A recent survey conducted by Love Energy Savings showed that the majority of UK employees don’t want any salary information to be made common knowledge throughout their businesses. When asked which approach to salary transparency they would prefer in their company,
The debate about salary transparency
Love Energy Savings set out to gather data about salary transparency to test the notion that lifting the veil around staff salaries will make a positive change in all businesses.
The conversation about salary transparency began when social media management platform Buffer famously disclosed staff salaries to the public via an online spreadsheet. In the month following their publicised adoption of salary transparency, they were inundated with twice the number of job applications they normally received.
The success of Buffer’s gamble sparked plenty of debate between business leaders as to whether it should be rolled out on a mass scale. Some leaders — like CEO of AMV BBDO, Ian Pearman — embraced the idea and implemented it in their own companies. Pearman said the key reason to adopt it was that it helped to dismantle pay inequality, particularly any differences in pay that correlate with gender or race.
However, others found that the positive buzz around sharing salary details internally wasn’t enough to convince their employees that it was the right decision. SEO management platform MarketGoo came close to rolling out a salary transparency policy — until their employees voted against it.
As the new research from Love Energy Savings suggests most workers aren’t yet willing to embrace a change that makes salary information freely available to everyone in the company, despite the potential improvements in pay equality and staff satisfaction.
Why employees might not be ready for salary transparency
One explanation for workers’ hesitancy to embrace a transparent salary policy is that it means their own salaries will be on display.
For professionals that have negotiated a higher salary than others, it could mean that they’re targeted by peers that earn less than them, which — if not handled properly — can lead to messy internal conflicts.
For employers, salary transparency is particularly risky if their company has a history of pay inequality. Not only would it be costly to “level the playing field” if businesses feel obligated to compensate workers that argue they’re underpaid compared to colleagues, but it could have a lasting impact on employee productivity. A study conducted at the University of Michigan found that when taking on a task that involved counting dots, participants performed worse when they knew they were being paid less than others.
With these issues in mind, it’s easy to see why established businesses risk suffering long-term damage to morale and productivity after sharing pay information without a clear salary policy in place.
It’s not a lost cause
Phil Foster, Managing Director of Love Energy Savings, said:
“Our research shows that workers aren’t yet convinced by the idea of salary transparency, which to me suggests that businesses should include employees in the conversation.
“It’s possible that some workers anticipate a backlash from having their salaries revealed to others, a fear that currently trumps the potential good that transparency can bring. Businesses that want to be innovative need to speak to their employees about change; firstly, to see whether it’s right for them, and secondly, to help alleviate concerns that employees might have.
“Whether salary transparency is right for your business or not, the most important thing is that staff have their say.”