How & Why Your Current CTC Is Not Needed In Interviews
With the advent of opening up of any country’s economy and new companies coming in & investing, lots of job opportunities get created. This also means more interview calls to choose from and a chance to upgrade your skills and CTC of course 🙂
Lets say in the last 10 years, how many interviews have we been through ? No matter what, the one question that has intrigued me really in this: “What’s your present CTC Shaunak ?” And I use to tell them the correct figure. Next question: “What is it that you are expecting ?” And I used to quote XYZ amount. But deep down, I am a little confused on these 2 questions. Why do the interviewers need this piece of information ? I feel more than 70% of the HR professionals who almost always monotonously ask this question to the job seekers, may not be able to convince themselves if questioned or interrogated !
See how funny & interesting this situation got when I decided to debate & tried to seek the reasons from one of the senior HR personnel (I was the job seeker & the HR personnel was the interviewer):
Richa: Well, it looks Shaunak that you really suit this Plant HR Manager position we have in Pune. Glad that we found you so quickly and could proceed with you so fast !
Shaunak: Yeah, sometimes things happen for a reason. Glad that you think so.
Richa: Well then, we can’t really move ahead unless we discuss your compensation, can we ? 😉
Richa: So, may I know your present CTC per annum ?
Shaunak: Yeah, it’s 12 Lacs PA. I have mentioned that in the form but… just to discuss this a little bit – Why do you need this information ?
Richa: (Eye brows suddenly get wider, looking towards Shaunak with a mix of confusion and embarrasment in the air) Sorry ???
Shaunak: No really, I really want to know the logic of asking the present salary ? Although I am an HR Manager myself and have been on the other side of the table a number of times and almost monotonously asked this question to a lot of job seekers, still… Might as well be that I carried on asking this question just for the sake of asking, I think !
Richa: (No reaction)
Shaunak: So, just wanted to understand logic of somebody senior, somebody more professional and experienced and I shall appreciate a different view point.
Richa: Look, I admit this question has taken me with a bit of a surprise but very simply, unless I know your present CTC, how can we move forward ?
Shaunak: What’s the Company’s budgeted CTC for this position ?
Richa: Up to INR 18 Lacs PA Max
Shaunak: Exactly, so now you got a budget for this position. There is no way an HR professional will cross that mark. Infact, the HR has learned it right to find the best possible candidate at lowest possible cost. So, when the budget is 18 Lacs PA, why do you need my existing salary ?
Richa: Shaunak, we need to discuss on your expectations & fitment and that’s why I need to know your present level of pay. (Looking at my form and now trying to curb this conversation) So, I understand that you are presently at INR 12 Lacs PA. So, what is your expectation ?
Shaunak: INR 18 Lacs PA
Richa: Whoa ! That’s 50 % hike, do you think it is as per market standard ?
Shaunak: See ! Again we are coming to the same point ! This 50 % calculation has come only when you came to know my present salary. Why do you consider this figure ? Rather, why not proceed like this – Am I worth 18 Lacs ?
Richa: Sorry, I don’t get this ????
Shaunak: Simple Madam, in your opinion, am I worth 18 Lacs ? Very politely, would like to know your assessment of me. This 50 % figure is mathematically correct but not entirely correct. Had my salary been 15 Lacs today & my expectation being 18 Lacs, you would have agreed to hire me, more or less, w/o much thought. But just because I am at 3 Lacs less, why should your assessment change ? My interview, the questions asked and your assessment (prior to discussing salary) – everything was based on technical competence, knowledge, situational understanding and maturity… such parameters. But they were not aligned to salary. It is not as if somebody is at 10 Lacs, he has to have X maturity and if other has 15 Lacs, he has to have 2X maturity. It isn’t like that. Is it ? Once anybody is okay on the parameters you judged him on, we generally assume in good faith that he is very likely to do most justice to the position in question. If so, again we are back to square one – why present salary is required, why proof of that salary is required ?
Richa: So, how did things happen at your present employer ? How did your present employer decide and come to conclusion on the salary to be offered to you ?
Shaunak: (She caught me here somewhere, I felt) Well, exactly like it happens elsewhere. At that point in time, around 3 years back, this didn’t strike me though. I have been seriously thinking on this view from the last 6 months. And I want to understand the logic.
Richa: Companies would want to know your present salary, how much they offered you at the beginning, the base as well as the kind of increments you got over the years, so it helps them understand your performance. And we would also like to consider that as some figure to comprehend in our minds for calculations.
Shaunak: But why should somebody be benchmarked (read penalised) for some other person’s judgment, with my due respects to him. That HR Head could have offered me even 15 % more than what he actually did. Yes, he would not have crossed the budget. May be the candidate was in need of a job, any job within that city, lets say, for his urgent family reasons and hence he accepted the 10% hike that was offered, whereas the HR Head had a room to play for another 15 % at his disposal, and still not crossing the budget. And this 10 % hike that the person got, doesn’t determine that there is lack of technical competence on the candidate’s part.
Long pause and there is a pin drop silence in the room.
Shaunak: See, you hire a candidate only & only when he has all the technical & behavioural competencies and when his CTC doesn’t already cross over your budget CTC. If, in your fair assessment, you don’t see him gelling here (as I would like to put it politely), you will never take him in, no matter what low salary hike he is asking for. So, if you perceive me as the best from all those you interviewed, why bother about knowing present salary and then negotiating. Why not pay 18 Lacs instead and close the issue !
Richa: So then, tomorrow if I call a candidate of 17 Lacs and if I perceive him as worth say 25 Lacs, should companies raise their budget ?
Shaunak: Agreed 100% but then let’s not call them at all. Keep a cushion. Keep a wide cushion. A candidate with 17 Lacs pay can be worth 22 Lacs, possible that he doesn’t know his own market value. Possible that he may not be keen on knowing as well. But a candidate with 10 Lacs CTC can never be worth 22 Lacs suddenly. So the HR consultants that you deploy the work to, may be given a possible range and they may be asked to call candidates from that range. But once the candidates are shortlisted, why present salary should be asked and why negotiation should be done ? If they are worth 18 Lacs or so, let’s pay them that, else don’t take them.
Richa: Shaunak look, I need to close this position pretty fast and I just want to know if you are willing to come on board at….
Ultimately, it didn’t convince her. May be I wasn’t able to. May be she wanted to follow the protocols set and as expected, I didn’t join this company. It was a great company known for good people practices, good pay hikes and overall reputation. And yes, Richa was a good lady too. She didn’t get offended and was atleast willing to have a word. She finally quoted 27% hike over my present salary. Had I accepted, she would have been my senior and I was expected to work with her and travel with her quite a few times all over India and I think I would have gelled with her. But I was not a very active job seeker at that time, so may be I wanted to go in for some big money and hence, this different concept.
But Richa & I remain friends and hey Richa, if you ever read this… thank you for taking that part of the conversation so positively.
Sometimes, things really happen for a reason 🙂