3 Companies Where Everyone Knows Exactly How Much Money You Make
Ever been curious how much money your co-workers earn?
Of course you have. And in an age of growing openness, where we frenetically document every detail of our lives, it seems like salaries are the last bastion of privacy.
But, that could be changing.
A small cohort of companies have begun to embrace the concept of “transparent” or “open” salaries, where every employee knows exactly how much everyone else earns.
Because open salaries can help reduce the wage gap, increase employee satisfaction and retention rates, and keep poor negotiators from being punished.
Want to learn more about this radical practice — and how it could help you? Keep reading…
The Argument for Transparent Salaries
As noted above, transparent salaries can accomplish different goals. Among them is the fact they’re a powerful force in attracting — and pleasing — employees.
For example, tech company Stack Overflow created a public salary formula calculator, and now its job listings see 75% more clicks.
It also makes a difference for current employees.
“Even underpaid workers’ job satisfaction more than doubled — rocketing from 40 percent to 82 percent — when they knew why they were paid what they were and felt free to talk about compensation openly,” writes Buffer’s Courtney Seiter, citing a PayScale survey of 71,000 employees.
Or, as she explains: “How we perceive what we’re paid matters more than what we’re actually paid.”
In fact, the survey found that a company’s ability to “communicate clearly about pay” was one of the top predictors of employee satisfaction — ranking more important than even career advancement opportunities and employee appreciation.
Of course, happy employees do better work and stay longer, which in turn is great for business.
3 Companies with Transparent Salaries
So, who’s giving the open salaries a try? Here are three of the flagship companies:
Earlier this year, Forbes called SumAll a “champion for salary transparency.” CEO Dane Atkinson admits he used to abuse the secretive salary system.
“Many times I paid two people with the very same qualifications entirely different salaries, simply because I negotiated better with one person than another,” he told Forbes.
So when he launched his new company, he did things differently.
“When new employees join, they are assigned to one of nine salaries, all fixed based on the position,” Forbes reports. “The salaries range from around $35,000 to $160,000. Salary raises are tied to market conditions and to company performance.”
And any employee can see those salaries at any time.
“I don’t know why it’s so conditioned that everyone should hide their salaries,” Atkinson told Slate. “Now that we’ve experienced [open salaries], the rest of the world seems even more alien.”
Want in? There aren’t any openings at SumAll at the moment, but I’d say it’s still worth a bookmark.
This social media marketing platform takes the transparency idea a step further: It posts salaries online, for all to see.
Pay is based on factors like role, cost of living, loyalty and experience. You can even use its salary calculator to determine how much you’d make at the company.
In a blog post about their policy, the co-founders wrote: “There are many reasons why we believe salary transparency is such a powerful force, and we’re humbled and excited to keep iterating in this area, and keep starting conversations that can have an impact on the industry.”
And, yes, Buffer even has a few open positions (all are entirely remote).
3. Whole Foods
The healthy grocery store everyone loves to hate, Whole Foods is one of the oldest players in the transparent salary game.
Its salaries have been open since 1986, just six years after its founding, Business Insider reports.
“If you’re trying to create a high-trust organization, an organization where people are all-for-one and one-for-all, you can’t have secrets,” co-CEO John Mackey explained.
He also figured the practice might motivate other employees.
“I’m challenged on salaries all the time,” he said. “‘How come you are paying this regional president this much, and I’m only making this much?’ I have to say, ‘because that person is more valuable. If you accomplish what this person has accomplished, I’ll pay you that, too.'”
Makes sense, right? (P.S. Here’s the Whole Foods careers page.)
Perhaps it’s time we’re all more open about our salaries — in any way we can be.
Though tech company GoDaddy hasn’t made salaries transparent, for example, it recently created a formula (like Buffer) to determine a salary range for each position.
“It’s an emotional and personal conversation, and this lets us have that conversation constructively,” one manager explained to the Wall Street Journal.
If you’re not in a position of power at your company, you can still use these concepts to advance your career — and maybe even your peers.
Contribute data to sites like PayScale and Glassdoor, and do your research before negotiating your salary. Not doing so could cost you more than $65,000 in the end!
And, if it’s allowed at your workplace, don’t be afraid to share your salary with friends and colleagues.
Because, as SumAll’s Atkinson explained to Slate:
“Data transparency creates natural optimization. It creates a more effective meritocracy.”
Your Turn: What do you think of open salaries?
Susan Shain, senior writer for The Penny Hoarder, is always seeking adventure on a budget. Visit her blog at susanshain.com, or say hi on Twitter @susan_shain.