HCM & HRIS

Class ceiling: How social background can shape salary negotiations

August 28, 2026
www.ETHRWorld.com
No Comments

This difference can become significant when two candidates with comparable capabilities approach the same role /><a id=” captionrendered=”1″ data-src=”https://etimg.etb2bimg.com/photo/133581284.cms” height=”442″ href=”http://hr.economictimes.indiatimes.com/tag/salary+negotiation” keywordseo=”salary-negotiation” loading=”eager” source=”keywords” src=”https://hr.economictimes.indiatimes.com/images/default.jpg” type=”Denny” weightage=”20″ width=”590″></img>Salary negotiation is often framed as a test of confidence, communication and an employee’s ability to articulate their value.</p> <p>But behind the negotiation table, factors such as socioeconomic background, financial security, professional networks and familiarity with corporate culture can influence how comfortably a candidate negotiates and, ultimately, the compensation they receive.</p> <p>This raises a larger question for organisations: Can pay negotiations truly be merit-based when employees do not enter the conversation with the same access to information, networks or bargaining power?</p> <p>HR leaders argued that salary transparency, structured compensation frameworks and training can help reduce these invisible differences, while still leaving room to recognise individual capability and experience.</p> <p><b>When negotiation starts before the conversation</b></p> <p>According to Manika Awasthi, Chief People & Safety Officer, Compass Group India, negotiation outcomes are not determined by confidence alone. Familiarity with workplace norms, professional networks and exposure to corporate environments can influence how comfortably candidates articulate their expectations.</p> <p>“Candidates with greater exposure to corporate environments may be more comfortable articulating their expectations, while others may hesitate to negotiate even when their skills and experience warrant it,” Awasthi said.</p> <p>This difference can become significant when two candidates with comparable capabilities approach the same role. One may have greater knowledge of market salaries, understand how corporate compensation works and feel comfortable challenging an initial offer. Another may accept the first reasonable package, not necessarily because they value themselves less, but because they have less information or greater financial pressure.</p> <p>Upasana Raina, Director-Human Resources, GI Group Holding India, highlighted the role of financial security in this equation. Candidates from less privileged backgrounds may be less willing to risk an offer by negotiating aggressively, particularly when they have immediate financial responsibilities or limited savings.</p> <p>On the other hand, candidates with greater financial flexibility may be able to tolerate unemployment or uncertainty and even walk away from an offer. Stronger professional and social networks can further provide access to salary benchmarks, referrals, mentors and alternative opportunities.</p> <p>The implication is important for employers. What appears to be an individual’s “negotiation ability” may sometimes reflect differences in access to information, financial cushioning and professional networks rather than differences in capability.</p> <p><b>Salary transparency can level the starting point</b></p> <p>For HR teams, one of the strongest tools to reduce this imbalance is greater transparency around compensation.</p> <p>Neeti Sharma, CEO, TeamLease Digital, pointed to the growing prevalence of salary disclosure in job postings. More than 50 percent of Indian job postings disclosed salary ranges in 2025, compared with around 25 percent in 2022, according to the data she cited.</p> <p>The shift matters because information itself is a source of bargaining power. When candidates know the salary range for a role, they are less dependent on informal networks or their own ability to extract information during the hiring process.</p> <p>“If everyone knows the salary band, everyone starts with the same information,” Sharma said.</p> <p>However, simply publishing a range does not eliminate the problem. Organisations also need clearly defined job levels and objective criteria for determining where an individual falls within a band.</p> <p>Awasthi similarly argued that transparent salary bands, objective evaluation criteria and structured compensation frameworks can shift the conversation away from “how much can I negotiate?” towards what determines compensation and what employees can do to progress.</p> <p>For employees, this can create greater clarity around the relationship between skills, performance, role complexity and pay. For employers, it can reduce the extent to which confidence or familiarity with corporate conventions becomes a proxy for capability.</p> <p>But Raina cautioned against making compensation structures so rigid that they fail to recognise differences in the quality and relevance of experience.</p> <p>Two candidates with the same number of years of experience, for instance, may have very different levels of expertise, leadership capability, problem-solving ability or business impact.</p> <p>The challenge, therefore, is to combine standardisation with informed discretion creating enough structure to prevent arbitrary negotiation-driven disparities while retaining flexibility to recognise genuine differences in merit and potential.</p> <p><b>From better negotiators to better-informed employees</b></p> <p>Transparency can address the information gap, but HR leaders believe organisations also have a role in preparing employees to participate more effectively in compensation conversations.</p> <p>Awasthi supported proactive training, but stressed that the objective should not be to turn employees into aggressive negotiators. Instead, employees should understand their roles, contributions, career progression and the factors influencing compensation.</p> <p>Managers, too, have a role in ensuring these conversations remain consistent and transparent.</p> <p>Sharma made a similar case for compensation training alongside transparency. Employees should know what is negotiable, how to benchmark their market value and how to communicate their contribution with confidence.</p> <p>The aim, she said, is not to make everyone a tough negotiator, but to ensure that discomfort with negotiation does not translate into lower pay.</p> <p>Raina expanded the responsibility beyond employees. Training managers and hiring teams is equally important because recruiters and managers may unconsciously respond differently to candidates based on their assertiveness, negotiation style or salary expectations.</p> <p>This points to a broader shift in how organisations may need to view salary negotiations. The question is not whether every candidate should negotiate with the same confidence.</p> <p>Rather, it is whether the compensation system can ensure that negotiation style does not disproportionately determine economic outcomes.</p> <p>The emerging HR approach is therefore less about eliminating negotiation altogether and more about designing fairness into the process.</p> <p>Clear salary bands, transparent job levels, objective evaluation criteria, market benchmarks and compensation literacy can reduce the advantage enjoyed by candidates with greater exposure to corporate norms.</p> <p>As Awasthi put it, the goal is to ensure that an employee’s background, familiarity with corporate culture or comfort with self-advocacy does not determine how much value the organisation places on their contribution.</p> <p>For employers, that may be the real test of a fair compensation system: not whether everyone negotiates equally, but whether employees can be rewarded fairly even when they do not start the negotiation from an equal position. </p> <div> <div aria-label=

Join the community of 2M+ industry professionals.

Subscribe to Newsletter to get latest insights & analysis in your inbox.

All about industry right on your smartphone!

  • Download the App and get the Realtime updates and Save your favourite articles.

Leave a Reply

Your email address will not be published. Required fields are marked *