Why you should talk about how much you get paid

Do you casually drop your salary into conversations with mates or ask how much they earn? If you’re horrified at the mere thought, you’re certainly not alone. Discussing how much you get paid with anyone outside your immediate family is a huge taboo in Australia.

For many workers, this reluctance to share stems in part from workplace cultures and contract clauses that prevent people talking about their salary. But things may be about to change with a new law that bans pay secrecy policies, and greater awareness of the need to create more inclusive workplaces.

Women and disadvantaged workers are expected to benefit most from the new law, explains Dr John Molineux, senior lecturer in human resource management at Deakin Business School.

‘I’m really encouraged by the fact that pay secrecy is going because it’s been a real problem. It’s never made sense to me,’ he says.

Promoting a culture of pay secrecy

In the public sector, pay scales and enterprise agreements have long made salaries public. If you are a nurse, teacher, police officer or public servant, you have a reasonable idea what your colleagues earn – and, crucially, know you’re being paid a fair wage in line with other professionals of similar levels of experience and responsibility.

This transparency has not traditionally extended to the private sector, where, except for high-profile leaders and CEOs, corporates and other large organisations have promoted a culture of pay secrecy, which Dr Molineux says supresses salaries and helps to conceal gender pay discrepancies.

‘It’s become a taboo largely because of policies that organisations have had around pay secrecy – no one really knows what’s going on or who’s doing what,’ he says. ‘People who are not good negotiators might be doing an excellent job, but they don’t have the skills to really hammer a great deal. In many cases, these people are women.’

Improving transparency and accountability

According to international evidence[1], the freedom to ask your colleagues what they earn and share your salary – as permitted under the new Australian law – improves transparency, holds workplaces accountable and reduces the risk of pay discrimination. In particular, it helps to close the gender pay gap.

‘The main benefit of the law is that you can disclose what you’re earning to another colleague,’ Dr Molineux says. ‘When people start talking about salaries, they can negotiate their own salary based on knowledge of what others are earning, which promotes fairness and equality.’

And even if workplaces aren’t alive with salary chatter, he says, the idea that they might be will hopefully encourage more organisations to make public, at least internally, information about pay scales and bonuses.

The end result is a win-win: workers are happy they’re paid fairly, and employers benefit from a content and productive workforce.

‘There’s incentive for employers to be more equitable in the way they do their processes,’ Dr Molineux says. ‘You don’t want to upset the applecart by having things in place that are going to cause tension and unrest.

‘You want fair processes that are in place that keep people happy, because what motivates people is the work itself and a sense of achievement – the pay structure shouldn’t be a barrier to that.’

Asking your colleagues how much they earn

Still feeling awkward about asking your colleague how much they earn? Dr Molineux says it’s best to broach the subject with people with whom you’ve developed a good rapport and trusting relationship. Your employer may no longer be able to enforce pay secrecy, but that’s not to say everyone will be happy to give up their privacy, so tread carefully.

‘If you’ve got a really good team that trust each other and you’re working closely together, it will be a natural part of conversation and you can talk about it openly,’ Dr Molineux says. ‘If you have trust within your team, it’s going to help with honesty and openness.’

It can also be helpful to ask colleagues how extra tasks and temporary responsibilities affect their salary.

‘If you’re got one person who’s got a slightly different role in the team because they’ve taken on additional responsibility, you might expect their pay rate to be higher, so you could ask if they are getting paid extra,’ Dr Molineux says. ‘They might say yes, or no because they’re doing it for the learning experience or to facilitate a promotion.’

Politely asking for a colleague’s salary range, rather than a specific number, is another gentle approach that still gives you the information you’re after.

‘If the difference is only a few thousand dollars, there’s not much to worry about, but if it’s more like $20,000, then it’s probably time to talk to your manager,’ Dr Molineux says.

[1] https://theconversation.com/pay-secrecy-clauses-are-now-banned-in-australia-heres-how-that-could-benefit-you-195814