Why you should tell your friends how much you make
A few close friends and I recently told each other how much money we’re making. It was a topic we hadn’t touched in more than 10 years of friendship, and it didn’t come up until we’d had a few glasses of wine.
Why is talking about salary among friends so taboo? One 2015 survey found that even 43 per cent of married couples couldn’t correctly identify how much their spouse makes.
While sharing salary information probably isn’t a conversation you want to have around the water cooler, here are some reasons why talking money pays off.
Find out what you’re worth
Knowing what your peers are making, especially during the early stages of your career, is a good way to find out what you’re worth and which companies or industries pay better than others. Plus, it can put the spotlight on salary negotiations, giving us a better idea about when to negotiate, how to do it and how much to ask for.
“I have (and continue to) share my salary with co-workers and friends. It’s interesting to know where you stand, what type of person your employer promotes, and whether experience or education have a greater influence on salary,” said Eric Valant, a paramedic and hatchery technician living in Courtenay, British Columbia.
Andrew Mullins, who works in the television industry in Toronto, Ontario, agrees: “In my industry there are common rates for different job titles. I didn’t want to ask friends what they were making at first, but after I asked, I realized I was being underpaid.”
Bridging the wage (and knowledge) gap
Talking salary can be especially beneficial among women, who make about 72 cents for every dollar a man makes doing the same type of work. Millennials (especially female millennials) are also less likely to negotiate salary, which means money could be left on the table. Being open with your peers about what you make could provide you with valuable tips, or simply encouragement, when it comes to negotiating your salary.
On the other hand, talking money with friends could quickly cause tension. You might wish you didn’t know how much a close friend or co-worker is making you once you find out.
“I am usually absolutely in favour of being transparent. However, when it comes to salaries, I don’t share that information with my friends or colleagues,” said Marisa Baratta, an editor living in Toronto, Ontario.
Like many, Baratta grew up learning that it was bad manners to talk about money.
“When I was younger, I remembered learning it’s not a good idea share your salary, and that feeling stuck with me,” she said.
Breaking the salary-sharing mould
A don’t ask, don’t tell mentality is common when it comes to salary, but with the rise of our share-everything culture, salary talk is slowly becoming less taboo. Some private sector companies are even making salaries completely transparent among their employees.
For example, Buffer lists the salary of its entire staff online because, according to the tech company, “transparency breeds trust.” Toronto public consultation company MASS LBP also discloses staff salaries “because it seems like the right thing to do,” according to their website (their staff make either $55,000 or $75,000).
MASS LBP is one of 30 of Canadian companies that are Wagemark Certified, meaning that the ratio between highest and lowest earners is competitive and sustainable. The certification offers businesses a way to be more transparent about their pay model without having to publish exact salary info.
While programs like Wagemark are optional in Canada, a recent ruling means that many publicly-traded U.S. companies will have to disclose ratio of CEO to worker pay beginning in 2017, suggesting that salary transparency is on the rise.
Money over manners
Discussing salary openly and honestly with your friends and family can help you get a better sense of your worth in the workforce, as well as when you should be asking for more money.
Google and websites like Glassdoor are also a good way to find out salary information, but hearing first-hand from someone you trust that you aren’t being paid what your worth is sure to make you think twice before accepting the salary you’ve been offered.
Even a small jump in salary can equal hundreds of thousands of dollars in the long run. That’s an education for your kid, a home or an earlier retirement.
When it comes to your salary, it pays to know where you stand. Of course, there is always a counter argument to make.