Why do recruiters and employers ask about salary and your expectations?

Updated: Dec 7, 2020

At some point during your interview, the recruiter or employer will ask one of the most uncomfortable and dreaded questions of all:

"How much were you compensated in your previous position?"

"What is your current salary?"

"What are you looking for in terms of salary?"

"What are you expecting?"

"What are your salary expectations?"

Any question about salary can be difficult to answer if you do not know what to say and what not to say.

Read on to understand why companies do that (because not all of them are trying to lowball) and find out how you can handle the conversation without hurting your chances of getting a job.

Why companies are interested to know about your salary history and expectations

Ever wonder why questions about salary are usually asked very early on in the hiring process, as part of the application or during an interview?

It's simple. Before the employer advances you to the next stage of their hiring process, they need to know 4 things to not waste yours and their time:

  1. How you value your work and how urgent you are to make a career move.

  2. That the role is being pursued with mutual expectations.

  3. Your salary range is within budget for the role. If it isn't, how much more is it?

  4. That they can make a better offer than your last/current compensation to convince you to join them.

Here are 5 very potential scenarios that you may encounter during job changes when the prospective employer is assessing your salary:

Scenario 1

If your last drawn salary is high and expected salary is low, it is likely because you are a career switcher and that you value other aspects of the job more than money.

Depending on the level flexibility of the job, some companies are open to providing opportunities with a junior role or lower salary. If not, you may get screened out.

Scenario 2

If your last drawn salary and expected salary is too high, you may get screened out because they don't want to pay that much, or because they assume that you won't be happy working for lesser money.

Scenario 3

If your last drawn and expected salary is low, there is a chance that you might get lowballed or screened out because they do not want to (or can't) go beneath the salary range for the position.

Scenario 4

If your expected salary is 15%-20% more than your last drawn salary, employers would want to figure out the disparity and understand why you are asking for such a raise.

Are you just looking to make a quick jump for a salary bump or looking for fairer compensation?

Scenario 5

When your last drawn and expected salary is within an acceptable range, this makes for an ideal and reasonable match.

If other aspects of your profile matches to the job and your initial interviews went well, you are likely to be progressed to the next hiring stage and get an offer.

Is it legal to be asked about your salary?

Yes, it is legal for companies in Singapore to ask about your salary and request for your latest payslips to verify your previous salary.

However, there is also no rule that job applicants have to reveal last drawn salary and employers cannot insist on it.

You might be thinking, "If it is not legal for employers to ask about salary or insist on revealing my last drawn salary, I can avoid answering the question."

Well, it depends on how you navigate the conversation without having to disclose details. Read our guide on answering (and how not to answer) questions about salary.

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