The Case for Talking Salary With Coworkers
Let’s be frank about something: talking about how much money you make with your coworkers can be downright uncomfortable.
If you’re a high earner, you may worry about coming off as arrogant. If you don’t make as much, disclosing your earnings could leave you feeling embarrassed, judged or less than.
“For many of us, a good deal of our self-worth is wrapped up on our economic standing,” said Jake Rosenfeld, an associate professor of sociology at the University of Washington.
“Revealing information about our pay touches on who we are and how we are valued, which are obviously deeply personal issues.”
Nevertheless, more and more workers are breaking a longstanding taboo and opening up about how much money they make. This newfound transparency could be the key to fair and equal pay.
How lack of transparency hurts us
It's not just uncomfortable to talk about money, it's also largely frowned upon. Most workplaces discourage employees from sharing how much they make with one another. But pay secrecy is far more beneficial to employers than it is to employees.
First of all, it allows companies to keep compensation costs lower. When you don't know your coworker makes more than you, you're less likely to ask for a raise to match.
Without salary transparency, employers can also hire the candidate they want at the price point they want rather than considering whether an offer is consistent with existing salaries. Not everyone feels empowered to negotiate for more.
“Starting salaries are often affected by how vigorously the candidate negotiates for a higher salary, for example, and this disadvantages women and minorities,” said Lucy Ford, a professor of management at Saint Joseph’s University’s Haub School of Business.
“Implicit bias can come into play in both starting offers and pay increase decisions when there is not a clear pay structure that is transparent.”
Determine your worth
Fortunately though, that’s changing.
According to new research from financial planning company Bankrate, about a third of millennials have shared their salary with coworkers, compared to just 18 percent of baby boomers.
This movement toward salary transparency is helping people understand their worth and determine how much money they should realistically be earning each year.
Say, for example, you discover that a coworker earns 10 percent more than you do. Chances are that information will prompt you to sit down with your boss and negotiate a raise or start searching for a better opportunity.
Pay transparency allows for a more informed perspective when entering salary negotiations, Ford said.
“So often, when there is pay secrecy, candidates are unable to judge whether their offer is fair or not," she said.
If you don’t know you’re earning less, how will you know what to negotiate for?
Close the pay gap
The more comfortable and confident we get with discussing our incomes, the more attention we’ll bring to gender and racial pay gaps that are still very real.
Women still make an average of just 80 cents to every dollar men make, according to the Institute for Women’s Policy Research. Black women in the U.S. are paid nearly 38 percent less than white men and 21 percent less than white women, according to survey conducted by Lean In. The IWPR predicts that it'll be another 40 years before we reach any kind of gender pay equity.
Yes, it’s clear that we still have a long way to go to eliminate pay gaps—but talking about it can speed up the process.
“We know from past research that more transparent workplaces tend to have a narrower salary distribution,” Rosenfeld said.
“It’s harder for an employer to justify major inequality in the workplace when employees know what one another make."
While it’s technically illegal for an employer to penalize an employee who talks about their salary at work, many companies still have policies forbidding employees from doing just that.
So, before you start a dialogue, review your organization’s policies or meet with someone from the human resources department.
“You’ll want to get a sense of your employer’s official policies and general company culture before knocking on the neighboring office’s door and demanding to know what the occupant makes,” Rosenfeld advised.
Some people will be hesitant to talk about their finances—and there’s nothing wrong with that. If that’s the case, respect their boundaries.
If you find out that a colleague makes more than you do, what might you do? Politely and professionally ask your boss about the reasoning for the discrepancy. Oftentimes, what makes up someone’s salary is quite complex.
“It is entirely appropriate for salaries to vary based on skills, abilities, education and merit—to name but a few factors that go into a pay decision,” Ford said.
Instead of zeroing in on the fact that your coworker makes more than you do—which could come off as unprofessional—focus on how you can improve and work toward a raise.
Talking about money can feel awkward and risky, especially when you’re at work. But by doing so, it could result in an increase in pay and career advancement.