Should your colleagues know your salary?

One big financial firm has split the tea on employee salaries - from junior staff to directors. Do you want to know if your colleagues earn more than you?

One big financial firm has spilt the tea on employee salaries - from junior staff to directors. Do you want to know if your colleagues earn more than you?

One of the biggest firms in Australia has released the salary details for all its staff, from graduates to directors  - a move which is going to make a lot of people "uncomfortable", as one expert put it. 

Since Tuesday, we have been able to see what kind of money our finance bro mates at financial services giant PwC are earning. 

PwC, which employs more than 8000 people, is the first big accounting firm to introduce so-called pay transparency - unveiling the salaries attached to different roles  in the business. If you know your colleague's job title, you know how much they take home each year (within a range).

Experts say the move could trigger change throughout the financial and professional services industry.

New graduates salaries, which require an undergraduate degree, start at $69,000.

The lowest salaries in the business are in associate roles (non-client facing), starting at $55,600. At the top end of the published scale is a director in a consulting business, who could receive a up to $362,588.  The firm also disclosed that its 800 partners can earn anywhere between $340,000 and $3,675,000.

While PWC is giving more information than ever before, publishing salary ranges (as opposed to exact figures) can still leave leave some guessing. For example, an associate can still earn $60,000 less than a colleagues also in an associate role. The variance can blow out to $180,000 as you move up the ranks to director. And of course a partner can earn salaries closer to a high-end director or stratospheric pay packages. 

Disclosing salary ranges "will help our people to understand where they sit now and what their pay trajectory is in the future, helping them to see the full range of possibilities throughout their career," PwC chief executive Tom Seymour said.

"Transparency is key to attracting top talent and improving trust, morale and engagement." 

"It’s going to start a lot of conversations"

Economist Conrad Liveris told The Oz accounting firms and professional services firms were struggling to fill vacancies with record low unemployment rates.

"PwC are very attuned to the interests of people broadly in their 20s and are keen to attract them ... They are putting themselves in position where they look progressive and innovative. It's a real signal to workers that they are a transparent place to work and they are ahead of the curve," Mr Liveris said.

"And it's a pretty bold move, you have to admit. No one else at this level has done it. Some smaller organisations have done it previously, but no one on this scale."

He said over the next 2-3 years, pay transparency would be solely taken up by professional services firms.

"Big professional services firms, banks, ASX-listed companies, they do have better conversations about pay and things like that. It's not to the same extent in mid-sized firms where people aren't being paid the top dollar," Mr Liveris said.

"It’s going to start a lot of conversations internally. People are going to talk about money a lot and that’s a very uncomfortable convo for lot of people."

As to why the finance sector appears to be one of the first industries to take big strides in revealing salaries is in part, according to Mr Liveris, due to the strong competition for good staff due to a slow down in migration in and about Australia following the pandemic.

As well as accounting firms other big professional service firms, banks, tech start ups like Cogent, and a litany of ASX-listed companies are now having the conversations about disclosure.

"The accounting firms and professional services firms they are at a wall. They cant get enough employees to fill jobs. They need to position themselves as progressive and innovative," Mr Liveris said. 

USYD associate professor in HR Management Angela Knox argued "salary transparency should be provided in all organisations".

"Salary transparency promotes equitable wages, particularly for women and minorities ... and is critical in terms of narrowing wage gaps that already exist," she said.

"There's certainly evidence that when employees perceive inequity and lack of transparency that leads to dissatisfaction, withdrawal of effort and turnover."

PwC's overall gender pay gap for partners sits at 16% while the gender pay gap for employees is 11%. They were named as a Workplace Gender Equality Agency Employer of Choice for 2022, as they have been for 13 years. 

'Problematic'

RMIT Economist Leonora Rise said for companies with worse track records, pay transparency could be problematic. 

"We have examples where companies who have enacted pay transparency risk jeopardising an employees morale and productivity," Dr Rise said.

She said once you find out you are being paid on the lower end of the scale, there may not be much you can do with that information. 

"The research shows only senior people have wage bargaining capacity can use information to their advantage. Lower skilled, more junior workers have less capacity to act on that information."

Pay disclosure practices vary significantly around the world. 

Full disclosure

In Norway, every person's total income and tax paid is made publicly visible on the tax office's website.

The New York City council passed a salary transparency law which requires employees to give a minimum and maximum salary on job ads.

The UK launched a pilot program last month where participating employers list salary details on job adverts and stop asking about salary history during recruitment.

Here at home, Labor outlined plans to introduce "Same Job Same Pay" laws to ensure genuinely negotiated enterprise agreements are not undercut by "cowboy labour hire firms and outsourcing".

Gender pay gaps

The government, in its Women's Budget Statement, highlighted the recommendations made by a review into laws around gender equality at work to have organisations publish their gender pay gaps at employer levels to improve transparency and "requiring large employers (of 500 or more employees) to set measurable gender equality targets."

In the name of The Father, The Son and Rhianna: "Pay me what you owe me".