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What two words are most likely to prompt strong opinions and enthusiastic debate in your company? My submission: salary transparency.
For decades, many Americans shared an unspoken bond around pay secrecy. You just didn't talk about how much money you made, or how much you were paying someone else. It was tacky, impolite, even downright gauche. In recent years, however, that norm has been eroding, as companies and workers advocate for salary transparency as a means to close race- and gender-based salary gaps. Other pro-transparency arguments include more open, trusting company cultures and motivation for employees to perform at the levels of their higher-paid colleagues.
This movement has opened up conversations on how salary transparency can affect companies--and some of the data points are pretty surprising. The New York Times published a deep-dive into the subject Thursday and found that open-pay policies can actually decrease a workforce's happiness. The logic: Employees suddenly discovering they're underpaid compared to their colleagues can create a breach of trust between staff and management that's hard to repair.
On the other hand, companies that have adopted this transparency often find that, more than anything else, being open is what fosters long-term trust with employees. Just look at Buffer, a San Francisco-based software startup founded in 2010. Three years in, the company's founders decided to fully embrace open-pay policies: All salaries at the company are posted online, for anyone to see. Buffer's website even features a wage calculator for potential job applicants to learn how much they'd make before they even submit a cover letter.
Employees have loved it--so much that they nominated Buffer to be one of Inc.'s Best Workplaces in the U.S. in 2018. And the workforce's positivity went hand-in-hand with financial success, as Buffer made the Inc. 5000 list of fastest-growing companies in America that same year. As the Times story noted: "Corporate culture can be a form of capital as well."
Last year, a LinkedIn survey of more than 5,000 companies reported that 22 percent of them were likely to start sharing more salary information for open positions by 2024. So, with that in mind, I'd like to open this up: What's your company's stance on salary transparency? Have your policies changed over the past few years, and if so, why? Email me at email@example.com and your response could be featured in a future edition of Inc. This Morning.