Show me the money 🤑
Show me the money 🤑
The current (and future) state of salary transparency.
If you get squirmy at even the mention of a dollar, a pound, a yen, a euro… then strap yourself in because this week, we’re talking about money. 💰💰💰
Recently, the young people (of which I am part) have been calling attention to salary transparency. On TikTok, one young woman named Hannah Williams (@salarytransparentstreet) went viral after asking people on the street to disclose their salaries. Her videos amassed millions of views and led many viewers to realize they are being underpaid.
In an interview with Newsweek, Williams said:
I just realized that the fact that we don’t talk about salary is actually a bad thing for all of us and a good thing for corporations. There’s a reason that they don’t want us to talk about it because we’re gonna realize that we’re being underpaid and taken advantage of.
In Malaysia, freelance photographer, branding consultant, and copywriter Prestine created the Malaysian Pay Gap Instagram account, which quickly garnered over 100,000 followers in a matter of weeks. Its followers are also flocking to Malaysian Pay Gap’s new Discord channel, where they can further discuss fair pay.
What Is Salary Transparency & What Do People Want?
👉 Salary transparency is the act of openly sharing salaries and benefits within the company and sometimes even with the public.
Here are a few companies that practice salary transparency:
Buffer provides a publicly available list of how much each employee makes.
SumAll shares every employee’s salary in an internal Google Doc.
Whole Foods allows staff to easily look up anyone’s salary and bonus from the previous year.
Pay transparency is also becoming law in some countries. In the United States, a new bill now requires companies to include a salary range in job postings. A similar initiative was recently announced in the UK.
So, what do employees want?
According to Glassdoor’s Global Salary Transparency Survey (conducted in 2015 among seven different countries):
70% of employees believe salary transparency improves employee satisfaction.
69% of employees wish they had a better understanding of what fair pay is for their position and skill set at their company and in their local market.
More than 3 in 5 employees (62%) would be willing to share more information about their salary if they could do so anonymously.
The Case For (And Against) Salary Transparency
Let’s take a look at the pros and cons of salary transparency:
Pros:
Salary transparency can improve employee performance, productivity, and retention. (Buffer reported a retention rate of 94% in 2017.)
Employee performance can decrease when salaries are kept secret (according to research from Tel Aviv University).
Being open about salaries can reveal greater inequities and help companies close the gender pay gap.
Salary transparency can create a greater sense of fairness and cohesion between management and employees.
Cons:
Salary transparency can cause resentment or conflict between coworkers if salaries aren’t equally distributed.
This could increase turnover if employees are dissatisfied with their compensation compared to others.
Even if an employer explains the reason for another worker’s higher pay, other employees will most likely remain unhappy.
Privacy concerns.
Money Talks: The Importance of Salary Transparency Policies
While it might be considered a faux pas, the ability to talk about salary in the workplace signifies a high-trust culture. Not talking about money builds a culture of secrecy – and in some companies, salary secrecy is abusive. As SumAll CEO Dane Atkinson puts it:
If you can get talent at a discount, your board will cheer. That’s why it’s an abusive system.
At the end of the day, I’m pro-salary transparency – if only for the reason that it forces companies to examine their salary policies. Did you notice that most of the points in the cons list aren’t inherent problems with salary transparency, but are dependent on the company’s salary policy itself and how the company communicates compensation decisions?
Ultimately, it’s more important to be transparent about how salary decisions are made rather than the actual numbers themselves. In other words, salary transparency isn’t a silver bullet that will magically fix fair wage issues.
Not only did Buffer release every employee’s salary, but they also published the strict formula they use to generate salaries.
While Malaysian fintech startup Pantas does not share salaries within or outside the company (due to privacy reasons), its co-founder Max Lee states:
Any employee who believes that they’re undervalued or underpaid versus the market and their skillsets can request a salary review. A transparent and direct workplace culture encourages and empowers its members to seek better compensation that commensurates with their talent, skill sets, and market rate.
With younger generations and people like Hannah Williams and Prestine bringing this topic to the forefront, we can expect to see a stronger push toward salary transparency going forward, which will hopefully contribute to driving fair and equal pay for all employees.
So, get your house in order.
What do you think about salary transparency? I’m still pondering the topic, so I’d love to hear your opinion! Continue the conversation by leaving a comment below.
Take It Away 💃
Salary transparency is the act of openly sharing salaries and benefits within the company and sometimes even with the public.
The majority of employees (surveyed by Glassdoor) believe salary transparency is good for business and would be willing to share more information about their salary.
Salary transparency is a double-edged sword. It can improve employee productivity and reveal pay gaps within the company, but it also comes with privacy concerns and risks of conflict or high turnover if employees feel like they got the short end of the stick.
Ultimately, it’s more important to be transparent about how salary decisions are made rather than the actual numbers themselves.
DEI Win of the Week 🐦
This week’s DEI win goes to Twitter!
On Tuesday, Twitter published its Q1 2022 Inclusion, Diversity, Equity and Accessibility (IDEA) report, which revealed that the company is two years early in reaching its five-year goal of having more diverse talent.
The report shows that women now account for 45.1% of all roles and 39.5% of leadership roles globally. In the US, 9.7% of its employees are Black, 8.4% are Latinx, 4.5% are multiracial, and less than 1% are indigenous.
The tech industry (including Twitter) still has a ways to go when it comes to diversity, equity & inclusion, but hey, we’re going in the right direction!
…And let’s face it, Twitter could use a win while its board tries to escape Elon Musk’s clammy grasp.