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Few workplace issues get as much attention as the question of salary transparency, which has been a hot-button topic for years. While there’s an ongoing push toward completely public salary disclosures in the European Union, the U.S. has mostly lagged behind, with compensation historically deemed to be a private, personal matter. A new report says Gen-Z is challenging these norms, as it is with many old-fashioned workplace traditions. Could this prompt your company to be open about your workers’ pay, and even to encourage your staff to chat about the topic? And what benefits can you expect if you make the change?
New global data from Kickresume, the Slovakia-based AI résumé building service, found that only 31 percent of people say salaries are openly discussed at their job, and 37 percent say their employers actually ban talking about salaries, Newsweek reports. But nearly 40 percent of Gen-Z respondents to the survey said that they openly discuss salaries at their workplace—far above the average across all age cohorts since just 30 percent of Millennials and 22 percent of Gen-X respondents felt the same way, and one in three Gen-X workers say they actually prefer not to discuss the matter at all. In fact, 18 percent of Gen-Z respondents said they are so open about pay transparency that they talk about it even if their employer bans the topic.
Digging into what’s going on here, the survey also found that an average of 32 percent of respondents remain curious about what their colleagues earn and are interested when someone discusses the topic. Gen-Z is more curious, with 38 percent feeling this way.
As to cultural differences about the matter, while 34 percent of European respondents say salary is openly discussed, just 27 percent of Americans say the same, and only 24 percent of respondents from Asia. Kickresume’s report says the U.S. is actually leading the movement to “[keep] pay talk off the table, with one in three workers saying they simply don’t want to discuss salary at all.”
What’s your takeaway from this data?
Experts have long argued that pay transparency is a good thing for the workforce, often citing a noted study in which some people were kept in the dark about bonuses and pay and others were informed of their colleagues’ details. Workers who weren’t told about pay levels actually performed worse in the experiment.
Other research suggests that the trend for secrecy around compensation is slowly changing, with more and more job postings explicitly listing salary levels, even as an increasing number of states are legislating to make all companies post salary levels publicly.
Interestingly, in 2022, a LinkedIn survey on workforce confidence found that workers at smaller businesses were less likely than workers in larger enterprises to feel that salary discussions are discouraged by their employer. It’s easy to imagine that in a smaller, more family-like company the sense of camaraderie and familiarity with colleagues encourages this idea of openness. In larger enterprises, management may be uncomfortable with workers at similar levels and with similar skills discovering that, for whatever reasons, their pay levels are different—even though the National Labor Relations Act says workers have the right to talk to each other about pay.
Meanwhile, Newsweek pointed to a February survey from Delaware-based essay writing service EduBirdie that found 58 percent of Gen-Z people surveyed said they would explicitly avoid applying for jobs at employers where salaries aren’t disclosed ahead of time.
Essentially, there’s a large body of evidence that being open about salaries promotes employee well-being and boosts the sense of equality and fairness—assuming that you are a fair employer, and, for example, pay female workers the same rates as male ones. The EU is so set on the idea that member states have to implement the Pay Transparency Directive by next June as part of an effort to make such transparency commonplace across the continent.
Savvy business owners may see this new research as a prompt to promote pay and compensation openness among their employees, since the change may boost your productivity. You may have to put up with some difficult discussions about disparities in the short term, however.
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Kit Eaton
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