As technology is sweeping the way we live our lives, millennials are also potentially creating a new trend… openly discussing salaries in the workplace. Once considered a taboo subject, millennials don't turn a cheek to sharing how much money they make, yet they are incredibly shy about talking about sex in general.
In a recent study done by www.bankrate.com, Americans between the ages of 18 to 37 are more likely than gen x'ers and baby boomers to share their salary information with others, especially co-workers, according to the study. The study showed that 33% of all millennials share their salary information with others at the workplace, which is twice what baby boomers are willing to do with their salary information.
In Pamplona, they have the running of the bulls. In Helsinki, they observe something called "National Jealousy Day" where every single Finnish citizen's taxable income is made public at 8 a.m. for all to view in plain sight. A few years ago, the social media company Buffer publicly put out a spreadsheet (still on the internet) that showed every single employee and their annual income. So, with all of this information out there, what are the pros and cons of sharing salaries?
Pro: Transparency
There are great websites out there that can help you benchmark the salary for your job and geographic location. www.payscale.com and www.glassdoor.com are two of those that are out there today. By having transparency, you can certainly reduce the noise of gossiping and curiosity amongst employees in a company. We've seen in businesses like pro sports where all player salaries are transparent. It can help set a barometer for what the marketplace can pay you. However, we've also seen CEO pay that is visible for Fortune 500 companies, that even when salaries are transparent, it may not make pay equal or fair. Instead it makes just make you jealous and mad. You would imagine the interviewing process would be less of a negotiation and haggling process with transparency, much like we have seen in the automobile industry with new car sales over the last decade.
Pro: Salary Sharing Doesn't Mean Income Sharing
Wait! Isn't sharing my salary sharing my income? No! Remember, that your total compensation package from an employer is made up of many facets. This includes not only your salary, but also bonuses, stock options, restricted stock, fringe benefits, profit sharing, 401(k) matching, payroll taxes, health insurance, and more. This is an important distinction because companies that were transparent with salary could still incent employees in other forms, so total pay is more covert than overt.
Con: People Change Their View Of You
Do you let your boss always pick up the tab at lunch? Why? It's probably because you assume the company is paying for it or you assume your boss is making more than you so that should just be proper protocol. If you knew that the person sitting next to you at work was getting paid $30,000 more per year than you were, would you be more inclined to let them pay for more stuff? Or, would you be less sensitive to their family or personal issues when they come up at work? What's even worse, is that people could start judging you and your payments not knowing your entire family situation. If you made $50,000 per year salary and showed up one day with a brand new Porsche, people would likely start asking you, "Can you really afford that?" Instead, if you made $250,000 per year, people would talk behind your back and say, "Hmmmm…must be nice!" Most people at work change their filter and their opinions of people based upon their income.
Con: World War III
Of course, it will be a great day when we can have pay equality at work. Most companies offer a 'range' of salary for every job that has a band at work. The reason is that you have to account for the real value of an employee in a job. This means their tenure, experience, skills, etc. However, if you thought you were doing a better job than the person sitting next to you in the same exact job and they were making $20,000 more per year than you were at work, you might be inclined to start a full-scale war on management. This kind of dialogue could lead to a very divisive and ill-harbored feeling workplace. I have seen this happen before many moons ago in a prior career.
Remember, you can't get fired for discussing your income at work. The Secrecy Act forbids that to happen. But, there is a reason many of your employer's keep you in the dark when it comes to learning the income of your co-workers. It's more about keeping the peace than keeping you in the dark. Most of us often feel we are overworked and underpaid, and our bosses are overpaid and underworked. But what would hurt the most is thinking you are doing a better job than the person doing the same job sitting next to you and learning they make $10,000 more per year. Sharing salaries could become a trend for the future, but be careful what you ask for…one day you might get it.
Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
CEO and Founder oXYGen Financial, Inc.
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