California is the latest and largest jurisdiction to ban employers from asking job applicants about their salary history, a move designed to combat wage gaps based on sex and race.
As an entrepreneur for two decades, I have been guilty of this – asking for salary history of applicants before making an offer. As for me, the reason was never about discrimination. It was to save money for the company, which was always short for a small business. The other reasons, as generally believed in India, was that a large percentage increase in salary from an earlier job will set an expectation on future (annual) hikes, and, this process will result in the company attracting only “greedy” candidates. Then, there is the need to reward loyalty – people who believed in your vision on the early days and stayed during the tough times.
All made sense, when I was in the corner office. During my sabbatical now, I am starting to relook on this wide subject, including the practice of “notice” period of 60-90 days followed by most Indian IT Services firms and related HR policies.
For example, regarding the need to reward loyalty and promoting internal talent, we need to use tools like equity, bonus & accelerated promotions. I admire loyalty; but isn’t it time for us to rethink about it?. Integrity is non-negotiable, but should we be giving too much importance to loyalty – after all, we are not recruiting for the army.
Migrating to the new way (simpler) will be painful, more so for small businesses, who have no wherewithal to get a remedy for actions caused by few “bad” apples – but those have to be factored into the cost of doing business and by cross-learnings from others with the help of industry bodies like NASSCOM. We may not have answers for all the challenges these changes may throw up, but I feel its time for the industry and for entrepreneurs to rethink about HR practices for the modern times.