Canada Markets closed

Talk openly about salaries to close the pay gap, says compensation strategist

The common advice is to not talk money, politics or religion with colleagues but some experts say discussing salaries isn't rude — in fact, it's necessary to close the pay gap between genders. 

Annika Reinhardt, a negotiation and compensation professional with the Vancouver-based company Talent Collective, says transparency is key to spotting inequalities and negotiating pay.

"Talking openly about compensation, especially for women, helps us close the gap between the genders by being able to understand better what our colleagues are making," Reinhardt said.

Canadian women earn 87 cents for every dollar earned by men, according to a 2017 report from Statistics Canada. For women in minority groups, the gap is even more substantial.

Part of the problem is women are less likely to ask for a higher salary than men, she told CBC host of The Early Edition Stephen Quinn.  

"It's not always employers saying 'I want to pay one person more than the other,'" Reinhardt said. "It's also this notion of women potentially not negotiating enough."

A study by Glassdoor last year, for example, found that 68 per cent of women in the U.S. accepted an initial salary offer without negotiation.

Not knowing a company's salary range and what others are earning makes it more difficult to negotiate, Reinhardt explained.

"There is a bit of knowledge gap, not knowing what to ask for or how to ask," she said.

'It definitely pays off'

For the last couple years, Reinhardt has collected information from women about compensation details and their field of work.

"The response was great. People have been using it to obviously look at where they stand but I also think that this is just the first step," she said.

She wants to see more people — men and women, employers and employees — involved in sharing information about compensation.

That doesn't mean demanding everyone disclose what they earn, she emphasized, but being willing to broach the topic with colleagues and fostering a sense of corporate openness at the management level. 

Businesses, for example, should have a clear compensation philosophy.

"When new hires are coming in, you can explain why pay is set out the way it is and how you can actually move up within the range," she said.

"It's more work but it definitely pays off and it will help close that gender gap."   

To hear more, click on the audio link below:

With files from The Early Edition.