With many employers feeling the strain of the so-called “Great Resignation,” retention strategies have become more important than ever. More and more, organizations are recognizing that workplace transparency builds company culture, which makes it an excellent—and cost-effective—strategy for holding on to talent.
So, what, exactly, does workplace transparency look like? Here are three areas of your organization where more transparency can go a long way toward employee satisfaction, engagement, and retention.
Most organizations are already—at least somewhat—onboard with the idea of transparency in company-wide decisions.
For example, many companies have vision and mission statements that they’re eager to share with employees—and rightfully so! Similarly, when a company makes a major change that requires employees’ compliance, the need to communicate that decision is obvious.
But there is often room for more transparency in soliciting feedback from employees before a decision is final. After all, if the change will affect everyone, shouldn’t they feel some agency in the matter? Simply giving workers plenty of notice is a step toward transparency, allowing them to better prepare by letting them know what’s coming.
For example, many workplaces are facing difficult decisions about returning to the office as more of the workforce becomes vaccinated or returning to remote work as COVID variants continue to disrupt plans. Either way, it’s important that employees’ concerns are heard and taken into consideration when evaluating the risks to both physical and financial health.
Consider implementing weekly 1:1 meetings between managers and direct reports or conducting a survey of all employees to gauge where everyone is at.
Additionally, leadership might consider hosting a company-wide meeting to walk employees through the reasoning behind difficult decisions and then encourage team members to contribute their thoughts on potential problems and opportunities regarding the decision. At the very least, communicate far-reaching decisions with plenty of notice for everyone to prepare.
It’s admittedly hard to be transparent about company-wide decisions, especially early on. When you recognize a problem but aren’t yet ready to commit to a particular solution, it can feel like losing control to open up the conversation. It’s difficult to open the door to feedback when you feel the need to put your foot down.
To be clear, there are certain situations that should not invite everyone’s input—such as sensitive personnel changes, where employers have a duty to respect an individual’s privacy. Still, leadership should keep direct reports affected by those changes in the loop about how it will affect them. This kind of transparency requires discretion.
But for the most part, when management includes team members in decision-making, it gives employees a sense of trust and ownership in the direction the company is heading. That, in turn, strengthens loyalty and retention.
An area where transparency might make employers a little more uncomfortable is company compensation practices. This retention strategy goes all the way back to the hiring process.
The percentage of job postings that include salary information has been rising, especially in the wake of the “Great Resignation.” But it’s still only about 12 percent overall, according to data from August 2021.
Why? By including salary information in job postings, many employers fear they’ll offer more than a candidate is willing to take while others worry current employees will feel underappreciated by offering new hires more. There’s also the concern that they could be disclosing information to their competitors. It’s also likely that some hiring managers are concerned that qualified candidates might self-filter too early if they post wages up front. Even with the best of intentions, it can be a little deceptive.
Of course, compensation isn’t the only reason to accept a particular job offer, but transparency can help set expectations for both candidates and hiring managers, making for a much smoother recruiting process.
Consider using target compensation to identify appropriate salaries for each role on your team. Target compensation is what a reasonably good performer can expect to earn in a given role. Include it in all of your job postings.
But remember, compensation transparency can also be a retention strategy. When compensation practices are included in a Culture Guide or employee handbook, employees are able to reference them as needed. This should allow them to see how their compensation was determined and what would be necessary to “level up” to a raise.
This idea is borrowed from Joel Spolsky, popular blogger, business thought leader, and founder of Stack Overflow and Fog Creek Software. He outlined his process in an Inc. Magazine article titled, “Why I Never Let Employees Negotiate a Raise.” The provocative title actually underscores an important point: employees don’t need to negotiate raises when compensation practices are transparent.
In fact, a recent report found that 58% of employees would consider leaving their current company for better pay transparency elsewhere. Employees feel respected when they know how their salary was calculated, and they also appreciate a commitment to equality and nondiscrimination.
Again, consider implementing weekly 1:1 meetings between managers and employees. These regular meetings provide opportunities for open discussion about performance and compensation. It’s also a good idea to train managers to have these conversations using best practices.
Transparent compensation practices—and not just a particular individual’s compensation—are key to a healthy company culture and successful retention.
Employers have a right to hold employees accountable for their performance, and most are comfortable doing so. After all, it affects the bottom line.
However, if a company is truly committed to transparency, that should include accountability for its own performance as well, including the bottom line.
The mere mention of disclosing financials makes many small-to-midsize businesses anxious, and when it’s done carelessly, it can be a bad idea.
When a small business owner has invested so much in starting their business, the financials can sometimes feel deeply personal. Opening your books is like opening the floodgates to others’ opinions. Transparency is an act of vulnerability.
But vulnerability is also an act of trust, and small business owners need their whole team on board.
You could begin by leading a monthly company-wide meeting, where leadership shares the company’s financial spreadsheet. Rather than merely making the document available and open to wild speculation, leadership should take the time to explain how to interpret the numbers, including the nuances and fluctuations. Context is crucial when sharing financials.
Similarly, HR could lead a separate monthly company-wide meeting, where each team lead reports on the progress of meeting their monthly SMART goal. This is a way for HR to hold teams accountable, but also one of several ways HR can demonstrate leadership in the organization and cultivate company culture.
Both of these monthly meetings should involve celebrating successes together and framing disappointments as learning opportunities. As with company-wide decisions, this kind of transparency requires discretion, especially if the news is negative. You don’t want to cause alarm that leads to a mass exodus. Again, it’s crucial to provide context.
But it should be emphasized that a culture of secrecy and paranoia can be more damaging in the long run than the occasional underperforming quarter. Transparency about company performance helps retention by preventing speculation and rumors and helping employees manage anxiety about the company’s future. It also helps retention by encouraging trust, ownership, and engagement.
If you’re looking for more opportunities to boost retention through greater workplace transparency, revisit your mission and vision statements. Your company’s vision should include transparency, even if it’s not explicitly mentioned by name. Your mission statement can help you develop transparency goals that align your organizational objectives with daily tasks.
Also, an HR audit can help you identify areas where you’re not as transparent as you could be. Transition toward transparency in one area at a time rather than all at once.
The new year is an excellent opportunity to revisit your mission statement, goals, and practices to improve retention, including transparency. To help you plan, check out BernieU’s HR Prep 2022.
For more on workplace transparency, culture, and retention, check out How Workplace Transparency Boosts Retention and 7 Company Culture Trends to Watch in 2022.
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