Making pay public is dumb: How salaries work in the real world

There are new calls for pay transparency in the private sector. They miss the mark on how salaries work.

A Toronto group is demanding legislation that would require employers to make all salaries public. The Equal Pay Coalition believes that having everyone’s wage and pay agreements published will help ensure that everyone gets paid the same amount for the same jobs.

Says Coalition Co-Chair Fay Faraday (quoted in the Toronto Star), “The reality is that having discrimination-free wages is a non-negotiable. There is no other starting point for this discussion.”

And frankly, that statement indicates what is wrong with their theory. The fact is that everything is negotiable. And that is precisely why people earn different salaries for their jobs. Negotiation. Not everybody deserves to be paid the same amount.

People deserve to be paid exactly as much as they are able to negotiate for themselves on the job market. Knowing your coworkers’ salaries only poisons the atmosphere at work. If you were happy to be hired in a role that paid you $70,000 – what good does it do you to know that Sam at the next desk makes $75,000?

It doesn’t diminish your $70k; it just makes you less happy about it. Maybe Sam had an extra credential your that employer wanted, or was poached from a competitor, or was hired at a time the company was in a better market position, or is better at actually doing the job. All of these things – and many others – affect starting salaries and raises.

Wage negotiations are not about who you are, they’re business transactions. They’re not personal, they’re based on the value you bring to an employer. So, in salary discussions, don’t talk about how much you need the money or the fact that Sam makes more than you do. Your financial needs are none of your employer’s business, and Sam’s salary is none of yours.

Also, unless your employment contract specifies salary increases at regular intervals, you also don’t deserve a raise simply because you have been with the company for a certain period of time. Showing up isn’t an achievement. It’s strict minimum. Strict minimum doesn’t earn you higher wages.

Longevity is not an accomplishment. And that is what really earns you more money. Accomplishments. When negotiating your salary, you need to make a business case for how the value you bring to the organization is worth more than is currently being offered in return.

Or you have to take the accomplishments you’ve made for one employer and use them as leverage to entice another company to hire you for more money.

In either case, the key to earning more money is demonstrating how your work is drives increased value to the company you work for. Proving that there is a worthwhile ROI in paying you a higher wage.

You deserve to earn exactly as much money as you can negotiate for your work. Be more productive, creative, and innovative than Sam. Be a sharper negotiator and the money will follow.

Here’s a quick look at the average Canadian salaries by region and industry as a starting point for your future negotiations. (But as I say in that article, don’t be average. Show how your work and accomplishments are above average, and you’ll make more money than these. That’s how salaries work in the real world.)

Comments