Salary secrets: Is it still taboo to discuss compensation?

The scene is a familiar one: You and some colleagues have gone out for lunch or drinks after work, and as you’re sitting around the table the talk turns to salaries. Before you know it, Megan from Accounting is happily telling everyone how much she earns. Almost as soon as you can process it, she’s asking you what you make. Do you share it?

“I’m of the firm belief that an individual’s compensation is their own business and nobody else’s,” Greg McKinnon, president of McKinnon Targeted Recruiters, told Yahoo Canada Finance. “I think it’s very important to maintain that discretion and confidentiality.”

All downside

McKinnon says divulging personal salary information opens up significant risks to those who decide to open this employment Pandora’s Box.

“If you share your compensation with a co-worker and that person happens to be earning less than you, he or she might go to your mutual boss and use it against you,” says McKinnon. “Now the employer is not too happy with you because you’ve created a problem for them.”

McKinnon says colleagues in similar roles who earn less may lack some of your skills, or were hired at a different time when budgets may have been different. Although there may be entirely valid reasons for the disparity, Megan from Accounting may already be seeing red if she thinks you’re getting a better deal than she is.

“There could be a host of different reasons why you’re not being paid the same amount even though you’re doing the exact same job,” he says. “So why put your employer in that position?”

Unfortunately, some loose-lipped employees do just that, but even if they keep the information to themselves they could still make your work life miserable.

“If your co-worker discovers that you’re earning more than they are, they may then try to do something to undermine your position so that somehow you end up taking the fall for something that wasn’t your responsibility or fault,” says McKinnon.

Salary-mad colleagues can jump to the wrong conclusion if they’re not aware of the bigger picture – but by then it’s probably too late to repair the damage.

“I think that people are very quick to judge when they think of you in the context of your earnings,” said Jodi Echakowitz, CEO of Echo Communications. “If you're a high-income earner, people don't stop to consider what costs you may have that you need to cover from that income. Do you have a parent that requires support? Do you have medical costs that aren't covered by OHIP? There's not always the context available to support a discussion like this, so it's better to not begin it in the first place.”

Companies must change, too

Jen Silver, principal at Toronto-based Silver Recruitment, says companies themselves have a role to play by maintaining relatively consistent salary ranges within employee groups. The greater the disparity, the greater the potential for trouble.

“Assume people will talk,” she said. “I have seen some disaster situations that have caused people to resign and go out and look for other jobs because they’ve discovered the company has not been fair.”

While it’s perfectly understandable for employees to want to learn as much as possible about their colleagues’ compensation levels to strengthen their own negotiation position with the employer, Silver says they can easily source the information online. She recommends employees check services like Glassdoor as well as the recruiters’ own websites, as they all publish extensive data by employment field, role and geography.

Keep in mind that geography, in particular, plays a key role in determining how compensation packages for otherwise-identical roles might be structured. A role in downtown Toronto, for example, would likely by default have a higher salary range than the same one in Fredericton.

Whatever the reason, the lesson is clear: Watch what you say when you’re breaking bread with your colleagues. When it comes to salary, the less said the better.