Companies should stop salary secrecy


Graphic by Julianne Cruz

It is better for employees and employers to be more open about salary topics.

Max Belyantsev, Assistant Opinions Editor

Labor laws have been a longstanding point of interest for the hundreds of millions of Americans in the workforce. In the midst of what seems like one mass layoff after another, large companies must now juggle the daunting task of regaining employee trust and maintaining a culture that will attract new talent. States such as Colorado, Washington, New York, and California have signed new legislation that requires companies to post salary ranges in job advertisements to increase transparency between employers and applicants. However, companies such as Netflix and Tesla have posted outrageously-wide compensation ranges that will confuse and even turn away some otherwise-qualified candidates.

The root of this issue lies in the common practice of salary secrecy. Companies are generally slow to disclose salary information for new job openings because that gives them a competitive edge and helps avoid potential conflict among current employees who see they’re being paid less than what is being offered to outsiders. Unsurprisingly, this tiring mystery turns some potential candidates away. 

Once an offer is accepted, some corporations even force new employees to sign non-disclosure agreements (NDAs) to prevent the circulation of salary info. In some cases, this helps create a more friendly work environment among coworkers by discouraging conflict and decreasing the company’s liability. However, keeping workers in the dark does more harm than good.

Being paid in a fair, open way is a critical factor in employee well-being and happiness, which boosts productivity. According to Forbes, a study revealed that “happy employees are up to 20% more productive than unhappy employees.” Meanwhile, higher turnover rates force companies to spend time and resources training newer employees, slowing down the regular flow of work and thus profit.

Income is a taboo subject, and it shouldn’t be; employees should be able to discuss salary with their coworkers and keep managers and Human Resources (HR) departments accountable. Managers should be upfront about skill or budget issues that result in a weak compensation package. If employees believe they should earn more based on their concrete skills, efficiency, or quality of work, they should respectfully argue for a raise or browse higher-paying positions at other companies. To counteract this and retain talent, managers and HR departments must design satisfactory packages.

Before coming to a job interview or salary negotiation, it is important for applicants to prepare themselves by researching median salary ranges for similar positions at other companies, considering their qualifications, education, and anything else that can be used to their advantage. Companies should respect qualified applicants’ time by being more transparent about pay during the interview stage. “Certainly, I think that if both the candidate and the employer are serious about working together, … salary should definitely be brought up,” social studies teacher Noah Grosfeld-Katz said.

According to Business Insider, Adobe’s Future Workforce Study—which surveyed 1,000 Gen-Z post-secondary and recent graduates—found that 85% were “less likely to apply for a job if the company does not disclose the salary range in the job posting.” Transparency is a clear priority in today’s applicant pool, especially related to compensation, reflecting a generational shift that increasingly values honesty and authenticity. “I think it should just be what the company has to offer. Like if the company says like, this is a dead-end job, you won’t really go anywhere, then yeah, that’s fine, but at least put [display] what most employees get, and where that line is,” sophomore Kevin Si said.

Most people have responsibilities involving payments that need to be made to support themselves and their families. Currently, according to US News, 64% percent of Americans are living paycheck-to-paycheck—an astonishingly high figure—further reiterating the importance of salary transparency. Especially for applicants with larger families, or for those who are their family’s sole provider, money is important. “If the person has responsibilities, such as childcare or others, you know, housing, things like that, then the salary is extremely important. Probably less so for a typical, let’s say, fifteen-year-old who is looking for a job because work experience has value as well,” Mr. Grosfeld-Katz said.

Honesty and transparency are critical for productivity in the modern workplace. Managers and HR departments must clearly show employees and prospective applicants why they are or will be paid a certain amount. Differences should be merit-based: a few relevant metrics could include selling ability and confidence, replaceability, soft skills like communication and diplomacy, and efficiency. These questions must be addressed in a way that prevents arbitrary—or worse, discriminatory—hiring and compensation practices from becoming a part of a company’s culture. Staffing HR departments with ethical and competent employees will help alleviate these concerns and deal with them effectively if any arise. Overall, applicants are less willing to play the old salary game, valuing the direct approach when it comes to something as central as salary.