Money is a huge part of all our lives – there is very little we can do without it. Whether it’s paying for the roof over our heads, the food in our fridges, transport to and from work, or for care provisions, many of our basic needs can’t be met without it. Yet it remains one of the biggest taboos.
So big, according to research by Fidelity International, that almost a third of women would rather discuss their dating history than their financial history with a partner.
“With that in mind, it’s less surprising that women don’t tend to talk finances with their colleagues,” Emma-Lou Montgomery, an associate director at Fidelity International, tells AllBright.
“Indeed, just 3% of women said that they’d feel most confident talking money with their work colleagues. And yet your colleagues are likely to be the people who are in the most similar financial situation to you.”
Sadly, the culture of salary secrecy we’re so deeply entrenched in prevents us from accessing this potentially life-changing knowledge from others at no extra cost.
Naomi is 33 and works in banking, where it is “very much frowned upon” to discuss money at work – or in the pub afterwards. “You don’t talk about it, and it’s drilled into you from the beginning,” she explains. “The idea of talking about salaries with your colleagues is just uncomfortable.”
When it comes to discussing her salary with friends, Naomi would only do so with people in a similar profession. “Most of the time I get paid more than other people, and I find that really gross to admit.
“I think it’s just an ugly conversation topic. There is so much competition when it comes to careers and everything else, you don’t want to shove that in someone else’s face.”
Naomi is far from alone in feeling like this. Many of us have a visceral, emotional response to the topic – something that is learnt from childhood and bolstered in the workplace by others who have been similarly conditioned.
Jivan Dempsey is a business change psychologist and coach. “Most of us will have been told as children that talking about money was rude or not the thing to discuss and we tend to carry this awkwardness into our adulthood,” she says.
“How much we earn symbolises many things about ourselves and our place in society, such as our personal power, status and value. It’s also an emotional issue that for some may trigger jealousy, fear and anxiety if you don’t earn as much as your peers. If you are the one who earns more, you can feel uncomfortable that you are boasting or being judged.”
However, Dempsey tells us, overcoming these feelings to be more open about money can lead to “more empowered conversations and positive outcomes in the longer term” – something Amy, 28, who works in marketing, found out the hard way.
“It was in my contract I wasn't allowed to talk about salaries with colleagues,” she reveals. “I got a new job, and they offered me a salary of £22,000. I was there for two years, asked for a pay rise once, and it was refused. I was at my leaving party when a colleague told me that a worker doing the same job as me was being paid £8,000 more. It was substantially higher, and that was the first inkling I had that companies could do that.
"After I’d left, I kept up a relationship with my line manager. She said she had been told by the company bosses that it was her job to get the best people for the least amount of money. I lost faith in business on hearing that,” Amy continues. “I felt I’d been taken for a real ride and it’s definitely affected my career.”
“At work, although it’s not illegal to discuss salaries with your colleagues, [many] employers prefer that you don’t,” adds Dempsey.
What both Amy and Dempsey are describing is the ultimate contractual scarecrow that prevents colleagues discussing what they earn by instilling a culture of fear: salary secrecy clauses. While they might sound frightening and official enough to stop people talking, these clauses aren’t easily enforceable.
David Clift, chief people officer at Learning Technologies Group, has been an experienced HR consultant for 15 years. “If there is a salary secrecy clause in your contract and you told someone your salary, they would find it very hard to dismiss you and incredibly difficult to enforce it,” he says.
Under the Equalities Act 2010, restrictions were placed on salary secrecy clauses that made them unenforceable if an employee wished to discuss their pay in order to determine whether they are being paid less because they are being discriminated against based on characteristics such as race, gender and disability.
Despite this, research by the Trades Union Congress (TUC) found that one in five workers have been told they are not allowed to discuss their salaries at work.
Frances O’Grady, the general secretary of the TUC, wants the clauses to be made illegal. “Pay secrecy clauses should be banned,” she tells AllBright. “They are a ‘get out of jail free’ card for bad bosses. They stop workers from challenging unfair pay, allow top executives to hoard profits and encourage discrimination against women and disabled people.”
Former wealth manager Vivi Friedgut, founder of financial education start-up Blackbullion who previously worked as a wealth manager, agrees that regardless of the scale of earnings, honesty is the best policy for businesses and employees. “I believe that sunlight is the best disinfectant,” she says. “Being transparent about salaries will allow people to answer difficult questions about why they are paid differently.”
It isn’t just the British who have issues with salary secrecy. In many European countries, including France and Switzerland, discussing pay is deemed extremely rude. However, in Norway, pay transparency is legally enforced and everyone’s salary can be found via a national database.
The initiative has not been completely without issues, however. According to a BBC report, there were spates of children being bullied at school having learned how much or little their classmates’ parents earned. On the flip side, Norway has next to no gender pay gap – compared to UK gap of 17.3 per cent in 2019. According to the equality charity The Fawcett Society, at the current rate of advancement it will take more than 60 years for us to close that gap.
Getting rid of – and understanding more about – pay secrecy clauses is one way of doing it, but how else can we begin to fight the culture of financial secrecy?
“I think we need to do with money what Carrie and her girlfriends did with Sex and the City,” says Friedgut.
“We need to get rid of shame and secrecy, and give financial conversations a spotlight and space, as well as giving people the language to speak about it.
“Firstly, we need to remove the idea that anyone is going through anything financially that anyone else is going through. I ran a workshop not so long ago with a company. Each group I spoke to were segmented by salary. People asked very similar questions, whether they were on a starting wage or earning very highly.”
By raising financial understanding, says Friedgut, we can start to demystify things like pensions, investing and savings, as well as educating individuals to negotiate a better salary for themselves.
We also need to know how to challenge employers if we do believe we are being paid unfairly. “Email your HR department and tell them you’d like to raise a grievance because you suspect someone is being paid more than you,” says HR expert David Clift.
“Your employer has a duty to look into your claim and come back to you. If you’re not happy with what they come back with, you can raise an appeal with them in the same way.
“If you are not satisfied with the response from your employer, the ACAS early conciliation service is one of the simplest and easiest ways to resolve the dispute. And if you still don’t feel you’ve been fairly treated, you can take it to a tribunal, which is free for employees.”
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