The asset management industry has largely embraced new laws in several cities and states that prohibit employers from inquiring about the salary history of job candidates.
And even in places where there are no salary history bans, firms have instituted internal policies in an effort to keep pace with the movement, recruiters say.
Since last year, California, Delaware and Massachusetts have joined the list of areas with tightened recruitment requirements. New York City passed a similar ban, which became effective a little more than a year ago, in an effort to deter unequal pay practices hindering women and minorities.
While some money managers continue to ask salary history questions, where they are still legally permitted, job candidates increasingly have become empowered as recruitment standards have changed and are opting not to share such information, even when asked, according to one recruiter.
"Many of our (asset manager) clients have made a firmwide or global change," to do away with salary history questions, said Amanda Grant, managing partner at executive recruiter Third Street Partners, New York.
However, "there are still firms asking when they can," Ms. Grant added.
"But more and more folks are not sharing even when they can. We've definitely seen a particular pool of candidates opting out of disclosing (salary history) and focusing more on what their expectations would be of a new company."
While the compensation laws aim to chip away at pay gaps affecting gender and ethnic minorities across industries, the legislation also has been useful for other cohorts looking for new job prospects.
Individuals in the later stages of their careers in asset management have often opted out of disclosing current or past salaries, Ms. Grant said.
"They are often perceived by that new company as being too experienced and potentially too expensive," she explained
Long-tenured employees typically are paid 20% to 40% less than new employees hired in a competitive environment, a research paper published this month on unconscious bias found. This pay gap is often seen at highly skilled professional services companies, inclusive of money managers, said recruiter George Wilbanks, managing partner at Wilbanks Partners, Stamford, Conn., who co-authored the paper, "Unconscious Bias in New Hire Compensation: Profitability Expectations vs. Gender Pay Bias," alongside Catherine Verhoff, the former chief diversity officer of PGIM who recently retired from the firm.
The 20% to 40% pay gap that Mr. Wilbanks has seen among long-tenured employees at money managers has been irrespective of position, whether sales or investment roles or among exempt and non-exempt employees (categorizations under the Fair Labor Standards Act differentiating employees who are entitled to overtime pay and minimum wage).
Money managers that fill roles through internal promotions over prolonged periods of time, rather than through external hiring, tend to be exposed to less market data and often "don't keep up with competitive compensation," which can lead to these pay gaps, Mr. Wilbanks said.
Another recruiter has seen that the new salary history laws have "created a level playing field amongst the candidates," and had the biggest impact on junior to midlevel professionals "where you typically see the greatest gaps in terms of compensation for similar positions," said James "Jim" Cooper, managing partner at executive search firm Concentriq LLC, Wenham, Mass.