The top driver for pay transparency practices in Asia is “regulation and compliance” (72%) according to a 2024 report by Aon.
Pay transparency is gaining traction as organizations adapt to new regulations, but one part of the world is still playing catch-up as discussing compensation openly remains taboo.
"In contrast to the United States and some European markets, pay transparency and disclosure requirements in Asia are still evolving," according to a 2024 report by management consulting company Aon.
Although about 80% of organizations surveyed in Asia consider pay transparency important, "most Asian markets do not have specific pay equity and transparency guidelines," according to the report which surveyed more than 350 human resource professionals across Asia.
"In many Asian companies, employees are typically discouraged from sharing their salary information with their colleagues. This practice is often outlined in employment contracts or treated as an unspoken rule," Peter Zhang, head of talent solutions, APAC, at Aon told CNBC Make It.
"This may be attributed to cultural norms and limitations in the maturity of compensation practices and processes," he said. "In addition, Asian economic and labor markets are more dynamic and volatile. Employers tend to pay a premium to selected groups of talent to gain a competitive advantage."
Another obstacle is the lack of "management maturity" and "skills in handling sensitive compensation conversations" in the region, said Zhang.
Whereas places like California and New York have laws that require companies to share pay ranges on job postings, most companies in Asia (84%) limit pay transparency to internal stakeholders.
Money Report
Currently, the top driver of pay transparency practices in Asia is "regulation and compliance" (72%) according to the report. But rather than waiting for new legislation to come along, some Gen-Zers and millennials in Asia are spearheading change online.
Young people lead the movement
Feeling out of the loop? We'll catch you up on the Chicago news you need to know. Sign up for the weekly> Chicago Catch-Up newsletter.
Young people around the world have started talking on social media about how much they make.
Singapore-based Karishma Jashani, 28, has garnered millions of views on TikTok by discussing her career, including how much she makes working in technology sales.
Last year, she disclosed that she earns more than 300,000 Singaporean dollars (about $223,000) in a TikTok that has garnered about 500,000 views.
"I think that the whole aim for me to share was to empower people," Jashani told CNBC Make It. "I'm not trying to gatekeep it — like only certain people can live this way ... no, the fact is that anyone is able to do it."
Jashani is just one of the many young people in Asia who are working on increasing pay transparency in the region. Prestine Davekhaw is on a similar mission.
In 2022, the 32-year-old founded MalaysianPAYGAP, a brand with over 300,000 followers across Instagram and TikTok known for their man-on-the-street interviews asking people how much they make.
As a freelance photographer, Davekhaw said it was difficult to price her services when other people in the industry were so guarded about their own rates. So she began crowdsourcing and sharing the information on social media.
"I actually started on Instagram, and within one week, we went super viral in Malaysia ... and then that's when I realized that there are so many industries that need this," she said.
Through these street interviews, she found major generational differences in knowledge and attitudes on career and finances. Davekhaw said younger people were much more open about sharing their salaries, while older generations were more cautious.
"They believe that [they] have to remain humble, [they] have to be low profile, or they're afraid that they'll be invited by their companies' HR departments for a talk," she said.
She also noticed cultural differences when it comes to the salary conversation.
"While doing street interviews in Malaysia, when we approach Malay [people], they are very open to talk about it, but it's harder to approach Chinese [people]," she said. "For the Chinese, there's a lot of teaching since we were young that you're not supposed to 'show your gold'... so everybody's quite reserved."
Davekhaw also said there are gaps in knowledge when it comes to speaking up at work.
"The difference is quite stark," she said. "It definitely depends on your social class, your family background, and where you're educated, because we [see] that people who graduated from top universities know that they're supposed to negotiate," she said, while others may be taught to "be grateful" and maintain the status quo.
"I think our role to advocate for pay transparency is actually [done] through conversation," she said. "If it's a taboo to talk about pay transparency, then this taboo is a cultural phenomenon... that also means that we have the power to shape a different culture to remove the taboo."
Davekhaw concluded people will talk anyways, so it's just a matter of time before organizations in Asia recognize this fact.
"It's up to HR [departments] whether they want to retain their own employees or not," she said.
The HR perspective
Poor salary transparency can not only lead to inequality, but also risks for businesses, said Aon's Zhang.
"When an organization lacks structured compensation processes and practices, significant gaps related to pay equity can be revealed when employees openly discuss salaries," Zhang said. "This not only leads to employee dissatisfaction but also exposes the organization to legal and reputational risks."
"Embracing transparency is crucial for fostering fairness in the workplace, instilling confidence in potential candidates, enhancing the employee value proposition, and bolstering the employer brand," he said.
However, preparation is key. From establishing clear processes and prioritizing pay equity to training employees and managers on how to handle compensation discussions, organizations must do the legwork to properly achieve pay transparency.
"As organizations enhance their compensation practices, strive for pay equity, and develop managerial capabilities, we foresee a substantial transformation on the horizon," he said.
Want to make extra money outside of your day job? Sign up for CNBC's new online course How to Earn Passive Income Online to learn about common passive income streams, tips to get started and real-life success stories.
Plus, sign up for CNBC Make It's newsletter to get tips and tricks for success at work, with money and in life.
