The real reason you shouldn’t ask your coworkers how much they make

According to the Pew Research Center, the past 15 years haven’t brought significant progress in gender or race pay gaps. While some believe that salary transparency plans will help even this playing field, the truth is that these initiatives often lower wages.

Below we explain why this happens and offer five tips for your next salary negotiation.

When knowing too much backfires

We live in a world where information is abundantly available, and being in the know often leads to more negotiating power — and control. It’s only natural to think that you can use data like how much your co-workers make to your advantage when negotiating your salary. But, according to a 16-year study conducted by the National Bureau of Economic Research, salary transparency has actually resulted in an overall 2% decrease in pay. 

When workers and employers have access to the same information, some employees lose negotiating power.  If you’re a software engineer making $90,000 a year, and all the other software engineers are making $90,000 too, your argument that you deserve $110,000 is an uphill battle.

Pay transparency assumptions

With decades-long inequality in pay, most transparency initiatives start with good intentions, but they don’t always lead to the expected results. As Elena Belogolov of Cornell’s human resources department stated in a 2016 study, “When people don’t know each other’s pay, they assume they are underpaid.”

5 tips for your next negotiation

Knowing your worth is vital when negotiating your next salary, but don’t base it solely on your co-worker’s pay, as they may live in a lower-cost area than you, which has an impact on wages.  

• If you don’t ask, the answer will always be no. Only 4 in 10 employees will negotiate their salary, so it’s a lot less crowded at the negotiating table than you think. 
• Always ask for the top of your range. For example, if the average person in your field makes $70,000 to $80,000, start at $80,000 so you have room to reach your target number. 
• Timing matters! While there is an old sales trick that says you will close your big deals on Thursday, or that major discussions should take place in the morning, you know your boss best. Use that inside knowledge to pick an ideal time for this important conversation.
• Remember, data can tell different stories.  You — just like the hiring manager — can always frame the data to support your point of view.  
• Have a list of valuable, non-salary items ready for discussion. If they aren’t able to increase your salary, can they pay for a certification, graduate courses, conference registration, or increase your paid vacation days?