Tag Archives: real estate

A Future Without Salary History

Now late-February, the annual January hiring kickoff is (hopefully) starting to translate to some promising resume submissions and candidate interview scheduling. Unemployment remains low and the market favors job-seekers, so those of us driving the hiring process already have our work cut out for us to find and attract in-demand talent. And increasingly, there’s another hurdle on our minds: Salary History Bans.

Why Ban Salary History?

Broadly speaking, salary history bans are policies that prevent employers from asking potential employees questions about their past salaries, benefits, and compensation as a basis for a new pay package. Salary history bans are increasingly impacting hiring practices in major real estate sector markets, including California and New York. Bans now affect hiring practices in 17 states and 20 localities, according to a running tally by HR Drive. More are slated to enact bans in the coming months, and several others are altering the terms of their existing policies. Last month, New York and New Jersey revised their statewide bans to cover all employers, expanding from hiring for governmental agencies. Last week, Philadelphia courts upheld the city’s ban despite pushback from local employers.

Salary history bans alleviate some potential awkwardness regarding compensation during the interview process. But their intended function is even more important: Salary history bans are designed to help to close the wage gap. Women and minorities often earn less than their male and/or white colleagues in equivalent positions, even when accounting for education levels and on-the-job experience. In real estate-adjacent industries, pay equality can be especially complicated.

If you caught our Pink Collar blog on women in the title insurance sector, you might remember that while women make up 74% of the production forces, they earn less than the median wage across the board. As we’re in the middle of Black History Month, it seems especially important to remember that redlining, or historically discriminatory housing and lending policies, hugely impacted the mortgage and housing space—not to mention the consequences that may have had for hiring in our sector.

Salary history bans are aimed at alleviating multiple sources of the wage gap, including historic stigma that female- or minority-dominated jobs intrinsically have less value. As Harvard scholar Laura Adler noted in her 2019 talk for the American Sociological Society, “the use of past salary can entrench inequalities over the course of the career.” That is, low past wages provide a lower baseline for future wages.

We also naturally imbue salary history with meaning—sometimes that a low wage signifies low productivity or skill-value in a potential employee. But even this perception can be skewed—especially when comparing the compensation capabilities of major corporations to stand-alone title shops or real estate brokerages.

If Not Salary History, Then What?

The bottom line is that there’s a reasonable case that salary history questions are, at least, problematic. On the other hand, asking about compensation history has been—and often still is—an important part of how we gauge a candidate’s fit. With 37 jurisdictions and counting enacting bans, we’re increasingly likely to run up against them in our hiring processes. The bans likely mean some strategic restructuring in how we approach the interview and compensation process. Promisingly, an emerging body of research suggests salary history bans benefit employers as well as employees. But how do we deal with salary history bans and the gap they might leave in our interview questions?

  1. Be Consistent and Transparent

Though it may seem like common sense, having regular and open compensation guidelines in place is still considered best practice by many. One such approach might be to adopt a tiered system for determining pay based on experience or instituting a company-wide benefits summary. Such resources can give both employers and employees a consistent reference for the interview process and beyond and may even reinforce equal pay for equal work and experience. With compensation policies spelled out, compensation can be related to an internal standard, rather than an external one like salary history. Even if such resources aren’t the right choice for your business, continuing to track how you uphold equal pay for equal work can still help to promote a healthy work environment for you and your employees.

  1. Take the Proactive Approach

Even as salary history bans become more popular, there are still more than 30 states and countless localities that haven’t adopted such policies. In fact, Michigan and Wisconsin have bans against salary history bans. However, even if your locality hasn’t yet instituted a ban, there’s a decent chance you might run up against one elsewhere, as employees increasingly relocate for or telecommute to work and as large corporations do business across multiple states or cities. Taking a proactive stance and removing the salary history question out of your interview process before its mandated can potentially cut down on confusion for you and anxiety for interviewing candidates. And if a salary history ban does find its way to you, your process will already be revised for the change!

  1. Ask Better Questions

As MarketWatch summarized in a January article, some promising early research has shown that employers screen their candidates much more meaningfully when they aren’t able to draw conclusions about skills based on past compensation. One of our go-to alternatives is, “What motivates you in the workplace?”—which may organically reveal compensation needs, but will hopefully encourage more meaningful reflections about what a candidate needs in order to be successful. Asking several open-ended questions encourages a candidate to more thoroughly illustrate their personality and their skillset. This can translate to a better fit for your team and your budget. Instead of focusing on a salary history ban as a restriction, it might be better to think about it as an opportunity to get to ask better questions.

  1. Know The Market

With resources like Glassdoor, PayScale, and LinkedIn increasingly offering salary insights, quick access to average salaries is easier than ever. These tools and many others can factor education, experience, and local cost-of-living in to general salary expectations for the role. Coupled with knowledge about the company’s compensation abilities and a general sense of going prices for a position, salary can be determined from a broader, more scientific source than a candidate’s personal experience. And this tip works for candidates, too! One of the most powerful pieces of information for a candidate to take to an interview is a knowledge of their market worth. Knowing how your salary—or desired salary—lines up with the going-rate can be an excellent negotiating tool; it takes some of the onus off of their personal background and puts it on the market itself.

