Should Salary Information Be Confidential?

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Today we have a guest editorial from Andy Warren as Steve is on holiday. This editorial was originally published on 5 June 2015. 

Salary is a tough topic. We’re reluctant to talk about it for fear of causing trouble, looking like we’re bragging, fear that we’ll find out we’re working for far less than we should be, because we were taught not to, and of course, many employers actively discourage it. Should we talk more about it?

One of the hardest parts of accepting a job offer is deciding if the salary is right. We start by comparing the offer to what we make now (as well as all other benefits), but does the salary reflect our true value based on our skills and the market? How do we figure that out? Salary surveys are a start, though the hodge podge of job titles makes it tough to know if we’re comparing apples to apples. Sites like Glassdoor can really help if your prospective employer is listed. Wouldn’t it be nice to know what they have been paying for the job title? We can ask recruiters about the market (before the offer!) and friends in the industry as well. Combine all of those, and we get a rough view of what we’re worth. Not perfect, but useful.

We all work to take care of family and while benefits and challenges matter, money pays the bills. Why would we not try to maximize our salary for a given position? Should we just trust that the new employer will pay us fairly? You have maximum leverage on salary before you’re hired. After that you’re subject to the rules set by HR that limit the amount and frequency of raises. Focusing on money up front is important because you have little leverage after that (which is why so many employees leave to make more money). Getting the best deal is hard without a good understanding of the market and the employer.

HR departments tend to be the equalizer, which is good and bad. The good is that they prevent managers from under paying employees based on the job title/level and they try to keep the salaries aligned with the local market. The bad is that they set caps to keep managers from over paying and those caps are often unrealistic, both in terms of initial hiring and future raises. A good question to ask during an interview – when was the most recent salary analysis done for the position in the local market? That may give you information, leverage, or both!

I can appreciate the pain it can cause for managers in the form of “why does Steve make x more than I do?” type questions. I don’t think those are all bad. Either you can voice a reason that you see as valid for the differential, or you give them a raise. The pain is more perceived than real. I’ve never seen a case where all the employees from a team lined up to get equivalent salaries.

It does annoy me when employers demand that salaries be treated as confidential. My unofficial understanding is that such a demand isn’t legal (see this article for more). Legalities aside, in practice if you discuss it and it becomes an issue you may well end up being fired, just probably not for that particular reason. The annoyance factor for me isn’t the legal case though, it’s the idea that managers are supporting a policy that they should disagree with as employees themselves.

Is transparency the answer? Buffer published their salary list. The State of Florida publishes the salaries of college teachers. The Department of Defense has standard salaries across all the branches (transparency and standardization). I don’t know if transparency is the right answer in all cases, but I can see it being simpler for employers – no more secrets, and a real reason to keep salaries at or above market levels. Would it cause a few hard conversations? I’m sure it would.

I think we should talk more about it. Carefully. I’m not suggesting you contravene policy or otherwise risk your job. Common sense should rule, but perhaps think about scenarios outside of your company (including salary surveys) where you’d be willing to share information in order to get information back. It’s not all about the money, but money does matter.

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