Individuals from the millennial generation are breaking money silence when it comes to their salaries, according to new research by Cashlorette.com and Bank Rate. Their study finds that 63% of people ages 18 to 36 have discussed their compensation with an immediate family member, compared to 41% of baby boomers.
The most significant finding: 20% of millennials talk about their salaries with co-workers. Only 8% of baby boomers report having this type of open and honest dialogue at work. The increase in salary transparency among the younger generation will hold employers more accountable for their compensation practices, and can be especially beneficial to women, who are looking to close the gender wage gap.
If you are an adviser working with millennial career women, you have an opportunity to empower them to negotiate their compensation packages and reach gender pay equity. Taking the time to coach them on money talk skills demonstrates you are interested in helping them accumulate assets today. Ultimately this strategy assists you in fostering trust with the next generation of clients and positioning you and your firm to be the go-to resource for millennial women as they plan for the future, so they can retire and live comfortably.
Here are three tips to keep in mind when coaching clients on salary negotiation and transparency at work.
1. Examine your own money talk mindset. What are your automatic thoughts and feelings about discussing finances at work or at home? What were you taught about money talk by your parents? How might these attitudes impact your ability to discuss your compensation with your family, your friends or your co-workers?
Identifying your attitudes and beliefs about this topic is vital in being able to empower your clients to do the same. Look at what beliefs you have that may hinder your ability to coach these women, and ones that may enhance your ability to discuss this topic. Once you have insight into your money talk mind, ask your clients the same questions. Then coach them to boost their strengths and minimize their challenging beliefs.
2. Help your client put herself in the other person's shoes. A money conversation is not about winning an argument. It is about moving toward mutual understanding.
Encourage a client to approach each dialogue with a healthy dose of curiosity. Have her practice putting herself in her boss' shoes. What might motivate her boss to give her a raise? What data does her manager need to prove to the leadership team that an increase in pay or benefits is warranted?
Spend time generating a list of potential questions for your client to ask so she can fully understand the boss' perspective. And remind her that bosses suffer from money silence too.
3. Learn from each money dialogue. Talking about money is not easy, as there is a longstanding tradition in our society that says discussing finances with others is rude and unnecessary. As an adviser, you can be a role model to your clients by showing them that taking a risk and engaging in a financial conversation can be rewarding.
Remind clients that breaking money silence at work takes time, and one dialogue will probably not land her a big year-end bonus. But over time, she will learn from each interaction. Notice and celebrate her progress.
As an adviser, you are uniquely positioned to help all your clients, including millennial career women, break money silence. It requires you to bust through your own money talk taboos and then show your clients how to do the same.
Kathleen Burns Kingsbury is a wealth psychology expert, keynote speaker, author, and founder of KBK Wealth Connection. Her fifth book is "Breaking Money Silence: How to Shatter Money Taboos, Talk More Openly about Finances and Live a Richer Life" (Praegar 2017).