Why Millennials & Gen Z Demand Salary Transparency

How much do you think your CEO makes compared to you? You probably have no idea, and that lack of salary transparency is exactly what some younger generations of workers want to change.

Millennials and Gen Z employees are pushing companies for more openness around what the boss earns. The trend shows how priorities are shifting when it comes to salary information. Workers, especially younger ones, believe they deserve to know the pay gap between the C-suite and everyone else.

But corporate cultures have not typically operated with that level of openness. The divide around making salaries public highlights an ongoing evolution in workplace norms and values.

Millennial and Gen Z Employees Demand Salary Transparency

As a millennial or Gen Z employee, you want to know what the top brass makes. After all, CEO salary information directly impacts your own compensation and career growth. When the C-suite is raking in seven figures while refusing to budget for employee raises or professional development, that signals a major disconnect.

Keeps Executives Accountable

When salary information is readily available, it keeps executives accountable. It gives younger workers insight into their earning potential. The CEO may make five times what you do now. But knowing that number motivates you to develop the skills and experience to close the gap over the next several years.

Promotes Salary Transparency

Transparency builds trust between leadership and staff. When the CEO's pay seems fair and equitable relative to the company's success and growth, it shows they have employees' best interests in mind. But when their salary seems excessively high, it damages morale and loyalty. After all, no one wants to feel like they are generating wealth for executives alone.

Better Competitive Advantage

Not all companies will disclose salary details voluntarily. But as millennials and Gen Z come to dominate the workforce, demand for transparency will only increase. Companies that get out in front of this trend proactively will have a competitive advantage in attracting and retaining top young talent. Those that dig in their heels may face mounting pressure from within and find their hand forced.

The bottom line? Salary information matters to your newest and youngest employees. Wise companies will recognize that and open the books. After all, transparency is the currency of the future.

CEO Pay Ratios Reveal Massive Wage Gaps

Have you ever wondered how much more your CEO makes than you? Thanks to new regulations, many companies now disclose their CEO pay ratios, revealing some startling numbers. The average US CEO makes over 300 times what a typical worker earns.

The Reality Behind Massive Pay Gaps

Some major companies have especially shocking ratios. The Walt Disney Company, for example, paid its CEO over 1,500 times what its median employee earned in 2019. At McDonald's, the CEO earned over 2,000 times more. These massive pay gaps highlight the huge divides between executives and everyday workers struggling to make ends meet.

Knowing a company's CEO pay ratio gives valuable insight into its priorities and values. Businesses with more reasonable ratios, closer to 30 or 40 to 1, likely value all their employees more. Those with ratios well over 100 to 1, meanwhile, appear focused on rewarding their top executives at the expense of fair wages for most workers.

Salary Information and Transparency Encourages Fair Pay Practices

Young job seekers who value fairness and corporate ethics must consider CEO pay ratios when choosing between jobs. Nobody wants their work to enrich executives while they stay poor. The younger generation can help close wage gaps and grow the economy by choosing ethical, fair-paying companies.

When huge corporations pay poverty wages while funneling money to executives, it damages society in many ways. But by demanding transparency around compensation and supporting companies with equitable pay structures, you have the power to drive real change. Your voice and your values can shape the economy of the future.

What Steps Can Companies Take to Increase Salary Information Sharing?

Companies must take proactive steps to build trust and transparency with employees regarding salary information. An open salary policy where managers share specifics about compensation ranges and how they determine salaries sends a clear message that you have nothing to hide.

Share Compensation Philosophy

Explain your compensation philosophy and how you aim to pay employees fairly. For example, you pay at or above the median salary for a given position based on  experience, skills, and performance. This approach establishes salary determination based on objective criteria, not arbitrary decision making.

Demystify Salary Ranges

Provide the actual salary range for each position, so employees understand where they fall in the compensation range and what they need to earn a higher salary. For example, a “Level 3” programmer earns between $95,000 to $115,000. This level of detail minimizes speculation and helps employees set realistic goals for career growth.

Explain Salary Adjustments

When providing raises, specifically explain specifically an employee’s salary is increasing and by how much. For example, “Based on your outstanding performance this year and mastery of new technical skills, we are raising your salary by 7% to $102,000.” This level of transparency builds goodwill and trust in the compensation process.

Sharing salary information openly and honestly is the best way to gain employee trust and commitment. While it may feel risky, the benefits of a transparent pay policy—higher morale, less turnover, and a stronger company culture—far outweigh any potential downsides. The key is approaching salary transparency in a thoughtful, principled way.

Conclusion

Salary transparency is becoming the new normal, especially among Millennial and Gen Z workers. They want to know exactly how their pay stacks up against the big bosses. And who can blame them? After all, knowledge is power.

Arm yourself with the salary information you need to advocate for fair compensation. Do not be afraid to move on when a company refuses to keep up with the times. This cultural shift towards openness is only going to grow. Pretty soon, secret salaries will seem downright old-fashioned. The time for change is now. Demand the salary transparency you deserve.