When Martina, a 35-year-old IT analyst, told colleagues what she earned, they confirmed her worst suspicions. It wasn’t what they said, but what they didn’t say. Martina had seen similar roles to hers being advertised locally, all with a higher salary than her roughly £30,000 package. But when she brought it up with her co-workers, most of whom were men, “they all got uncomfortable”, she says. “None of them told me their salary, just that they were happy enough.” When a role was advertised in her organisation that sounded similar to hers, but with a higher salary, she took it up with management. “It didn’t go well,” she says.
Martina was told there was no budget for a pay increase. She went to HR to ask why new recruits were being paid more and was told all salaries had been benchmarked regionally. All, it seemed, except hers. Martina chased for this to be corrected, but there was always some problem or delay. Her morale was at rock bottom. “I’d had enough.”
She applied for another job. “I thought I would practise having an interview, but I ended up getting an offer.” Martina is now happy in her new, higher-paid role. But she reflects on how sour it became, not just with management but with her colleagues. “Some of them even told me they wished I had not said anything … I am from the Netherlands, where sharing your salary is not unusual.”
In the UK, telling people your salary remains taboo. In a recent poll by an HR software brand, only one-third of people surveyed said they would discuss pay with colleagues. According to the Trades Union Congress, one in five workers in Britain have gag clauses in their contract, effectively banning them from talking about pay.
One of the problems with this is that much of the evidence around pay secrecy – where colleagues don’t know what others are being paid and therefore cannot adequately assess what a company is offering them – shows that it is a major factor in the gender pay gap. So, should employees take matters into their own hands? Could the radical act of sharing your salary between colleagues finally close the gap in British workplaces?
The gender pay gap stands at 9.4%, the same level as in 2017-18, after legislation was introduced requiring employers to publish the information. When mandatory pay-gap reporting was announced, the then prime minister, Theresa May, called gender pay disparity a “burning injustice” that “mars our society” and promised to close the gap within a generation.
But a recent review of the system by King’s College London found it had “no teeth” and was more interested in quantifying the problem than fixing it. It compared pay-gap reporting systems in the UK and five other countries – Australia, France, Spain, South Africa and Sweden – and found the UK to be joint last in effectiveness, in part because it doesn’t make it mandatory for employers to do anything to address the gaps. Plus, it applies only to companies with more than 250 employees, so only 39% of the workforce are included.
The idea that companies would be shamed into action has not played out. The Labour party recently highlighted the fact that women in their 50s – the generation born around the time the 1970 Equal Pay Act was introduced – are unlikely to see pay parity in their lifetime.
For Sandra, a 30-year-old events programmer, a moment of frustration one evening – “bitching in the bar” with colleagues – transformed her entire team. “There was a gap of about £10,000 between me and another person doing the exact same role,” she says. “We all thought it wasn’t very fair.”
Sandra says the timing was right to bring their demands to management because it was already in the process of reviewing its gender pay gap. Everyone on her team was motivated – their boss was already unpopular and employees were frustrated with a culture in which any complaint was taken as a lack of team spirit. But, she says, the real gamechanger was involving their union. “Because there were quite a few of us, we could have them advocate on behalf of us all, and that made it easier. And I never felt HR were really behind us.”
Sandra says her manager had created a culture in which it was seen as anathema to discuss one’s pay, once telling Sandra, after a promotion, that negotiating her new salary was “not allowed”. “I just said OK,” she says. “I thought that was true.” Since then, the whole team’s remuneration has been revised, with clear pay bands and job descriptions introduced. “I’ve definitely realised you need pay transparency at work,” Sandra says.
Nonetheless, we should be wary of potential drawbacks, says Emma Duchini, an applied-labour economist. She agrees that pay transparency can help close the gender pay gap by “increasing the bargaining power of those paid less – usually women” and by tackling “the ‘gender ask gap’, which finds women are less likely than men to ask for pay rises and more likely to ask for less”.
But, she cautions, while you would hope that firms would achieve gender parity by lifting up the lower paid, there is some evidence to suggest that the higher paid – usually men – experience a “reduction in growth” of their wages. Many of us would agree that, in a cost of living crisis, and especially in workplaces where pay is already low across the board, reduction in pay for anyone does not sit right.
