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The rationale behind pay secrecy ignores the vast amount of time that employees spend guessing at what their co-workers and bosses make. (scene26/Getty Images/iStockphoto)
The rationale behind pay secrecy ignores the vast amount of time that employees spend guessing at what their co-workers and bosses make. (scene26/Getty Images/iStockphoto)

Is it time to ditch salary secrecy? Add to ...

Visit the site of any competent online retail operation and you can instantly zero in on the precise product you want.

That perfect short, low-back, black wooden bar-stool with a faux-leather seat for less than $300 is yours with just a few clicks, part of the online revolution that has delivered information, and power, into the hands of individuals.

But there is a conspicuous exception to this ethos of transparency: online job postings, at least those for the private sector.

The most important piece of information about a job – the salary – is almost always AWOL.

Not only is that frustrating for applicants (especially combined with inflated titles and opaque job descriptions), but as with any information gap, concealing salaries builds inefficiencies into the labour market.

Over-qualified or under-qualified job seekers don’t get the hint from a salary that might be too low or too high for their circumstances. After a few hours of busy work, a human-resources department can sift out those non-starters, but more concerning from a company’s point of view are qualified applicants who pass by the position.

So, why shouldn’t employers join the rest of the modern market economy and just state the price they are willing to pay?

One obvious rationale is the desire to preserve bargaining power in salary negotiations. State a salary figure and potential hires will treat that as a jumping-off point. A salary range might seem to preserve much of that negotiating flexibility, but one Nova Scotia-based recruiter says most people only tune in to the top. “You only hear one number in a range,” says Scott McGaw, partner at Meridia Recruitment Solutions in Halifax.

Mr. McGaw says he is wary of candidates who focus on compensation from the outset, rather than the tasks and challenges of a prospective position. Those focused on dollar signs are rarely the best fit. Fair point, although a salary is what typically distinguishes a job from a hobby.

Competitive considerations are at issue, too. Disclose what you pay and rivals will be able to outbid you for top talent. (That assumes a stunning passivity on the part of competitors, mind you.)

Then there is the question of equity within a company, says Danielle van Jaarsveld, associate professor of organizational behaviour and human resources at the University of British Columbia’s Sauder School of Business. Employees with similar jobs will be unhappy, to say the least, to find out that they are being paid less than a new hire. Big pay gaps between managers and their staff could also hurt morale.

Each of these rationales have some merit, but they all boil down to valuing pay secrecy over transparency, and accountability. And they ignore the vast amount of time that employees spend guessing at what their co-workers and bosses make.

For companies willing to contemplate a break from pay secrecy, there are some upsides beckoning.

Contact Patrick Brethour at brethour@shaw.ca

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