Many people consider talking about money tacky or even taboo. Thatâs especially true at work, where knowing who earns more or less in the office can create an awkward vibe.
But is there ever a good reason to bring up salary with coworkers? Yes, and it could be crucial to both your happiness at work and your bottom line.
Why some companies try to keep salaries a secret.
Talking about salaries at work is often frowned upon by the higher-ups, and some companies actually impose pay secrecy policies that prohibit employees from discussing their salaries with coworkers. These policies might be laid out in the employee handbook, or they could take the form of a non-disclosure agreement that employees must sign.
Usually, companies that follow this type of model are those that go out looking for star performers to add to their teams â talent thatâs likely to be bid up to a higher-than-average salary, explained Denise Rousseau, professor of organizational behavior and public policy at Carnegie Mellon University.
âWhat [employers] are trying to avoid is an internal equity issue when people who are hired recently let folks who are already employed know what money they make,â Rousseau said.
Even if management only implies that salaries ought to be kept secret, itâs tough for them to enforce it. All it takes is one too many drinks at happy hour, or a window left open on a computer screen, for salary information to get out.
âIf you have transparency, people are more likely to be paid what theyâre worth.â
– Denise Rousseau
Not to mention, these policies are actually illegal. According to NPR, the National Labor Relations Act protects private-sector employeesâ right to discuss important, work-related matters, including pay. So, even if your boss would prefer you keep the details of your salary hush-hush, they canât punish you for blabbing.
Further, according to Rousseau, research has shown that employees are more likely to feel mistreated when a pay secrecy policy exists, and the policies increase the likelihood theyâll believe theyâre underpaid relative to their peers.
âPay secrecy is likely to undermine the sense of pay equity or pay fairness in the organization,â said Rousseau.
And, if you think your company is trying to keep salary information secret because some people are either underpaid or overpaid, youâre probably right.
Making salary information public has its pros and cons.
Some companies take the opposite approach, making salaries completely transparent across the organization. Usually, salaries are based on some sort of formula that ensures pay levels are fair. This model has a few benefits for the employer and employees.
For instance, when youâve worked for the same company for several years, you may become less in tune with your value as a worker, since youâre not actively interviewing, according to Rousseau. By instituting a quantitative salary structure, employers are tying salaries to some sort of real market data.
âOver time, if you have transparency, people are more likely to be paid what theyâre worth,â said Rousseau. âThatâs beneficial for both retention and a sense of organizational justice. And we know that organizational justice and trust in senior management are very closely tied.â
When salaries are public knowledge, employees tend to be paid more fairly, stick around longer and trust the leadership more.
âI wouldnât sit around the water cooler and swap salaries.â
– Vicki Salemi
But itâs not all sunshine and rainbows. Rousseau pointed out that when you make things transparent, the inequities become obvious. No matter how fair the system is, employees are going to want to know why some people are paid more than others. âThe critical issue with transparency is having a compensation framework that is rational, and that people understand why differences exist,â she said.
In other words, your boss has to have some pretty compelling reasons for those pay differences. Still, even objective reasons canât stop some people from feeling hurt. Hey, you canât make everyone happy.
When and how to talk about salaries with colleagues.
Clearly, there are benefits to having open conversations about salary. But if your company hasnât instituted a transparent salary structure, itâs important to tread lightly when talking about peopleâs pay.
âI wouldnât sit around the water cooler and swap salaries,â said Vicki Salemi, a career expert for Monster, explaining that it makes others feel obligated to share their salaries because you did. That puts them in an awkward situation if theyâre not comfortable divulging that information.
Instead, reach out to a trusted co-worker privately. âYou can say, âI think itâs important to know what weâre worth, and Iâm doing some research. If I tell you what Iâm earning, will you tell me what youâre earning?ââ said Salemi, adding that you should promise to keep that information confidential.
Rousseau said itâs also worth talking with anyone in the office whoâs recently threatened to leave and received a counteroffer to stay. Not only are they likely to be among the highest-paid employees, âthat person is really key in terms of getting good market information,â she said.
What to do if you think youâre underpaid.
So, what do you do when, after polling a couple coworkers, it seems like youâre getting the short end of the stick?
Salemi suggested contacting the professional organization for your industry to get a ballpark range of salaries. For instance, if youâre an accountant, talk to the American Institute of Certified Public Accountants. If youâre in human resources, contact the Society for Human Resource Management. Explain that you want to know your worth based on factors such as geographic location, education level and number of years of experience. This is information you can bring to your boss when you ask for a raise.
However, Salemi pointed out that in general, the longer you stay at a company, the worse off youâll end up financially. Spending a few years with one organization to gain experience and then moving on to another company â ideally, every four to five years â is one of the best ways to increase your salary and expand your network. You might want to take the salary information youâve gathered straight to the hiring manager of your dream job rather than attempt to negotiate a better salary at your current company.
Of course, some people donât want to job-hop every few years, and thatâs OK, too. Maybe âthey know their 401(k) is being matched every year, they have a great commute, they know their job with their eyes shut and theyâre happy,â said Salemi. âSo if you do stay longer, I say try to move around internally.â
The bottom line is that you should talk about salary at work â with discretion â because it allows you to hold your company accountable for fair pay practices and ensure youâre getting paid what youâre worth.
As Salemi pointed out: âEmployers need to be fair not only because itâs the right thing to do, but because employees can walk at any time and find a better paying job elsewhere.â
If you find out youâre being underpaid, thatâs probably what you should do.