Pick any popular luxury watch. Open Chrono24 on your phone. In under a minute you know what the model sells for, what condition pushes the price up, and what a fair offer looks like.
Now ask one of your senior engineers what the person at the next desk earns.
They don't know. Or they think they know, from a Slack DM, a Levels.fyi page, or a pint after work. Either way, the answer came from somewhere other than you.
A conversation with Tony Ge about luxury watches got me thinking about this gap. A $35K watch has a public price history. The people who build your product don't. We've made it easier to value a wristwatch than a person.
The Envelope Is Already Open
Most companies treat pay like a sealed envelope. Nobody talks about it. HR tells managers to dodge the question. Offer letters come with a quiet hint to keep the number private.
It doesn't work. Your engineers compare notes. They check salary sites before every review. They know which new hire came in above the people who trained them.
I noticed a post trending on r/todayilearned this week: Norway publishes everyone's income, net wealth and tax paid online. Over 34,000 upvotes and 2,200 comments. People want to know how the system works. Your team wants the same thing.
The Law Is Opening It For You
If you employ people in the EU, secrecy stopped being a choice this year.
The EU Pay Transparency Directive had a transposition deadline of 7 June 2026. According to Employsome's employer guide, it requires you to:
- Give candidates the starting pay or pay range before the first interview
- Stop asking candidates about their salary history
- Tell employees, on request, their own pay and the average pay by sex for people doing the same work
- Drop contract clauses banning staff from discussing pay
- Run a joint pay assessment if a gap of 5% or more in a worker category has no objective justification
The same guide reports only four member states had full legislation in force by the deadline. Don't read slow governments as a reprieve. The rules are coming, and your competitors in Dublin and Amsterdam will post ranges in their job adverts before you do.
Transparency Has a Cost. Pretending Otherwise Is Dishonest.
I'm in favour of pay transparency. I also think most of its champions oversell it. The research is messier than the LinkedIn posts.
It lowers average pay
Zoë Cullen and Bobak Pakzad-Hurson studied US state laws protecting workers' right to ask about co-workers' salaries. Their Econometrica paper found wages fell by about 2% after those laws passed.
The reason makes sense once you see it. If every salary becomes visible, the employer says no to the one person pushing for more. Paying them more means paying everyone more. The individual negotiator loses leverage. The effect was muted where workers had little individual bargaining power in the first place.
It hurts the people at the bottom
David Card and colleagues told a random group of University of California staff about a newspaper website listing every UC salary. The results were lopsided. People paid below the median for their unit and job reported lower pay satisfaction and job satisfaction, and became more likely to look for a new job. People above the median felt no happier. The damage sat in the bottom quartile, and rank mattered more than the size of the gap.
Norway shows the same pattern at national scale. When tax records went online in 2001, Ricardo Perez-Truglia found the gap in happiness between richer and poorer people grew by 29%, and the life satisfaction gap grew by 21%. Norwegians used the sites to snoop on friends and relatives so much the press nicknamed it "tax porn".
It closes gaps, partly by slowing the top
Denmark forced firms to publish gender-split wage statistics in 2006. Bennedsen and colleagues found the gender pay gap fell by two percentage points, 13% of its previous size. Most of the change came from slower wage growth for men, not faster growth for women. Profits didn't move, because productivity dipped enough to cancel out the wage savings.
So Why Do It?
Because every one of those costs lands on you whether you publish or not.
Your bottom-quartile engineer already suspects where they sit. The Card study shows what happens when they find out for sure: they start interviewing. Secrecy only delays the moment, and it lets a rumour set the number instead of the truth.
Secret systems reward whoever pushes hardest, not whoever delivers most. Your best negotiators out-earn your best engineers, and nobody sees it. Cullen's 2% drop comes from ending one-off deals for people who push hardest. I don't count this as a loss. Pay tied to negotiation skill is a bias, and it lands hardest on people who learned never to ask.
The watch market works because price and value travel together. A buyer sees the number and the reasons behind it... box and papers, service history, condition. Nobody resents the premium for a mint example, because the reasons sit in plain sight.
Pay works the same way. People accept differences they understand. They resent differences they have to guess at.
What I'd Do On Monday
Fix the bottom quartile first
Card's data says the pain lives there. So does the flight risk. Before you publish anything, pull every salary in each role and level. Find the people sitting low without a reason you'd defend out loud. Fix them. Publishing bands before you do this turns an audit into a resignation letter.
Write down the criteria
The EU rules demand it, and your team deserves it. What moves someone from one level to the next? What earns the top of a band? If it won't fit on a page, you don't have a pay structure. You have a set of past negotiations.
Publish ranges, internally and in job adverts
Levels and bands, visible to everyone. Ranges on every job advert. Your candidates will look for them on Levels.fyi anyway.
Stop the side deals
The counter-offer for the engineer who threatened to leave. The bump for the loudest person in the review. Each one looks cheap on its own. Under transparency, each one becomes a precedent you owe everyone else. Good. Stop making them.
Teach managers to explain pay
My research found 99.5% of people had worked for one or more types of bad boss. A manager who shrugs and says "HR sets the numbers" is one of them. Every manager on your team should explain, in plain words, where each of their people sits and what it takes to move up.
The Real Question
A watch dealer who hid prices and made every buyer guess would lose customers to the dealer down the road who didn't.
You're in the same market. Your engineers are the buyers, and every other dealer's prices sit one search away.
So open the envelope. What will your team find inside... a system you'd explain with pride, or a pile of old negotiations you'd rather they never saw?