Overall, the fine print of each salary history ban varies by jurisdiction. But in general, they prevent employers from asking potential employees about their prior compensation—including salary and benefits—in order to establish a baseline for their new pay. For now, salary history bans are here to stay. Taking an intentional and open-minded approach to the bans can be beneficial for your company, your hiring process, and all potential (and current!) employees. They’re intended to be a positive corrective to social inequality, and using these four tips can help you to be part of the solution.


The Gift of Holiday Hiring

The holidays often bring warm thoughts of family, celebrations—and some hard-earned time off. In the land title insurance, settlement, and appraisal industries, we see this season as a time to close the books on a year well-done. Office parties take the place of team meetings; we wrap up both projects and presents. We sometimes leave many new challenges for the New Year—including hiring.

If you push hiring to the bottom of your To-Do list, you’re not alone. It’s common for both companies and candidates to slow down their job searches at the end of the year, even though many business writers like Debra Donston-Miller of Ladders advise against it.

After all, the breaks that the end of the year promises also come with the final push to meet quarterly benchmarks, set new goals, and finalize future budgets. A lot of stress can come with that holiday cheer!

But it’s also true that the New Year rush to hire floods the market with both jobs and job-seekers. Instead of thinking of winter as a time to put a freeze on hiring, consider six reasons to warm up to holiday hiring:

1. Seasons’ Greetings and Budget Meetings

A new hire is an investment in the health and talent of a team.

Throughout the Real Estate and Financial sectors, the end of the calendar year usually means it’s time to re-budget. New hires can be a big factor in the layout of your financial plan. But it’s nearly impossible to get an accurate picture of your finances or your hiring capability without having a sense of what your team will look like in the new year. Starting the hiring process early can eliminate some of the financial surprise expected in bringing on new personnel.

Spending a little more can mean high returns in productivity and revenue long after the holiday season ends. You can set your team up for success and growth on the very first day of the new year by finding a new leader early.

2. New Year. New You. New Hire.

Resolution Season can prime people for change, even if they aren’t actively job-hunting.

The culture of making resolutions and the symbolic power of the New Year can influence us even if we don’t plan on making a formal resolution. This can be good for businesses looking for top talent when unemployment is at a 10-year low. The open-mindedness and good-will associated with the season can make even passive candidates more receptive to change.

Just as businesses use this time to budget, individuals are also thinking about meeting financial goals. Maybe unsurprisingly, 53% of resolutions involve saving money. Even for high-earners, the holidays can come with a huge price tag. There are donations to make, gifts to buy, and travel arrangements to book. A new job, better benefits, higher pay, or even a shorter commute can all appeal to goals for saving.

3. All I Want for Christmas is an Em-ploy-ee

Holiday hiring puts you in front of top talent first.

Low unemployment rates are driving up the competition to find quality workers. Top talent is tied down across the board in title insurance, appraisal, and settlement. The executive and managerial levels are especially tight, with only 2% of leadership candidates unemployed at this time last year.

However, you can get an edge in the candidate search by leveraging holiday time. The reality is that many companies do slow down hiring, despite expert advice not to. This can be to your advantage. Holiday hiring puts you on candidates’ radar long before the traditional mid-January job rush. With fewer companies competing for candidates at once, you can make meaningful, lower-pressure connections with the best people.

4. There’s No Place Like Home for the Holidays

The hiring process takes time, and the holidays build in plenty of it.

The holidays offer a decent amount of flexibility, between office closures and project completions. Candidates are more likely to be able to take time away for interviews without compromising their normal work. Furthermore, Glassdoor found that over half of workers only use up “about half” of their vacation time. Vacation accrual not only allows for flexibility to interview. It also offers candidates a good reason to submit their resignation early in order to start fresh in a new role.

5. It’s Snow Time for Home-Buying

During the winter slowdown, new executives have a chance to fully settle-in with their teams.

The real estate market typically shows the least activity between October and February. This also slows down title insurance, settlement, and appraisal needs. It may seem strange to take on new employees during the off-season. But it takes time to onboard and to acclimate to company culture take time. Even the most adaptable leaders often face an adjustment period with new teams and office environments. You can capitalize on the holiday season as a chance to give new leaders time to hit their stride before peak season. And you won’t be as likely to use valuable resources to hire, onboard, or train during the summer rush.

6. 8 Days of Hanukkah, 36 Days of Hiring

By moderate estimates, it takes 36 days to hire someone.

At the executive level, this timeline easily increases to 45-90+ days to allow for market research and the vetting of high-quality candidates. If you wait until January 1 to start a talent search, you may not have the position filled until March or later.

While this timeline can be daunting, any progress is still progress. Using the holidays to work for you starts the hiring process earlier than for those companies that wait until after New Year’s Day. Holiday hiring helps you beat the January rush and moves up the likely timeline for placement.

The Bow on it All:

Holiday hiring can give you an advantage over competitors. Top talent is in extremely high demand. Getting an early start on hiring can match you with executives before the New Year hiring thaw and jumpstart your returns at the closing table. And if resources are tight during the seasonal bustle, there are other ways to help you cross “Holiday Hiring” off your Wishlist. Networking at holiday parties, interviewing digitally, or even partnering with a trusted third-party recruiter can all be ways to capitalize on the holidays without added stress. No matter how you use holiday hiring, think of it as the best business gift you can give yourself.