Why are salary discussions still taboo?

Gen Z and millennials are more likely to talk about how much they earn compared with older generations

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A study has shown a drastic difference in how Generation Z and millennials, compared with Baby Boomers, talk to their peers about salaries.

About 37 per cent of Gen Z (between 18 and 24 years old) have asked their close friends how much money they make, according to a recent survey of 1,000 Americans conducted by Go Banking Rates.

That compares with roughly a quarter of millennial respondents (27 per cent of those aged 25 to 34 and 25 per cent of those aged 35 to 44), 15 per cent of Gen X, and only 4 per cent over the age of 65, the survey found.

Although the younger generation is much more open in talking about their salary with colleagues as well as friends, it is still a taboo area with those aged 45 to 54.

The survey stated that only 14 per cent of this age group have had an open discussion with their colleagues regarding salaries.

However, in recent years, measures have been put in place around the world to aid transparent and open conversations about pay.

In the US, for example, New York State has passed legislation for salary ranges to be posted on job adverts.

In March, the EU Parliament approved pay transparency laws, with other governments expected to follow suit.

However, in the Middle East, these laws still lag behind; a 2022 survey by PwC recommended that companies should commit to pay transparency, based on responses from more than 1,500 people.

While pay transparency may not be widespread, it clearly holds value for employees in the region.

Why are salary discussions still taboo?

From an early age, society instils the idea that discussing what you earn is a private affair – it is impolite and too personal to talk about.

These deeply ingrained social norms discourage people from being open but this could potentially create a block in their career progression.

According to Tiger Recruitment’s latest salary survey, the top reasons people avoid asking for a pay rise include being uncomfortable talking about money or being worried their boss would question their commitment.

In other words, people who feel they deserve a pay rise, or who need one due to the rising cost of living, often suffer in silence rather than broach the subject with their employer.

Equally, openness in salary discussions can make an employer nervous. They worry that if employees find out what their colleagues earn, they will begin to demand more – plus an imbalance of salaries could lead to resentment and mistrust.

It is increasingly clear that employees simply want to be paid a fair wage in line with average industry ranges, in accordance with their skills and experience.

Why does pay transparency matter?

Trust in the workplace is vital; fostering it right from the beginning is a valuable focus for organisations looking to build strong employer brands that establish credibility and help them compete for top talent.

One of the most important predictors of employee attraction and engagement is communicating honestly about pay.

A recent survey by Adobe found that 85 per cent of Gen Z employees were less likely to apply for a job if it did not disclose the pay scale.

In the current employment market, when quality talent is at a premium, this should be an important consideration for employers.

Some of the stats behind the UAE's hiring boom

Some of the stats behind the UAE's hiring boom

Another issue is that a lack of transparency creates a challenging environment for employees to negotiate better pay.

This can be a major disadvantage for people who do not have the confidence to ask for what they are worth, compared with their more confident peers.

Salary discussions in the workplace also allow employers to put in place valuable benchmarks for career growth and development, which provide employees with a road map of their career trajectory and future potential.

In turn, employers can expect increased loyalty and reduced staff turnover, which positively affects the bottom line.

Overcoming the taboo of salary transparency and ending the culture of pay secrecy is crucial for building trust and empowering people to advocate fair compensation.

Encouraging an open and honest dialogue helps ensure that employees receive the recognition they deserve.

As the UAE continues to progress, will pay transparency weave its way into the country’s unique cultural and economic landscape?

Zahra Clark is head of the Mena region at Tiger Recruitment

Updated: June 05, 2023, 5:04 AM