Money, money, money: they say those who have it, don’t talk about it.
While that sentiment is usually reserved for billionaires that wear the same black T-shirt every day, it reveals a critical issue, and an important conversation we should all be having.
Salary transparency is a policy in which employers are open with their current and incoming hires about compensation information, pay ranges, and pay scales. In a nutshell: at a fully transparent company, everyone knows what everyone else is making. It’s a taboo thought, for some—you’ve likely already heard the dated adage that it’s “rude” to talk about what you make with your coworkers. But talking about pay isn’t rude—it’s necessary. Many states and countries around the globe agree.
Now of course, there are plenty of naysayers: lots of employers have been reluctant to adopt this concept. And we’re calling BS, once and for all.
Here are the unspoken reasons salary transparency might give a company the heebie jeebies—and our responses.
Employers are afraid they’ll have to pay you more.
Salary transparency creates an environment in which pay equity is critical. If everyone at a firm knows what everyone else makes, there’s little room to be shady about compensation.
As of 2022, women still earn up to 18% less than men performing the same job — and that percentage skyrockets for women of color. Over the past two decades, the gender pay gap hasn’t moved more than a hair. Why? Because if you don’t have proof you’re being underpaid, it’s harder to fix it.
For employers against salary transparency, the fear could be that around the water cooler, you may discover you’re being compensated far less than someone else doing the same job you are. Staying tight-lipped about salary doesn’t protect anyone’s interests—except for those who want to take advantage of your ignorance.
So, our answer to the naysayers? Yes, salary transparency often means companies have to evaluate their pay scales and amend compensation differences. But, you want to eliminate bias and pay your hardworking employees fairly, anyway. Right?
Employers are afraid you’ll want to work less.
Cue eye roll. One of the wobbliest arguments against pay transparency is that folks will lose the “competitive edge” to succeed. The (misguided) thought is: if an employee finds out that someone higher up the ladder is only being paid slightly more than them, they may lose all drive to seek a promotion.
First: studies have shown that awareness of a company’s pay scale drives workers to be more productive. Fostering a “culture of openness” inspires people to work harder—and with better results.
Second: Pay transparency or not, every employee isn’t angling for a promotion. Not everyone wants to climb the corporate ladder, and there’s nothing wrong with being an individual contributor. Title bumps aren’t the only markers of success.
Third: If morale truly hinges on an employer keeping secrets from its employees, we’ve got waaaaay bigger fish to fry.
Employers are afraid it’ll create animosity among employees.
It’s true that pay transparency starts a lot of hard conversations—and many organizations aren’t exactly eager to have them. Because, frankly, sh*t might hit the fan.
But vibes are unlikely to sour if an organization is a) paying everyone fairly and b) communicating about how pay scales and salaries are set.
Employers: if you can’t support your reasoning for why one person might make more than another; if you’re not determining pay based on organizational values, outcomes, and scope of work—then you may be trafficking in unconscious bias or popularity contests. And that’s a recipe for an uncomfy environment.
What’s more? In the absence of truth, people speculate. They assume. And they gossip. So, zipping your lips about how you make compensation decisions could be causing more harm than good.
Employers are afraid to lose people.
Another nail-biting thought for employers: if staffers review their salaries and realize they’re all grossly underpaid, there could be a mass exodus.
Our response? Bring out the teeny violin. At the risk of sounding like a broken record: organizations should compensate people fairly, per industry standards. It’s the right thing to do, and it’s better for business.
We call it a job market for a reason. It’s completely within the rights of an employee to “shop” for another opportunity if it offers better, and fairer, compensation. And it’s in an organization’s best interest to show their employees that they value them—and not with foosball tables and free kombucha on tap.
Employers fear there’s no (successful) precedent.
This is a complete myth. In reality, several companies have taken the plunge into pay transparency, and with much success. Take a look at what Buffer (transparent since 2013), SumAll, and Whole Foods Market, the first company to introduce salary transparency across all departments, are up to. The results? Higher productivity, lower turnover rates, and happier employees.
Salary transparency is a tool for pay equity, employee advocacy, and cultural openness. If your employer sees that as a downside, that may be an indicator of how much they value their people—and you.
Learn about how to talk to your boss about salary transparency here… we thought it deserved its own post.