“It’s important to say, however, that most of the evidence on this is in the short term,” says Duchini, noting that there has only been one longer-term pay transparency study. That was in the public sector in Canada. Like the short-term studies, it “found a large reducing effect in the gender pay gap, by up to 40% – but at the expense of men’s pay”.
Duchini says it is still necessary to consider which approaches to pay transparency work. Take the forthcoming legislation in the EU to ban employers from asking prospective employees about their pay history. As Jemima Olchawski, the CEO of the Fawcett Society, says, the practice of asking about previous remuneration “means past pay discrimination follows women, people of colour and people with disabilities throughout their career. It also means new employers replicate pay gaps from other organisations.”
The ban is welcome in principle, Duchini says, but she notes that we don’t have a full view on how successful similar bans in the US have been. One study, which has not yet been peer reviewed, found that, on average, such a policy made employers offer lower salaries, “as they prefer to be more cautious”.
Done right, pay transparency can yield enormous benefits – and not just for women. When workers know a colleague is being paid more because they do more, there is no negative impact. In fact, Duchini says: “When it comes to knowing how much your boss is paid, that actually increases effort on the job.” The problem is when we find out how much everyone is being paid without any clear rationale about why it is fair. “If someone only receives info about pay difference and little else, that can lower job satisfaction,” says Duchini, not to mention hasten staff exits.
Michael, a 27-year-old actor, is not sure that he will be able to work with his former television producer again after he and some of his castmates disclosed their salaries to one another. “It’s feast or famine when you’re an actor,” he says. “So, if you do land something where you can properly get paid, you need to.” He and other actors in the “second tier” of the television cast (the rank below headline actors) had found out the show was being renewed and, before renegotiating their contracts, decided to band together. Supported by their agents and union, Equity, they asked for more as a group. It worked. “But it fucked things up between me and the higher-ups,” Michael says.
He says the producers saw it almost as a mutiny and singled him out as the instigator. There was open hostility on set and, at one point, Michael became aware that the producers were trying to “do him dirty” and pay him less than others in the group. He no longer works on the show. In an industry built on personal relationships, he has concerns about the consequences down the line.
Would he share his salary with his castmates again? “I think I’d only do it if it was helpful to someone. Like if a younger actor wanted to know what to ask for at that stage of their career, I could say what I got paid back then.”
For Karim, 41, that desire to be helpful has kept him faithful to the notion of pay transparency. He works for a global advertising agency in a department in which it is not unusual for salaries to exceed £100,000. He is part of an informal network of people of colour working in the industry, where some sharing of salaries happens discreetly to help people through their careers. (In the UK, there is no requirement for mandatory ethnicity pay-gap reporting, although some companies choose to disclose this information.)
Karim says the informal network has helped him champion ethnically diverse staff, such as the younger black colleague whom Karim realised was being paid less than others on the team. “I wasn’t able to raise his salary, but I was able to encourage him to ask for more,” he says. “And I’d try to always speak highly of him in front of the right people.”
Through the network, Karim became aware that he, too, wasn’t getting his dues. “There was definitely an imbalance in how bonuses were being distributed and who was getting promoted,” he says. “There’s so many issues at play, though: race, class, regionality, too, I think.”
For the most part, Karim takes it in his stride; he loves his work and has no desire to move. “Yes, I’d like to be paid more and I feel I overdeliver on my work. Who doesn’t?” he says. But even if sharing his salary with colleagues has negatively affected him, he would still do it, “on the basis of supporting junior talent, be they male or female, at my company or not”.
Indeed, at the heart of any conversation about pay transparency is the question of fairness. People can be genuinely motivated by this, says Duchini, mentioning the male BBC presenters and the CEO of easyJet, who volunteered for a pay cut in the spirit of gender parity.
As for Martina, would she share her salary again? “I would be hesitant,” she says. “Maybe not in the first month. But if I am now the ‘outsider’ on more money than people who have been there longer, I think I owe it to them.”
Some names and details have been changed