salary & The Illusion Of ‘Market Rate’

by Annabel Corcoran on 27 October 2016

I often see posts on LinkedIn with advice on why you should NEVER disclose your current salary or salary history. These posts can prove frustrating for several reasons, predominately because many focus on you looking to secure ‘market rate’ and not appropriately taking into account the competition you’re up against.  

In many sectors the concept of 'market rate' doesn't really exist - especially in senior level positions - because most of the time those with the same number of years' experience are NOT worth the same amount due to various factors. I’m not saying you necessarily have to always disclose your current salary, but adamantly refusing under any circumstance to reveal it (even confidentially to a recruitment consultant aiding you in your job search) may in fact, prove detrimental.

How can you determine your worth?

Reasons for difference in salary can include: number of years’ experience; additional duties (i.e. training staff, supervising etc.); billings figures; stature/success of current employer; quality of work you’re dealing with; your business development skills; client following; and your overall competency in the role – to just name a few. The last point is particularly difficult for many to grasp, as you can’t possibly know the calibre of the other applicants and how you compare.

Furthermore, as soon as a salary bracket is disclosed (if there is one), can you guess what happens? Nine times out of ten an individual will then immediately state they will take ‘no less’ than the top end of that bracket, regardless of level of experience or suitability for the role (even when advised against it). If working with a recruitment consultant, the more information you provide the easier it is for you to utilise the consultant’s market knowledge and experience. Accordingly, without knowing current salary it may be difficult to advise you, as unfortunately not everyone is 100% honest about their successes in other aspects of their current and previous roles.

Consider the competition

So what happens when someone is looking for an [unrealistic] salary increase of £20,000? This can cause you to actually miss out on a substantial increase of say, £10,000, simply because you have priced yourself out of the market.

As an example (a very rough one): if two individuals think the salary for a role is £50,000, they will likely both state they're looking for no less than this figure.

Individual 1 is on £30,000 currently and is billing £100,000. Individual 2 is on £45,000 and billing £160,000 – both are achieving billings figures of over 3 times salary. However, both candidates have stated they are looking for £50,000, as they believe this is ‘market rate’. So, if the hiring manager meets and likes both candidates, they will see that they both want the same amount of money; Individual 2 is performing a lot better and is therefore immediately better value for money. If Individual 1 didn’t state that they were looking for a minimum of what they believe to be ‘market rate’, they would have had a much better chance of securing the job whilst STILL receiving a large uplift on salary.

Asking for your current salary is not aimed at enabling a company to pay you the lowest amount; it's usually to gauge an indication of actual worth, and it gives those on a lower salary a better chance of securing a job and a large uplift in salary.

I have come across those that refuse to disclose current salary and only provide their ‘minimum’ expectations, and these same individuals have then enquired about certain companies/vacancies and why they haven’t been alerted to them. When my response is due to their salary expectations being much higher than the role offers, I have been met with ‘Oh, well I would have taken that as it’s still a big uplift on my current salary’!! If you’re cagey from the outset, it becomes very difficult to provide advice thereafter and it makes the process more difficult for all parties.

Honesty & building rapport

Some companies require your current salary before progressing your application, whether that’s through a direct application or through a recruitment consultant. Some posts advise you should avoid and immediately withdraw applications from these companies – why?! If the role and company is right for you and would be a good move, no longer considering them due to this is extremely counter-productive for your career development.

Building rapport is vital and refusing to disclose salary can spark suspicion from your potential new employer, leading some to believe you’ve been dishonest about your accomplishments (even if you haven’t).

The worst thing you can do, however, is to lie about your current salary! Bear in mind that your new employer will receive your P45, and when they notice your dishonesty they have grounds to terminate your employment – I’ve seen it happen! Just don’t do it.

Higher salary = higher expectations

Please also note that if you’re in a position where you’re required to reach targets, it’s imperative that you realise that higher salaries will always come with added responsibility and higher targets. If you have negotiated a much higher salary for yourself than your previous one, you may find that you are not capable of reaching your new targets or responsibilities, thus causing added stress and the possibility of termination (or redundancy, if you’re building up your own work load completely). There’s lots to consider – remember, mo’ money mo’ problems!

Disclose your current salary to the right people

Your current salary is confidential and I agree you definitely shouldn’t disclose this information to anyone and everyone! When I speak to a candidate and the first question is ‘what is the salary?’ this immediately sets off alarm bells for me. In the same respect, if the first question you are asked is ‘what’s your current salary?’ it may be wise to avoid disclosing it. Disclosing your current salary to the right people, however, enables you to utilise the experience of those with strong market knowledge and can help you to secure your ideal role. 

Outside of the public sector, companies very rarely work to exact salary brackets. If you are looking for a new job, please don’t price yourself out of the market due to what you THINK ‘market rate’ is. Also make sure you take bonus/commission schemes and benefits into account, as these can make a huge difference to your total remuneration package.

Side note: I often see posts bashing recruitment consultants and claiming they ‘swindle’ you out of money. Recruitment consultants working for an agency on permanent hires will never try and place you in a role for lower than your worth, not only as we’re here to help you, but also because a lower salary directly affects us too. The higher the salary for you, the better the outcome for the consultant. Anyone that tries to tell you that an agency is trying to swindle you to take less money is, quite frankly, talking rubbish!  If you would like to have a confidential discussion about your job search in the legal sector please contact Annabel Corcoran at G2 Legal.

T: 0207 649 9296, E: annabel.corcoran@g2legal.com

About the author

Annabel places high calibre, qualified legal professionals into practices based in the City & West End. Experienced in assisting with hires from NQ to senior partner level within small boutiques, mid-sized practices, and large international law firms.