Would you look around and think, “Yeah, that seems fair.” ...?
Or would you be more likely to think, “WTF?! That guy is making more than me?!”
With so much in the news about pay inequality, you must wonder.
David Burkus makes the case for pay transparency in his TED Talk “Why you should know how much your coworkers get paid.”
His research supports the idea that the current practice of secrecy leads to “information asymmetry,” where one party knows more than the other and uses that to their advantage. Your boss knows what you make and is able to give you a standard cost of living increase. And you gratefully accept it.
But did you know that the guy sitting next to you, the guy who started working in the same job and on the same day as you...well, he already asked for more pay when he was hired. And he asked to be put on the committee that you were waiting for your boss to invite you to join. And he’s already set up a mid-year performance review to get his first raise.
He asked. And your boss has no reason to share that information with you. It’s not to his/her advantage to share.
Here are two things you can do about it.
The problem we’re trying to solve is that pay secrecy makes it easy to let a wage gap widen. There’s a 23 percent difference, or a 77 cents on the dollar discrepancy between men and women. Burkus says that in the federal government, a workplace that publishes pay ranges, the gap shrinks to 11 percent.
1) Ask for more. One thing that contributes to the discrepancy is that that men ask and women don’t.
Men are three times more likely to ask for what they want.
Don’t take this statistic to mean that you shouldn’t ask just because you risk being called bossy or aggressive. You know the risk is there, be okay with it. Ask politely, with data from the market, salary calculators, and your performance about what you’re worth.
2) Don’t reveal your salary history. In some states and cities, it's actually illegal for employers to ask prospective candidates about their previous salary. If you're ever promted to answer this interview question, you can respond politely by saying something like, “Help me understand how my past salary is connected to this job. If you think I’m a good fit, that I have the qualifications to do the job well, I’d like you to make me an offer based on that.”
Then be quiet. Don’t give any other reasons. Repeat that line again, if you need to.
How this works
Let’s say you’re making $50k and you found out that your peer in the same job is making $65k. You start searching for a new job because you, too, should be making $65k. What happens if the hiring manager, headhunter or recruiter asks you the dreaded, “What was your previous salary?” question and you admit that you were making $50k? Although we’d love to think that the hiring manager would still offer you that $65k salary, he/she won’t. You’ll get an offer for $55k with a patronizing, “That’s a nice increase for you from your last job!”
The future of pay transparency
If companies are forced into pay transparency, it may be a tough adjustment in the beginning, but they can prepare by adjusting salaries well in advance. Imagine that someone accidentally sent an email to the entire company with every single person’s salary listed. If everyone freaks out, your company has work to do.
If you’re a manager with people on your team who are being paid less than others, follow Burkus’s advice and have an honest conversation about why that person is getting paid less and what he/she needs to do to equal up.