Salary transparency, an issue that has taken political and legal strides in the workplace, is now making its way into conversations between co-workers. The frequency of these conversations has risen alongside the increase in negotiations in the hiring process, and laws mandating companies provide salary ranges in new job ads.
The efficacy of these salary transparency conversations is up for debate, but according to a survey from invoicing solutions provider Skynova of just over 1,000 full-time employees, these interactions are taking place at a presumably unprecedented pace. Seventy percent of surveyed employees said they have taken part in conversations in which they shared how much money they made with their co-workers.
Generational Shift
According to findings, age is a significant factor in whether or not a person is willing to talk about their salary at work. Eighty-two percent of Gen-Z employees (born between 1997 and 2012) said they believe salary discussions are appropriate in the workplace. Gen X (born between 1965 and 1980) and baby boomers (born between 1946 and 1964) — likely the bosses and managers of these younger employees — said these conversations were appropriate workplace discussions at a rate of only 38% and 47%, respectively. This discrepancy may lead to some additional hurdles for organizations in the future.
For those not talking about salary at work, it may not be entirely by choice. Data shows nearly one in four employees who aren’t having these conversations aren’t doing so because of a contract-related restriction. Another one in five of that category said they aren't discussing salary with others because a manager asked them not to.
The consequences of knowing how much co-workers earn has some positive impacts on employees. A third realized they were underpaid, with just over a fifth (22%) getting a raise as a result of sharing their knowledge with the appropriate party. Despite some seeing rises in compensation, less than one in 10 (9%) said the knowledge resulted in gaining fairer compensation.
To the satisfaction of leaders worried that some may look elsewhere for work if they know how much their teammates made, only 3% of employees reported quitting as a result of knowing their co-worker's salaries. Remote workers, many of which are suffering from productivity paranoia and participating in trends like quiet quitting, are 33% more likely to look for another job after knowing their co-worker's salary versus those who have some time of regular in-person commitment.
Transparency Between Salaried and Freelanced Employees
Freelance work, a trend that CFOs have tapped into with both positive and negative results, can sometimes result in hourly wages much higher than a full-time employee's salary calculated at an hourly rate.
According to Skynova, a majority of full-time employees would either feel indifferent or disappointed, but not enough to make them look for work right away. According to findings, 30% said they would feel indifferent, while another 30% also said they would feel unappreciated. Only 28% said they would feel frustrated, while just 26% said would be surprised to learn a freelancer gets paid more than they do.
Findings also show that, much like the desire to find new work due to these conversations, the work environment also plays a big role in whether or not an employee’s morale is negatively impacted by freelancer compensation disparity. Data shows on-site workers were 76% more likely to feel unappreciated due to a freelancer who is compensated more hourly, when compared to remote workers.
For those organizations outside of cities and states that require transparency in job posts, it is up to the discretion of the company as to whether or not they desire to provide a range to potential candidates. But nearly all (99%) of the employees surveyed believed a job post should have a salary range in the description. Nearly three-quarters (71%) said they would be less likely to apply to a job whose description doesn’t provide a fully transparent salary range.
Salary Transparency’s Impact on Romance
When it comes to work-life balance, transparency also impacts romantic relationships. According to the data, 69% of employees said salary discussions were necessary for a healthy relationship with someone. One in four of all respondents said they would end a romantic relationship if their partner didn’t disclose their salary, with the higher earner of the two 31% more likely to end things if their lesser-earning partner refused to share their salary.