The case for sharing how much you earn at work

FOR the longest time, I, like pretty much everyone I knew, believed that my salary was a figure I must hoard jealously and keep very carefully confidential.

Frankly, I never truly understood why. For some reason, I blindly bought the argument that it is “sensitive” and therefore must be kept secret.

Until one day, a number of jobs ago, I was having lunch with a group of secondary school friends who had, despite going to different universities and studying different disciplines, wound up in the same industry.

I’m not sure how our conversation shifted to this, but we found ourselves discussing and sharing with one another how much we earned, what benefits were like at our respective companies and how our salaries progressed in the years we spent there.

It was from that discussion that I discovered that I was earning roughly half what my friends were at the time – a revelation compelling enough to convince me to start weighing my next options.

The topic of being open about what you’re being paid has certainly come up on multiple occasions – we’ve even discussed it here before – and what’s emerging from these conversations looks pretty clear and consistent: we should share how much we earn with one another.

When, and with whom, to share with?

Once you get over the awkwardness of potentially revealing to your peer how much wealthier you must be than them – or indeed, how much poorer you are, perhaps – it’s completely beneficial to discuss and compare notes, especially if you and your peers work in the same or similar industries or sectors.

There is no loss to the person earning more for being open, and the person earning less stands only to gain. The awareness of disparity, or the understanding of where he or she stands relative to their peer in the same industry, aids their decision-making for their next career move (be it to ask for a raise, work towards one, or start looking for a company that will pay them better for the work they’re doing).

Who should you not share with? Personally, at least, I might not necessarily disclose how much I earn with someone who works in my team, if for the sole reason of avoiding resentment on the part of the colleague who earns less, but who perceives themselves to be contributing equally or even more than me. A manager may not find it appropriate to share with their subordinates how much they’re making either – that disparity, while expected, may also turn dicey among the subordinates evaluating and judging whether or not their boss deserves what they are earning.

In fact, I would argue that a company is even more robust and professional in its practice if its managers are not involved in deciding, or privy to, how much their subordinates make. This was the case for me in two of my previous roles as a manager, and I understand in Singapore’s civil service too.

Our leaders should share how much they’re making

But the higher you climb up the corporate ladder, the more important it is that you are open about how much you’re making – especially when you’ve reached the top.

This sentiment seems to be underpinning the public consultation process undertaken by the Singapore Exchange (SGX) that concluded earlier this week.

Chief among the proposed changes to its rules for listed companies are 1) limiting the tenure of independent directors to nine years and 2) mandating the full disclosure of the remuneration paid to a company’s directors and CEO. The latter in particular is making listcos quite unhappy.

Reasons cited usually focus on competitiveness, with companies claiming their top executives may be poached by rivals if their salaries are disclosed.

But enforcing this, SGX has said, will put Singapore in line with global standards. We see this done in the US and in our oft-compared Hong Kong.

And we see, indeed, that Singapore companies aren’t too keen to cooperate. This requirement is actually already in the Code of Corporate Governance, but as BT senior correspondent Ben Paul points out, it’s followed by far less than half.

My colleague Raphael Lim notes the significant difference between full disclosures of pay at this level and that of, say, the rank-and-file like me. He wrote: “Pay is a sensitive issue for individuals. Hardly anyone, if given the choice, would want their full remuneration disclosed in public. But public companies – even those very tightly held or controlled – need to remember they have multiple stakeholders to answer to. Greater transparency on remuneration practices will enable shareholders to assess alignment of interest, and would have to outweigh whatever discomfort each individual may feel.’‘

Stop telling prospective employers how much you’re earning

If I may dwell on just one more point here: As much as it’s important for us to be open about how much we earn with our peers, it’s also crucial to recognise how disclosing your current or last-drawn salary to a prospective employer will compromise your position in negotiations for your next job.

For me, it’s as simple as recognising that the job you are doing now or did prevoiusly is not the one you are applying for. So your salary now (or then) shouldn’t be relevant to the one at your next position.

If a hiring manager asks for your current salary, counter instead with the proposal to discuss what amount both parties would value the prospective role at, and perhaps what you believe it – and you – to be worth.

Unfortunately, the way things are for most of us is exactly the opposite of how it should be. Many of us are more than ready to declare what we currently (or previously) earn to any company that asks that of us, or puts that field in a job application form, but balk at the idea of telling our friends how much we make.

It’s high time for a change – across the board, bottom to top.