Whether it’s a small office or a massive corporation, what’s the biggest secret in every workplace?
It’s the last taboo of office culture to know the salary of your fellow employees. Whispers of what an office mate earns are always the down-low discussions around the water cooler, but why is it still a secret?
According to Erin Reid, associate professor, Human Resources & Management at McMaster University’s DeGroote School of Business, salaries function as a signal of worth in our society.
“We are taught from … an early age we should not discuss salary or money in casual settings. This may be particularly true for women, who tend to be encouraged to value meaning over wages in their career choices,” Dr. Reid says.
Employees may be reluctant to reveal their salaries out of a “social fear” that their workmates will discover they are paid less than others in similar roles.
Employers, meanwhile, have other reasons to keep salaries a secret.
“For employers, salary transparency makes the value they assign to different employees painfully clear, opening the door to conflict and a need to make some changes,” Dr. Reid says.
Pay transparency measures
Since Jan. 1, 2021, federally-regulated private sector employers (including airlines, banks, radio and television broadcasters and telecommunications companies) are required to report their salary data in a way that shows aggregated wage gap information. These pay transparency measures were enacted by the federal government to “raise awareness of wage gaps experienced by women, Indigenous people, persons with disabilities and members of visible minorities,” with the new salary data to be first compiled and released in June 2022.
As more data emerges in more industries, will this encourage salary transparency to become the standard?
“It is unlikely widespread salary transparency will happen and it is unclear that it is a useful solution to the gender wage gap,” says Sarah Kaplan, distinguished professor and director, Institute for Gender and the Economy at Rotman School of Management, University of Toronto.
“The main driver of the gender wage gap is job segregation. Women are tracked into lower-paying roles either because of bias by managers or because women’s greater responsibilities for care work at home mean they are excluded from the highest-paying roles.”
Dr. Kaplan says that Ontario’s “Sunshine Law,” highlighting government employees paid more than $100,000 per annum, has shown that men are in the higher-paying positions, and it has also led to a small but statistically significant closing of the wage gap in public universities, mainly by depressing increases in men’s wages.
But transparency at that level of pay doesn’t help everyone. Leslie Nichols, instructor in the Faculty of Social Work at Wilfrid Laurier University and editor of Working Women in Canada: An Intersectional Approach, points out that Ontario’s Sunshine List “doesn’t include workers at the lower end of the salary range, who are marginalized and experience more financial hardship. For example, an academic offered a tenure-track position at an Ontario university can in most cases use this list to determine their worth when negotiating their salary, but a full-time public school administrative assistant cannot.”
A need for change
Dr. Nichols believes there would have to be significant changes throughout the economy in order to increase salary transparency.
“To begin with, we would need to change the status quo around gender and be open to seeing people across the gender, race and class spectrum in a variety of labour market roles,” says Dr. Nichols. “Even Hollywood is struggling with salary transparency. In 2015, Jennifer Lawrence stated publicly that she and her female co-stars earned 7 per cent of the profits on American Hustle while her male costars received 9 per cent; she expressed fearing that she would be seen as difficult if she pressed for better terms.”
While salary transparency may not be welcomed by most employers with open arms, perhaps it is a worthy goal. Dr. Reid says that widespread pay transparency could benefit women and other equity-seeking groups.
“Information is power,” says Dr. Reid. “Transparent information would help equity-seeking groups by making it more likely they are offered an equitable salary … and make it clearer what salary they could negotiate for.”
This story has been updated to correctly reflect Dr. Erin Reid’s, Dr. Sarah Kaplan’s and Dr. Leslie Nichols’s titles.
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Question: I’m a mid-level manager at a large corporation, hoping to advance to the C-suite. I’m considering taking an executive education program, but I’m wondering if it’s worth the time and money. Is this a good investment in my future career or can I reach my goals without it?
We asked Jenny Zhang, principal with executive search firm Boyden Canada and a 20-year veteran in the executive search industry, to answer this one:
If you can afford the program and you are doing it for your own personal career growth, I fully support it. It’s a good investment, not only for the knowledge you’ll get but also for the network, the community you will gain. Once you are approaching the executive level, the knowledge is almost all there, so the network is really more valuable. Your cohort will be made up of other managers and executives, so when you engage with them, they will get to know you on a personal level. This builds up opportunities for yourself and opens doors outside of your current corporation. That’s a huge intangible benefit you can get from executive education programs.
Having said that, the value of the program also depends on your background. If you have a more technical background, for example, then you may need the financial piece or the marketing piece to be able to grow and thrive at the executive level, so you can speak the same language as the senior executive team.
Not everyone can afford $100,000 for an executive MBA program, so you need to be clear on why you’re there and what you hope to gain. There are some people who take their MBA and don’t know why they are doing it, and it might not be worth it at all.
Be honest with yourself, analyze your own competencies and your position in the company. Look at the situation realistically and ask: “What is this organization looking for? What don’t I have?” Evaluate what you lack at this stage and whether or not you can get it from this executive education program or from other channels. Consider whether there is someone at your organization who can help you reach your goals. And, most importantly, always approach these career explorations with courage and positive energy.
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